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HomeMy WebLinkAboutStaff Report 2604-6287CITY OF PALO ALTO Policy & Services Committee Special Meeting Tuesday, June 09, 2026 6:00 PM     Agenda Item     1.Nonprofit Partnership Workplan: Follow-up Recommendation on Lease- Lawn Bowls Club lease extension. CEQA Status - Exempt under CEQA Guidelines section 15301. Staff Presentation Policy & Services Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: June 9, 2026 Report #:2604-6287 TITLE Nonprofit Partnership Workplan: Follow-up Recommendation on Lease- Lawn Bowls Club lease extension. CEQA Status - Exempt under CEQA Guidelines section 15301. RECOMMENDATION Staff recommends that the Policy & Services Committee continue discussion of the Nonprofit Partnership Workplan on long-term lease framework and recommend Council extend the Palo Alto Lawn Bowls lease. EXECUTIVE SUMMARY The Nonprofit Partnership Workplan (NPW) Phase II includes a review of the City's long-term nonprofit lease agreements to ensure they align with community benefit, fiscal stewardship, and partnership sustainability objectives. At its November 19, 2025, meeting, the Policy & Services Committee reviewed a proposed framework for evaluating nonprofit leases and recommended lease renewals for Gamble Garden and Winter Lodge, while requesting additional information regarding public access and affordability associated with the Palo Alto Lawn Bowls Club (PALBC). This report provides the requested information and evaluates PALBC's lease within the established framework. PALBC has served the community since 1964 by providing affordable recreational opportunities, social engagement, and intergenerational programming on City- owned property. In response to Committee feedback, PALBC expanded public access by making free lessons available during all operating hours rather than limiting them to Sundays. Based on the organization's demonstrated public benefit, affordable pricing structure, long- standing partnership with the City, and enhanced public access commitments, staff recommends that the Policy & Services Committee recommend City Council approval of a lease extension for the Palo Alto Lawn Bowls Club consistent with the City's real estate policies and the nonprofit lease evaluation framework. BACKGROUND NPW Phase I Funding Requests Nonprofit Lease Agreements Nonprofit Multi-year Service Agreements Comprehensive review of all grant programs including Human Services Resource Allocation Process (HSRAP) and Community Development Block Grants (CDBG) 1 the Policy & Services Committee discussed NPW Phase II, beginning with upcoming lease extensions with Gamble Garden, Winter Lodge, and the Palo Alto Lawn Bowls Club. The report outlined a framework for considering nonprofit leases based on public benefit, financial relationship and partnership sustainability, consistent with the guiding principles and recommendations in the 2022 City Auditor’s report on Nonprofit Management. The intent was not to evaluate lease term details but rather establish a framework by which long-term lease partnerships are evaluated and aligned with existing real estate policy. The three nonprofit leases were used as leading examples as their leases would soon expire, though all have holdover clauses to continue on a month-to-month basis. ANALYSIS 1 November 19, 2025 Policy & Services Committee Meeting: https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=9499&meetingTemplateType=2&comp iledMeetingDocumentId=17629 clearly articulated by ensuring public access and favorable pricing for Palo Alto residents. Since Gamble Garden is a publicly available resource and free to the public, the Committee felt it was a good candidate to move forward for Council review and approval. However, both Winter Lodge Tennis and Lawn Bowls Club have restricted facility use and lessons at cost to the public. The Policy & Services Committee discussed the Winter Lodge Tennis lease at its March 10 meeting. Public Benefit Partnerships should provide a clear and measurable community benefit, advance City priorities, address community needs, and ensure public access to facilities and services. Financial Relationship The financial structure should balance monetary and non-monetary contributions while promoting transparency, accountability, equity, and appropriate performance expectations when reduced rent is provided. Partnership Stability Long-term agreements can preserve valued community resources, provide operational certainty, and support continued service delivery. Lease terms should balance financial considerations with the public value generated through the partnership. Under the current lease, PALBC is required to offer membership and lessons to the public. The City retains control of clubhouse reservations when the facility is not being used for club activities and receives associated rental revenue. PALBC pays annual rent of approximately $16,000 with 2% annual increases. The City is responsible for maintenance and repair of the lawn green and clubhouse located on the premises, as it relates to the structure and main support systems not exclusively serving the premises, as