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Home My WebLink About0354.092~, I I , , - July 23, 1992 HONORABLE CITY CO~CIL Palo Alto, California 13 nI'E'N'DS or THE CBILDR!'N'S TBEATRE--,,--,,AJ~M_~NDHENT ·ro PRELl!lLO-'q;Y AGBIEMEH'T AND LEA~ES Members of the Council~ Report ill Brier This report requests that Council approve the attached amendment to the Preliminary Agreement and Leases between the city of Palo Alto and the Friends of the Children's Theater concerning the proposed Children's Theater improvement projact (Ph.ases 1 and 2). Baekground On October 9, 1990, council directed staff to proceed w'ith the neqot.latinn ¢f an agreement with the Friends of the Children·s Theater for t:t~eir development and gift to the city of Phase 1 and Phase 2 of the ChildrenTs Theater project. On July 22, 1991, Council approveo the Preliminary Agreement between the City and Friends, along ","ith forms of le.ases for Phase 1 and Phase 2. The Preliminary Agreement was execute~ September 16, 1991~ The Preliminary Agreement grants the Friends two options to lease certain areas adjace~t to the Theater. to enable the Friends to construct Phases 1 and 2, respectively. Neither option to lease can be exercised until the ~ntire project has oeen approved by the City and all other-conditions of the Fr-eliminary Agreement have been fulfilled by the Friends. The option for Phase 1 can ~ exercised only after the Friends have raised sufficien~ funds to fully finance Phase 1 construction. Sim:larly, the option for Phase 2 can be exercised only When the Friends have raised sufficient tunas to finance Phase 2 construction. CMR:354:92 -- J - -,-" "--'" Phase 1 includes the installation of air conditioning in the f';xisting Theat-re, the remodeling or a storage area adjacent to the Theatre and the c::Jnstruct.ioT". of a Theatre liararz". Ph.;:',sa 2 includes the construction of an outdoor platform (stage) and production area adjacent to tne Theatre. proposed Amendm.nt Under the Preliminary Agree;r.ent, the Friends are req'.Jired to obtain approval of their development plans for both phases of the project prier to exercising either option to lease und~r t~e Agreement. The. Friends have o'cltained approval of both phases of the project from the Planning commission and th6 City council, and approval of Phase 1, except fer tbe final landscaping plan, frem the Architec tural Review Board (ARB) and Historic Resources Board (H&B) ~ Under the at.tached amendment, 'Which is supported by the Friends, the Friends will need only final ARB and HRB approval for Pnase 1 of the project to exercise the optior. to lease for Phase I, and .. ill need final ARB and HRB approval for Phase 2 of the project prior to the time they exercise t.he option to lease for Phase 2 ~ In addition, the amendment clarifies that the final J.andscapinq plan for Phase 1 of the pro)ect must he approved -.ithin 90 days follo~in9 the execution of the Lease for Phase l~ The amendment also clarifies that the Friends must have their construction drawil"1,gs approved for Phase. :2 of the project prior to the time they exercise the option to lease tor Phase 2. Finally, the amendment changes the financial security requirement for both phases of the project. Rather than requiring a contractor's performance bond, the Friends .ill be required to deposit sufficient funds for each phase of the prcject into joint accounts or investments naming both the City and the Friends as beneficiaries, and requiring both the City and the Friends to approve all disbursements~ All other requirements and conditions of the Preliminary Agreement eithEr have been or will be met prior to the Friends exercising the option to lease for Phase 1. staff Reeollullendation Staff recommends that Council: 1. Approve the attached amendment to the Preliminary Agreement between the city of Palo Alto and the Friends of the Children's Theatre and authorize the Mayor to sign the amendment; 2~ Authori~e the Mayor to sign the Lease for Phase 1 when all the require'!!lents and conditions of the Prelimina.ry Agreement for Phase 1 of the project have been met, as determined by the City Manager; CKR~354:92. 2 .---,~--'L i -I - J. Authorize the Mayor to s.ign the Lease for Phase 2 'When all the requirements e.nd conditions of the Preliminary Agreement for Phase 2 of the project have been met, as determine.d by the City Y.~nageri and 4. Authoriz~ the city Ma~ager to approve any additional minor amendments to the Preliminary Agreement and the Leases as ~ay be needed to ilrlplement the project. Respectfully su~mitted, 1Jl(/~:hl.'~ JANET FREELAND Financial Analyst ~~»A\'<-~ KOREEN KELLEHER seniol' Assistant Cl ty Attorney cc~ Friends of the Children's Theatre Related Staff Reports; CMR:354:92 546:6 522! 