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Home My WebLink AboutStaff Report 2509-5223CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, May 04, 2026 Council Chambers & Hybrid 5:30 PM Agenda Item 11.Approval of Second Amendment to the Lease Between the City of Palo Alto and Community Skating, Inc. for the Tennis Facility at 3005 Middlefield Road, Extending the Term to January 1, 2040; CEQA Status – Categorically Exempt City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Administrative Services Meeting Date: May 4, 2026 Report #:2509-5223 TITLE Approval of Second Amendment to the Lease Between the City of Palo Alto and Community Skating, Inc. for the Tennis Facility at 3005 Middlefield Road, Extending the Term to January 1, 2040; CEQA Status – Categorically Exempt RECOMMENDATION Staff and the Policy & Services Committee recommend that Council authorize the City Manager to execute the Second Amendment (Attachment A) to the lease between the City of Palo Alto and Community Skating, Inc. for the tennis facility at 3005 Middlefield Road, extending the term until January 1, 2040. BACKGROUND Community Skating, Inc. (CSI) currently leases the City owned property at 3005 – 3009 Middlefield Road to operate a community ice skating and recreational tennis facility at no financial cost to the City. The original ice-skating agreement is dated January 26, 1990 and the tennis agreement was originally dated April 20, 2001. Both contracts require a $100 rent payment for the entire term and require CSI to be responsible for all operating expenses. On April 27, 2009, the City Council unanimously passed a motion to approve Amendment No. 1 to the lease for the tennis facility at 3005 Middlefield Road through April 19, 2026 and Amendment No. 2 to lease for the ice-skating facility at 3009 Middlefield Road through January 1, 2040.1 The Board of Directors of CSI wrote a letter to the City Manager, dated April 22, 2024, requesting an extension to their tennis lease (Attachment B). On March 10, 2026, the Policy and Services Committee unanimously passed a motion to recommend the City Council approve the Winter Lodge tennis contract and align its term with the Winter Lodge skating lease. As part of 1 City Council, April 27, 2009; Agenda Item #6, CMR 219:09, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2009/cmr-219-09-winter-lodge.pdf its review of the Nonprofit Partnership Workplan related to long-term leases, the Committee evaluated the public benefit, financial relationship, and stability of the partnership. The Committee recommended staff explore feasibility of mutually beneficial maintenance agreements and engage Winter Lodge through the lease renewal negotiations to explore opportunities to provide free access to the tennis courts when not in use.3 ANALYSIS FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Lauren Lai, Administrative Services Director 3 Policy & Services, March 10, 2026; Agenda Item #1, Report #2601-5854, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86702&dbid=0&repo=PaloAlto&searchid=78feffcc- 6f05-44f8-9cd9-df51640bc20e&cr=1 SECOND AMENDMENT TO LEASE Tenant shall use the Premises to provide a public recreational tennis facility including tennis instruction (group and private lessons) and/or scheduled public use. Commencing September 15, 2026, and every first and third Tuesday of every month thereafter, Tenant will make at minimum one court available to the public to register and use at no cost from 12:00pm to 1:30pm. The parties shall evaluate the demand for free public use and impact to Tenant’s operation by April 1, 2027. If the parties reasonably determine that public use of the courts should be adjusted, the parties will promptly work in good faith to make changes. Any adjustments to free public use shall take effect immediately. B. Optional Services and Uses. Subject to the prior written approval of the City Manager, Tenant may also use the Premises to provide additional services, activities and uses which are ancillary to and compatible with the required services and uses stated above and not in conflict with the required uses. Approval of optional uses shall be within the sole discretion of the City Manager and subject to any other required City approval. C. Prohibited Uses. The above-listed required, permitted and optional services, activities and uses shall be the only services and uses permitted upon or from the Premises. Tenant agrees not to use the Premises for any other purpose nor to engage in, or permit, any other business activity within or from the Premises. D. Required Program Services and Uses. In order to ensure that the use of the Premises is keeping with the intended uses as set forth above, Tenant annually shall present to City reporting in such form and detail as City may reasonably request, including the annual budget of Tenant within thirty (30) days after the Tenant has approved said budget. Tenant also will present to City for its information an annual report of the operation of the program in the Form 990 as submitted to the State of California as required for a tax-exempt organization within one hundred and eighty (180) days of the end of each budget or operating year. Tenant shall perform the program services described in Exhibit A of this Second Amendment (Scope of Services & Program Services), which may be modified by Tenant, in collaboration with City, from time to time in accordance with the terms and conditions contained in this Lease. The performance of all program services shall be to the reasonable satisfaction of City. Tenant shall provide annual activity reports relating to the Scope of Services & Program Services for the period ending June 30 of each year, by July 31 of each year, throughout the Term. The first annual activity report is due July 31, 2027. The report shall cover performance measures in Attachment A and information on program services for the entire year. 3. Miscellaneous. 