Loading...
HomeMy WebLinkAboutAgenda Report - August 17, 2011 C-06AGENDA ITEM C0,6 Ah CITY OF LODI COUNCIL COMMUNICATION Im AGENDA TITLE: Adopt Resolution Authorizing City Managerto Enter into Fourth Amendment to World of Wonders Science Museum Lease MEETING DATE: August 17,2011 PREPARED BY: PublicWorks Director RECOMMENDED ACTION: Adopt resolution authorizing City Managerto enter into fourth amendmentWorld of Wonders Science Museum lease. BACKGROUND INFORMATION: The City of Lodi received the attached letter from the Board of Directors of the World of Wonders (WOW) Science Museum requesting that the Council consider amending the current lease agreement. Specifically, the WOW Board requests the Council extend the commencement of rent obligations by one additional year and freeze the indexing of rent increasesfor an additional year. WOW entered into an agreement with the City on August 2, 2006, to develop the "shell" space attached to the downtown Lodi Transit Station parking structure as an interactive science museum focused on children. WOW obtained a collection of exhibits through the Exploratorium and opened on March 6, 2009. Since that time, the museum has purchased and/or built many additional exhibits. The museum is requesting more time to raise operating revenues due to the poor economic conditions. Prior to this agreement with WOW, the City had unsuccessfully marketed the space for retail use. Given that WOW has invested $550,000 in improvements, plus in-kind contributionsto the City -owned facility, staff recommends the following: A) Extend the commencement of rent obligations by two additional years from February2011 to February 2013 and authorize the City Managerto grant two one-year extensions of this rent forbearance based on the City Manager's sole discretion if economic conditions warrant. The current agreement calls for rent in the amount of $1,030 per month beginning February2011; and, B) Freeze the indexing of rent increases for two additional years plus the two one-year extended years, if applicable. The rent is to increase annually by the Consumer Price Index or 2.5 percent, whatever is larger. WOW has engaged in a very successful campaign to raise funds and provided infrastructure improvements to the City -owned facility. Given the poor economic conditions and the added benefit of the WOW Science Museum to the downtown, staff recommends approval of the Fourth Amendment. FISCAL IMPACT: All rent proceeds benefitthe Transit Fund pursuant to the City's funding agreement with the Federal Transit Administration (FTA), thus this lease amendment is subject to approval by the FTA. The Transit Fund would forego approximately $12,360 in annual rent. However, the WOW Science Museum is a downtown attraction and potentially increases transit ridership and encourages more activity adjacent to the Lodi Transit Station. In addition, the City has received over $550,000 in improvements to its asset and the WOW retail store produces sales tax revenue. FUNDING AVAILABLE: Not applicable. F. Wally ndelin PublicWorks Director FWS/pmf Attachments cc: Supervising Budget Analyst Transportation Manager/Senior Traffic Engineer WOW President I,(6-nr'adt Bartlam, City Manager K:\WP\PROJECTS\TRANSIT\WOW\ccfourthamendWOWlease.doc 8/4/2011 January 31, 2011 Mr. Konradt Bartlam Lodi City Manager PO Box 3006 Lodi, CA 95241 Dear Mr. Bartlam, The Board of Directors and Officers of the World of Wonders (WOW) Science Museum are requesting that the lease agreement between the City of Lodi, a municipal corporation and the World of Wonders Science Museum, a California Nonprofit Corporation be deferred for another year, commencing 2012. The WOW opened its doors on March 6, 2009. Over 9,000 school children have attended field study trips at the museum. We have drawn students from as far away as Gustine, the foothills and up to Elk Grove. 2,500 children have attended the science -themed birthday parties. In addition, more than 30,000 guests have visited during our public hours of operation. The WOW has now become a destination for many out of town tourists and is a wonderful asset to the City of Lodi. The majority of privately owned museums across the country have been financially supported by their local school districts, cities and counties. 