0 298:91 364:91 3 ,-. " - lUQIlIDKElI'r 110. 1 TO PlU!LIXHIlU'Y "GlIB&IlENT BETlIZEX CIl'Y OP PALO AI.'1'O ANn :raZBNDB or TAJ: CHILDREltP S TKl!:ATU lOR GIn TO CBILDUlP 8 'rIfUTRB TliIS AMENDltf.ENT to the Prel im,inary Agreement Between the City of Palo Alto and Friends of the Children's Theatre for Gift to Children's Theatre, dated September 16~ 19~1~ hereinafter referred to ~s the -Agreement·, is made a~d entered into this day of =,-,..,,==_====' 1992, by and between the CITY OF PALO ALTO, a municipal corporation of California, hereinafter referred to as ·CITY, -and the. FRIENDS OF THE CHILDREN' I 5 THEATRE, hereinafter referred to as ·FRIENDS-; R191T11.8: h"'HEREAS, the Agreement provides for the intended gift from FRIENDS to CITY of :::3.dditions and improvements to the Children's Theatre (the "project") ~ as described in the Agreement and the forms of the leases attached ther-eto as Exhibit II and Exhibit III (the nLeases~); and WHEREAS, the parties may agree to amend from time to time and both parties now desire Agreement as set forth herein: the Agreement to amend the HOW r THEREFORE, in consideration of their mutual covenants, the parties hereto agree as follows: S,CTION 1. The fol.lowing paragraphS of the Aqreement are hareby aJlended to read as f0110·"'9: a~ Paragraph 4(D}. ~D. Development Plans Approvals. To exercise its option to lease for Phase 1, FRiENDS shall have submitted, and received appr~val of, the development plans (the -Development Plans") for both phases of the Project from CITY's Planning commission and City Cour.cil. FRIENDS shull also have received app~oval of ~~e Development Plans for only Phase 1 of the Project from CITY's Architectural Review Board ("ARB") and Historic Resources Board (RHRB"). NotYithstanding the foregoing, FRIENOS shall have received approval by the ARB and the HRB of the final landscape plan for Phase 1 within ninety (90) days following the commencement of the Lease for Phase 1. The final landscape plan for Phase 1 to be reviewed by the ARB and the HRB shall be consistent with the scope, intent and conditions of the previous City council Project approval. To exercise its option to lease for F'hase 2, FRIENDS shall haVe: received approval from the ARB and the liRB of the Development Plans for Phase 2, including the final landscape plan for Phase 2. The Development Plans shall include the Schematic Plans, the specific plans and details of any resource conser- 1 t • - vation features to be included and any other information about the. Proj ect required to be 5ubrili tted by crrv staff." b. Paragraph 4(£). IIIE. ~strqctiQn Dra'Wings_~_Q.YAls. To exercise its option to lease tor Phase .1, FRIENDS shall have obtained approval of the construction dra~in9s (the "con~truction Drawings") for Phase 1 of ~e Project from crry1s City Engineer 3nd Chief euilding OfficiaL To exercise its option to lease for Phase 2, FRIENDS shall ""ave obtained approval of the Construction Drawings for Phase 2 of the Project from CTT~lS city Engineer and Chief Building Official. Revi~· .. o! the construction Drawings for each phase of the Project by the city Engineer shall have included those aspects of design pertaining to ~hether each phase of the project ~an be effectively main tained after it is completed and given to CITY for operation and Qaintenance. The Construction Dra'Wings for each phase shall include: (i.) (il) (iii) (iv) (v) Complete architectural, landscape, systems and enqin~~ring plans: Complete str~ctural calculations; Complete cons'truction specifications; Complete construction contract form; and Proposed construction schedule. Notwithstanding the foregoing, FRIE1'lDS shall hl1ve received approval of the complete landscape plans for Phase 1 within ninety (90) days follo~ing the commencement of the Lease for Phase 1.· ~~~~. The following paragraphs of the LeaS~S are hereby amended to read as follows: a. Paragraph Ie of EKhibit I! (the Lease for Phase 1 of the Project). "10. FRIENDS' ASStJ"RAtlCE OF CONSTRUCTION COMPLETION Prior to commencemer.t of this Lease and construction of the Project, FRIENDS shall fur-nish CITyts Director of Finance with a specific construction schedule and evidence that assures CITY that sufficient funds ~ill be available to complete the Project. The phrase "suffi cient funds R for purposes of this Lease means the total amount of all actual construction costs for all the improvements under the project¥ as set forth in FRIENDS' contractor IS bid for the Project, plUS such contractor's overhead and profit, plus an additior.al ten percent (10%) of such cost as a contingency. Evidence of such assur ance shall take the followi~g form: Evidence cf FRIENDS 1 deposit of the total amount of sufficient funds for the Project, as