3.1 This Second Amendment sets forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. 3.2 Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect. In the case of any inconsistency between the provisions of the Lease and this Second Amendment, the provisions of this Second Amendment shall govern and control. The capitalized terms used in this Second Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Second Amendment. 3.3 Submission of this Second Amendment by City is not an offer to enter into this Second Amendment but rather is a solicitation for such an offer by Tenant. City shall not be bound by this Second Amendment until City has executed and delivered the same to Tenant. 3.4 Tenant hereby represents to City that Tenant has dealt with no broker in connection with this Amendment. Tenant agrees to indemnify and hold City harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Second Amendment. 3.5 Each signatory of this Second Amendment represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting. 3.6 The Premises have not undergone an inspection by a Certified Access Specialist (CASp), and a disability access inspection certificate, as described in subdivision (e) of Section 55.53 of the California Civil Code, has not been issued for the Premises. In accordance with Section 1938 of the California Civil Code, Tenant is advised of the following: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Accordingly, the parties hereby agree that Tenant shall have the right, but not the obligation, to have a CASp inspect the Premises and determine whether the Premises complies with all of the applicable construction-related accessibility standards under state law. If it is determined that the Premises do not meet all applicable construction-related accessibility standards, then Tenant shall promptly make, as soon as reasonably possible, but subject to Section XIV of the Lease, any repairs necessary to correct violations of construction-related accessibility standards identified by such inspection, at Tenant’s sole cost and expense. [Signature Page Follows] IN WITNESS WHEREOF, City and Tenant have entered into and executed this Second Amendment as of the date first written above. CITY: CITY OF PALO ALTO, a California municipal corporation By: ______________________________ Name: ____________________________ Title: _____________________________ Dated: ____________________________ Approved as to form: By: ______________________________ Name: ____________________________ Title: _____________________________ Dated: ____________________________ TENANT: Community Skating, Inc., a California non-profit corporation By: ______________________________ Name: ____________________________ Title: _____________________________ Dated: ____________________________ Exhibit A The purpose of the Winter Lodge Tennis Program is to provide a safe, inclusive, and community-centered experience that promotes active living, skill development, connection and fun, through recreational activities. Operating seven days a week, Winter Lodge Tennis is a bustling tennis school serving thousands of people per month on four high-quality, well-maintained courts, making high-quality tennis instruction readily available to Palo Alto residents. Winter Lodge Tennis is committed to offering a diverse range of high-quality tennis instruction—including group classes for all ages and levels including mini-tennis, special needs tennis, camps, private lessons and enrichment programs —while maintaining transparent operations, accessible pricing and clear communication with all participants. Through thoughtful program planning, scheduling, growth, ongoing evaluation, and continuous improvement, Winter Lodge Tennis seeks to meet the evolving needs of the community and ensure the facility remains a welcoming and vibrant destination for residents of all ages and abilities. To enhance and broaden equitable access to high-quality, healthy recreational activities for all ages and abilities in the Palo Alto area, with a focus on safety, inclusivity, community outreach and year-round engagement. Provide a wide range of classes, lessons and camps throughout the calendar year, offering high-quality tennis instruction on top-quality, well-maintained courts with no membership required, making tennis offerings inclusive and accessible to all. Continue to grow group classes and skill development programs (from beginner to advanced) for youth and adults, including family friendly and intergenerational offerings. Maintain and promote individual tennis lessons, group instruction, special needs instruction and mini-tennis instruction opportunities. Develop more partnerships with local schools to increase community awareness and participation. 1. Increase total public participation by promoting lower-attended times, for example morning court time for adult programs 2. Enroll more students in tennis classes by offering targeted adult/family friendly programs and outreach. 