60% of museums' revenue came from donations, grants and municipalities. In the last two years this percentage is now only 40%. Earned revenue through the doors of museums is now the major source of income. With the down turn of the economy in 2008, donations to the World of Wonders Science Museum dropped off drastically. The financial support has not yet stabilized, but the WOW Board is very encouraged that in 2011 the economy will turn around and.more community based donations will help to keep the doors open. With only;.tw o employees at this time and many dedicated volunteers, we believe that the World of Wonders:S66hc e Museum will be a valuable asset to the City of Lodi for many generations to come. This is..:a chit cal l ime for us to support science. We ask that you consider deferring the lease for another year so. we may continue to compliment the science education in our schools of the Central Valley and Foothills. Sincerely, -g, Sally Sn} \, President of the World of Wonders Science Museum THE MISSION OF THE WORLD OF WONDERS SCIENCE MUSEUM IS TO OFFER HANDS-ON SCIENCE -BASED EXHIBITS AND PROGRAMS TO STIMULATE JISCOlferlf FOR ALL AGES. President Sally Snyde Vice President Barbara den Hartog Treasurer Rich Mullenbach Secretary Anne Weisenberg Board of Directors: Dr. Kathryn Beckman Jay Bell Corey N. Daniel Jerry Fry Heather Marian! Cynthia Wagner Weick Wait Wolterstorff Tax Identification Number: 20-3075595 501(c)(3) Non -Profit Corporation iFr,ddress: 2 Garth Sacramento Street, Lodi, CA 95240 wchcwite, wwwf.WOWScienceMuseum.org phone.- 209.368.OVUCSW (09691 Eax; 209.369.1290 FOURTH AMENDMENT TO LEASE AGREEMENT WORLD OF WONDERS SCIENCE MUSEUM ------------------------------------------------------------------- ------------------------------------------------------------------- THIS FOURTH AMENDMENT TO LEASE AGREEMENT, entered into this day of , 2011, by and between the CITY OF LODI, a municipal corporation ("City"), and the World of Wonders Science Museum, a California Nonprofit Corporation (Tax I D No. 20-3075595) ("The W O W or "Lessee") shall be as follows: WHEREAS, the parties entered into a Lease Agreement dated February 1, 2007 to allow the construction of Tenant Improvements for and the operation of a Science Museum and Museum Store by The WOW in the Lodi Parking Structure space owned by the City and Council approved a FIRST AMENDMENT dated on December 19, 2007; a second Amendment dated February 4, 2009; and a third Amendment dated November 10, 2010; and WHEREAS, the Lease Agreement as amended requires that the payment of rent commence by February 1, 201 1; WHEREAS, The WOW has completed construction of the north half cf the Tenant Improvements, and opened for business. WHEREAS, in recognition of WOW's efforts and expected successful fundraising campaign, the Parties wish to extend WOW's deadline for the rent commencement date. NOW, THEREFORE, BE ITAGREED AS FOLLOWS: 1. Effect of Amendment. Except as expressly modified herein all terms of the Lease Agreement shall remain in full force and effect. 2. Rent: Paraaraoh six of the Lease Aareement shall be amended to read: No rent shall be required to be paid until February 1, 2013. The City Manager shall have the authority to grant two one-year extensions of this rent forbearance if in his or her sole discretion, economic conditions warrant the extension(s). Starting February 1, 2013 the WOW shall pay rent in the amount of $1,030.00 monthly (which is the equivalent of $1.29 per square foot rent per month for the estimated 800 square foot Museum Store.) to City. The WOW's monthly rental payment shall increase in each year of this Lease based upon the annual percentage change of The Consumers Price Index for All Urban Consumers (All Items), San Francisco -Oakland -San Jose Average, as published by The United States Department of Labor Statistics, for the month prior to the date the payment is due. Notwithstanding the foregoing, for any given year, The WOW's monthly rental payment shall increase by no less than 2.5%, and no more than 5.0%, per year. 3. FTA Approval: This lease amendment is subject to approval by the Federal Transit Administration. IN WITNESS WHEREOF, the parties hereto have