defined here- 2 "," in, into interest-bearing joint accounts or joint investments agreed upon by FRIENDS and CITY, ,..ith such accou!"lts and investments naming both FRIENDS and CITY as beneficiaries of such f~~dsl and with such accounts and investments requiring the siqna ture~ of authorized representatives of both FRIENDS and CITY tor disbursements, subject to the follow ing s.entences~ At: &uch time as FRIENDS has cur rent.ly payable in\'oices for the Project, CITY will t.ake the steps ne.ceGsary to expedite its approval process so that funds can be disbursed from the parties' joint accounts or investments which ~ill be sufficient to satisfy FlUENDS' current payablee. CITY sh."ll use its best eftorts to process said requoCists for approval in a manner whiCh penli ts FRIENDS to remain CUrrent on its obligations. CITY's Director of Financ~, or her designee, shall be representative of CITY for all purposes under t:"is Clause 10. Should this Lease terminate for any reason l befo~e the expenditure of all the funds from said jcint accounts or investments, CITY shall be -entitled full rights to and ownership of such funds: provided., however, that CITY shall tr-reaf ter expenQ the funds only for purposes of actual construction of the project, or any r~rtion thereof yet to be complete.d when this I.e" ~ terminates. Should any portion of said j-oint i. ..:::cunts or in vestments r-emain undisbursed follo"Wing completion of the project as provided under Clause 9(G) here of, such re:Dainder shall ba disbursed to FRIENDS upon request. All evidence of said accounts, investments, deposits or disbursements shall be in a form reasonably acceptable to CITY's Director of Finance." b. Pa~agraph 10 of Exhibit III {the Lease tor Phase 2 of the Project). 1If:10. FRIENDS' ASSL~CE OF CONSTRUCTION COMPLETION Prior to commencement of this Lease and construction of the Project f FRIENDS shall furnish CITY ts Director of Finance with a specific construction schedule and evidence that assur-es CJTV that sufficient funds will be available to complete the Project. The phrase "suffi cient funds" for purposes of this Lease means the total amount of all actuai construction co.:.;ts for all the improvements under the proj~~t, as set forth in FRIENDS' contractor's bid for the Project, plus ~uch contractor's overhead and profit, plus an additional ten percent (10%) of such cost as a contingency. Evidence of such assur ance shall take the following form: 3 >~~.I~{ -~"' ::,,-: .. - - .. ' ~-.-' Evidence of FRIENDS' deposit of the total amount of sUfficient funds for the Project, as defin~d here in, into interest-bearing joint accounts or joint inve~tments agreed upon by FRIENDS and CITY, with such acco~~ts an~ investments naming both FRIENDS and CITY ae:. beneficiaries of such funds, and with such account3 and investments requiring the signa tures of authorized representatives of both FRIENDS and CITY for disbursements, subject to the follow ing sentences: At such time: as FRIEnDS has cUr rently payable invoices fot" the Froject~ CITY will take the steps neceesary to expedite its approval process so that funds can be disbursed frot:! the parties I joint accounts or investments which 'W'i11 be sUfficient to satisfy FRIENDst current peyables. CITY shall use its best efforts to process said r-equests tor approval in a manner-which pE':r:1I:Ii ts FRIENDS to remain current on its obligations. CITyt s Director of Finance, or her designee, shall be rept"esentative of CITY for all purposes under this Clause 10. Should this LeaSe! terminate for any reason, before the expenditure of all the funds from said joint accounts or investments, CITY shall be entitled full rights to and ownership of such tunas; provided, ho~ever, that CITY shall thereaf ter expend the funds only for purposes of actual construction of the Project, or any portion thereof yet to be completed when this Lease terminates ~ Should any portion of said j oint accounts or in vestments remain undisbursed following completion of the project as provided under Clause ~'G) here of, such remainder shall be disbursed to FRIENDS upon request. All evidence of said accounts, investment~, depoSits or disbuL'sements shall be in a form reasonably acceptable to CITyt s Di~ector of Finance.~ SECTIOl! provtsions of ana force ana effect~ 3. Except as herein modified, all other exhibits to the Agreement shall remain in full IN WITNESS WHEREOF, the parties hereto have executed this Amen~ent the day and year first above 'W'ritten CITY OF PAIn ALTO Mayor 4 ArrEST: City C~erk APPROVED AS TO FORM: senior AS5t. City Attorney APPROVED: Assistant City-Manager Director of Finance Director of Public Works Director of Plar~ing and Comm'.lnity Environment Director of Community services 5