3. Schedule tennis offerings in response to community availability to maximize tennis facility usage, offering family discounts and early bird discounts to help with affordability and inclusivity. Outcomes: More community members of all ages engage in active, healthy outdoor recreation. Participants report higher physical activity levels and increased satisfaction with recreational options. Winter Lodge strengthens its role as a year-round Palo Alto recreational hub beyond traditional winter sports. Goal 2: To position Winter Lodge Tennis as a premier destination for youth engagement, sport- skills development, structured mentorship and positive social interaction. This includes long term participation and leadership development especially for local, underserved youth. Strategies: Offer high-quality tennis instruction to thousands of students annually, with a focus on local youth participation. Incorporate peer leadership development by expanding the volunteer youth assistant program, allowing participants to progress from student to assistant and future junior coach. Partner with local schools and youth organizations to increase awareness and sustained participation. Objectives (SMART): 1. Expand youth assistant roles to support younger learners and train young leaders. 2. Collaborate with local organizations to offer healthy youth events. Outcomes: Increased youth physical activity, confidence, and leadership skills and sense of belonging (the tennis family). Stronger ties between Winter Lodge Tennis and local educational/community youth partners. Greater access to healthy, fun activities for youth who may lack other outlets. Goal 3: To cultivate Winter Lodge tennis as a welcoming community gathering place that supports social connection and mental well-being for residents of all demographics. Strategies: Provide inclusive group reservation opportunities and classes for schools, nonprofits, families, and community organizations. Increase awareness of Winter Lodge Tennis as an affordable event venue. Continue developing enrichment programs for elementary, middle and homeschooled youth Continue to Assist annually with the USTA Senior Games in Palo Alto Collaborate regularly with Palo Alto Tennis to offer Junior Tournaments. Objectives (SMART): 1. Collect participant satisfaction feedback with the goal of positive growth around overall health, inclusivity and enjoyment. 2. Increase participation for community groups, nonprofits and social organizations through targeted outreach. Outcomes: A stronger sense of community connectedness through shared recreational experiences. Broader participation by community residents, nonprofit partners, and social groups. Winter Lodge Tennis becomes known not just for high-quality tennis instruction but also as a social and wellness touchstone in the area. Increase community love for the sport of tennis. Goal 4: To deepen Winter Lodge Tennis support for local schools, underserved community members, especially youth, through targeted access and formalized partnerships and measurable community impact. Strategies: Continue offering discounted options, including for scholarship students and community partners. Partner with local school districts, nonprofit agencies, and social services to ensure access for all populations. Continue recreation aimed at mental health and social inclusion, leveraging Winter Lodge Tennis as a safe, active respite from stress and screens for youth. Objectives (SMART): 1.Establish formal partnerships with additional community service organizations focused on serving vulnerable populations, specifically youth. 2.Track and report youth participation levels and program retention to measure reach and effectiveness. Continued high participation levels among youth and families. Increased awareness of Winter Lodge Tennis as a supportive, trusted resource in addressing community health and positive youth development. Enhanced mental health and well-being among participants through increased access to physical recreation and social engagement. April 22, 2024 Mr. Ed Shikada City Manager City of Palo Alto 250 Hamilton Avenue, 7th Floor Palo Alto, CA 94301 Re: Winter Lodge Tennis and Ice SkaNng Facility Lease Extensions Dear Mr. Shikada, The Board of Directors of Community SkaNng Inc. (CSI) dba Winter Lodge is wriNng to you and the City of Palo Alto regarding our current leases for the ice skaNng and tennis faciliNes on Middleﬁeld Road. Our tennis lease expires in 2026. Our ice skaNng lease expires in 2040. CSI is parNcularly interested in requesNng a long-term extension on our tennis site lease #326 with the City of Palo Alto. CSI may also be interested in a long-term extension for the ice skaNng site lease #247 (dependent upon feedback received from the City). Winter Lodge is delighted to be a prime example of a successful Public Private Partnership (PPP) that exempliﬁes how these partnerships can provide quality services for the community at no cost to the city. CSI very much understands that these leases allow CSI to serve as stewards of City-owned recreaNonal lands. We also are proud partners of the City of Palo Alto in providing eﬀecNve and needed recreaNonal opportuniNes for Palo Alto. CSI would like to discuss our common objecNves related to the future use of these properNes with the City. We respec^ully request your preliminary input and direcNon regarding what you might need in order to ulNmately recommend approval of one or both of the lease extensions to the city council. We also welcome your insights as to how we can best bring about the requested lease extensions. With this in mind we also respec^ully request a meeNng with you (and your staﬀ) to discuss our lease extensions. In anNcipaNon