well as water costs. PALBC is responsible for all other maintenance related to the clubhouse, operating expenses, including taxes, utilities (except for water), and insurance.3 Membership dues are a key source of revenue used by PALBC to pay rent and support facility operations. The Club maintains an accessible fee structure through a variety of membership options, including associate (non-bowling) memberships, student memberships, and regular memberships. Annual dues range from $30 to $180, helping ensure affordable participation while supporting the Club's financial obligations and community programming. Facility hours vary depending on the season and remain closed during non-operating hours to prevent damage to the specialized playing surface and ensure its long-term preservation. In response to Committee feedback regarding public access, PALBC expanded its public lesson opportunities from Sundays only to all operating hours. This change significantly increases community access and strengthens the public benefit provided through the lease arrangement. Winter Hours Tuesday, Thursday, Saturday, 1:00 pm - 4:00 pm Sunday, 1:30 pm - 4:30pm Summer Hours Tuesday, Thursday, Saturday, 10:00 am - 1:00 pm Sunday, 1:30 pm - 4:30 pm Wednesday Evening Bowls 5:30 pm - 7:00 pm Consistent with the framework’s emphasis on partnership stability and the preservation of valued community resources, staff recommends establishing a periodic review process to ensure continued public benefit and community use. The review process would allow the City to evaluate the lease arrangement if the facility is no longer reasonably accessible to the public during established operating hours or is no longer functioning as a community-serving recreational asset. Staff recommends incorporating annual performance measures related to both member and public use of the lawn bowl green and facility, along with a five-year trend 3 Palo Alto Lawn Bowls existing lease: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=79073&dbid=0&repo=PaloAlto&searchid=e3778a55 -5ed3-4ad9-a68b-26aaaf8c0af5&cr=1 analysis and evaluation. This review mechanism would help ensure that the public benefit supporting the long-term lease remains active throughout the lease term and that the partnership continues to advance the community objectives upon which the lease extension is based. FISCAL/RESOURCE IMPACT st. Extending the lease under the same terms would increase monthly rent to $1,337.87 or $16,054.44 per year on July 1, 2026. The Community Services Department has a five-year landscape maintenance contract, which includes two yearly turf renovations. The current year four cost is $53,238 and will increase to $55,101 in the final year. Irrigation costs are estimated at $3,000. Public Works Facilities maintenance on this property has been historically minimal. STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW APPROVED BY: June 9, 2026 www.paloalto.gov NONPROFIT PARTNERSHIP WORKPLAN: Follow-up Recommendation on Palo Alto Lawn Bowls Club Lease Extension 2 Recommendation Staff recommends the Policy & Services Committee: •Continue consideration of Nonprofit Workplan Phase II (Long-Term Leases) framework and recommend Council extend the Palo Alto Lawn Bowls Club lease 3 Nonprofit Workplan Major Areas of Work •NPW Phase I Funding Requests •Nonprofit Lease Agreements (Phase II) TONIGHT: Continue consideration on Phase II framework and provide Council recommendation on Palo Alto Lawn Bowls Club lease extension • Nonprofit Multi-year Service Agreements •Strategic review of all grant programs including Human Services Resource Allocation Process (HSRAP) and Community Development Block Grants (CDBG) 4 Long-Term Lease Agreements Framework for evaluating and considering nonprofit long-term lease agreements: Public Benefit of the Partnership Financial Relationship Stability of the Partnership 5 Palo Alto Lawn Bowls Club Lease •Palo Alto Lawn Bowls has been a long-time nonprofit partner since 1964. •Property consists of lawn bowling green and clubhouse and storage shed. •Annual rent is approximately $16,000 per year with 2% increases. •PALBC responsible for minor clubhouse maintenance, operating expenses, utilities (except for water), and insurance. •City responsible for maintenance and repair of lawn green and clubhouse and water costs (approximately $55K annually). •Current 10-year lease expired in March 2026, holdover clause in effect 6 Palo Alto Lawn Bowls Public Access & Pricing •Previous public access hours: Sundays 1PM •Revised public access hours: Public Winter Hours Public Summer Hours Monday Closed Closed Tuesday, Thursday, Saturday 1PM-4PM 10AM-1PM Wednesday Closed 5:30PM-7PM Sunday 1:30PM-4:30PM 1:30PM-4:30PM •Public hours are available at no cost •Clubhouse rental available at discounted rate for Palo Alto residents •Clubhouse available for City use when not in use by Lawn Bowls Club 7 Recommendation Staff recommends the Policy & Services Committee: 1.Continue consideration of Nonprofit Workplan Phase II (Long-Term Leases framework) and recommend Council extend the Palo Alto Lawn Bowls lease Lupita Alamos, Assistant to the City Manager June 9, 2026