set their hands the day and year first hereinabove mentioned. CITY OF LODI, a municipal corporation Konradt Bartlam, City Manager ATTEST: RANDI JOHL, J.D., City Clerk APPROVED AS TO FORM: D. STEPHEN SCHWABAUER City Attorney ' v WORLD OF WONDERS SCIENCE MUSEUM, a California Nonprofit Corporation as SALLY SNYDE, President 2 RESOLUTION NO. 2011-130 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO ENTER INTO FOURTH AMENDMENT TO WORLD OF WONDERS SCIENCE MUSEUM LEASE WHEREAS, the World of Wonders Science Museum entered into an agreement with the City on August 2, 2006, to develop the "shell" space attached to the downtown Lodi Transit Station parking structure as an interactive science museum focused on children; and WHEREAS, the World of Wonders Science Museum has engaged in a very successful campaign to raise funds and has invested $550,000 in improvements, plus in-kind contributions to the City -owned facility. It has obtained a collection of exhibits through the Exploratorium and has been open since March 2009; and WHEREAS, the museum is requesting more time to raise operating capital due to the existing economy; and WHEREAS, the Board of Directors of the World of Wonders Science Museum has requested that the City Council consider amending the current lease agreement as outlined below: A) Extend the commencement of rent obligations by two additional years and authorize the City Manager to grant two one-year extensions of this rent forbearance based on the City Manager's sole discretion if economic conditions warrant; and, B) Freeze the indexing of rent increases for two additional years plus the two one-year extended years, if applicable. The rent is to increase annually by the Consumer Price Index or 2.5 percent, whatever is larger. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize the City Manager to enter into a Fourth Amendment to the World of Wonders Science Museum Lease as outlined above; and BE IT FURTHER RESOLVED that this lease amendment is subject to approval by the Federal Transit Administration. Dated: August 17, 2011 hereby certify that Resolution No. 2011-130 was passed and adopted by the City Council of the City of Lodi in a regular meeting held August 17, 2011, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Katzakian, Mounce, Nakanishi, and MayorJohnson NOES: COUNCIL MEMBERS —None ABSENT: COUNCIL MEMBERS— None ABSTAIN: COUNCIL MEMBERS— None 6ND H L rk 2011-130 CITY COUNCIL BOB JOHNSON, Mayor JOANNE L. MOUNCE, Mayor Pro Tempore LARRY D. HANSEN PHIL KATZAKIAN ALAN NAKANISHI CITY OF LODI PUBLIC WORKS DEPARTMENT CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 (209) 333-6706 FAX (209) 333-6710 EMAIL pwdept@lodi.gov http:\\www.lodi.gov August 11,2011 World of Wonders Science Museum Sally Snyde, President 2 N. Sacramento Street Lodi, CA 95240 SUBJECT: Adopt ResolutionAuthorizing City Managerto Enter into Fourth Amendment to World of Wonders Science Museum Lease KONRADT BARTLAM City Manager RANDI JOHL City Clerk D. STEVEN SCHWABAUER City Attorney F. WALLY SANDELIN Public Works Director Enclosed is a copy of background information on an item on the City Council agenda of Wednesday, August 17, 2011 . The meeting will be held at 7 p.m. in the City Council Chamber, Carnegie Forum, 305 West Pine Street. This item is on the consent calendar and is usually not discussed unless a Council Member requests discussion. The public is given an opportunityto address items on the consent calendar at the appropriate time. If you wish to write to the City Council, please address your letterto City Council, City of Lodi, P. O. Box 3006, Lodi, California, 95241-1910. Be sure to allow time for the mail. Or, you may hand-deliverthe letterto City Hall, 221 West Pine Street. If you wish to address the Council at the Council Meeting, be sure to fill out a speaker's card (available at the Carnegie Forum immediately prior to the start of the meeting) and give it to the City Clerk. If you have any questions about communicating with the Council, please contact Randi Johl, City Clerk, at (209) 333-6702. If you have any questions about the item itself, please call me at (209) 333-6709. F. Wally Sandelin jlr Public Works Director FWS/pmf Enclosure cc: City Clerk NCUOURTHAMENDWOWLEASE.DOC