of a meeNng, we have provided some background informaNon regarding our leases and our recreaNonal programs for your review. With regards, Caroline Bliss, MD Linda Stebbins Jensen, MPA President, CSI Board of Directors ExecuNve Director, Winter Lodge WINTER LODGE RECREATIONAL ICE SKATING AND TENNIS PROGRAMS Winter Lodge has successfully operated a seasonal outdoor ice skaNng school and facility on this site for nearly 70 years. The last 40 of those years have been under the current management of the community based 501(c)(3) non-proﬁt organizaNon, Community SkaNng Inc. Winter Lodge has won numerous awards for our outstanding, one-of-a-kind skaNng school and outdoor ice skaNng experience. The awards include NaNonal recogniNon for being the #1 ranked ice skaNng experience in the USA. Winter Lodge’s purely recreaNonal skaNng school is the only one of its kind and has been recognized as the largest in the country. (See afachment for parNal list of awards and recogniNon.) We are proud to be a part of the City’s Parks and RecreaNon Mission to provide quality recreaNon for the ciNzens of Palo Alto, serving over 70,000 people a year. Of those 70,000 people, over 50% are Palo Alto ciNzens. Our weekday, weekend and evening programs afract a wide variety of people and organizaNons. People of all ages, genders, skill levels, and ethniciNes, from individuals to whole families and even non-skaters are regulars at Winter Lodge. Winter Lodge’s tennis program, led by InternaNonally Ranked Pro Kim Grant, is also robust. The program oﬀers both group and individual lessons to the public for all ages and abiliNes also fun, recreaNonal mini-tennis and special needs tennis. On the other end of the spectrum, a number of our serious and dedicated students have been awarded college scholarships for tennis. Our courts are kept in top condiNon and the site is welcoming, with shaded areas for waiNng family members. Like our ice skaNng classes, tennis classes are oﬀered through Palo Alto schools as well as the Palo Alto RecreaNon Department. Ice skaNng and tennis have co-existed on this property for almost 70 years. The seasonal nature of the two sports has proven to be a perfect balance for the full use of the site. The shared parking and shared use of the restroom faciliNes work well and are fully uNlized. Between the two uses, the site usage is close to capacity for most months of the year. Winter Lodge’s skaNng and tennis leases sit on 3.7 acres of dedicated parkland, and the enNre property is zoned Public Facility. In 1985, ProposiNons A and B were wrifen to preserve Winter Lodge and outdoor ice skaNng in Palo Alto. Those proposiNons passed with record-breaking numbers in support of the “land swap” to acquire the land on Middleﬁeld Road as permanently dedicated park land. Winter Lodge has been an excellent steward of this park land. Between the two lease holds, we have invested over 2.5 million dollars over the past two decades in both major improvements and smaller improvements designed to enhance the guest experience. (See afached ﬁnancial informaNon.) As a prime example of a successful Public Private Partnership, Winter Lodge has accomplished all of this at no cost to the City of Palo Alto, with the excepNon of the use of the dedicated park land. Winter Lodge is 100% operaNonally funded and has weathered the ongoing storms of several recessions, the decline of the Midtown business district, declining numbers of children in town and COVID. Winter Lodge is the longest-operaNng business in Midtown and the oldest ice skaNng rink in the Bay Area. Winter Lodge is a favorite party venue choice for individuals, schools, families and businesses (see afachment). Our facility enhancements (such as ﬁreplaces, accent lighNng, seasonal decoraNons, covered party areas, an arNﬁcial snow machine, hot chocolate dispensers and ice bears) all make an ice skate ouNng feel extra special to our guests. Our history is long and storied. We do our best to honor that history while also ensuring that we run an up-to-date, successful, sustainable program so that generaNons of future Palo Alto ciNzens will have the opportunity to enjoy our unique programs and facility. Our established record of oﬀering top quality faciliNes and programming comes with costs. We anNcipate that we will conNnue to need to invest millions of dollars over the next few decades to keep our faciliNes in top condiNon, keep the aestheNcs updated and make regular upgrades. We have an upcoming plan for an enNre overhaul of the electrical systems across the enNre skaNng and tennis site which will likely cost over a half-million dollars. This project will require years of planning. That, along with other necessary upcoming projects like resurfacing the tennis courts and parking lots and conNnuing to upgrade our facility aestheNcs, gives us the need to have a long-term lease in eﬀect for both sites in order to jusNfy the huge outlay of costs for these long-range projects. In conclusion, Winter Lodge desires to conNnue to run our award-winning recreaNonal programs in ice skaNng and tennis and to serve the youth and families of Palo Alto for decades to come. The Nming for this lease extension will be helpful in moving our upgrade projects and fundraising eﬀorts forward. It will also ensure the conNnued top-notch operaNon of this well- loved public facility. We respec^ully request your direcNon regarding what you might need in order to ulNmately recommend approval of the lease extensions to the city council and bring about the requested lease extensions.