HomeMy WebLinkAbout2025-01-28; City Council; 11; Loan Request from New Village Arts in the amount of $893,259 for the New Village Arts Tenant Improvement ProjectCA Review AZ
Meeting Date: Jan. 28, 2025
To: Mayor and City Council
From: Geoff Patnoe, City Manager
Staff Contact: Curtis M. Jackson, Real Estate Manager
curtis.jackson@carlsbadca.gov, 442-339-2836
Subject: Loan Request from New Village Arts in the amount of $893,259 for the
New Village Arts Tenant Improvement Project
District: 1
Recommended Actions
1. Provide direction to staff regarding a loan request from New Village Arts in the amount
of $893,259 for the New Village Arts Tenant Improvement Project.
2. Consider adopting a resolution appointing the City Manager, or designee, as the city’s
real estate negotiator to negotiate a loan agreement with modified lease terms with
representatives of New Village Arts.
Executive Summary
The City Council approved a new 10-year lease agreement for the former Bauer Lumber
Building at 2787 State St. with New Village Arts, or NVA, in 2021. The lease and the construction
and reimbursement agreement approved along with the lease provided for the city to
contribute an amount not to exceed $573,000 for work on the building, specifically, $103,000
for installation of solar panels and $470,000 for exterior improvements to its south and east
walls.
NVA completed the exterior improvements and received reimbursement of $470,000 in 2022
but has yet to install solar panels and seek reimbursement of the remaining $103,000
authorized by the City Council in 2021.
While NVA anticipated that the total tenant improvement costs for the building would be
approximately $2,000,000, NVA reports the total cost of its renovation totaled $3,100,000.
After completion of the renovation, NVA submitted a request to the city in January 2023 for
additional reimbursement funds of $228,411. On Jan. 24, 2023, the City Council elected not
grant NVA’s additional reimbursement request for $228,411 and directed staff to determine
whether NVA was interested in a loan for the amount requested. At that time, NVA declined to
pursue a loan with the city.
NVA is now requesting a loan from the city in the amount of $893,259 (Exhibit 2). This new
request would require direction from the City Council, negotiation between city staff and NVA,
Jan. 28, 2025 Item #11 Page 1 of 21
and approval of a loan agreement by the City Council. Staff request that the City Council
provide direction to staff regarding the loan request from New Village Arts in the amount of
$893,259 for the New Village Arts Tenant Improvement Project.
Explanation & Analysis
NVA is requesting a $839,259 loan from the city through Dec. 31, 2025. The funds would be
used by NVA to retire a capital improvement loan with Endeavor Bank in the amount of
$839,259 resulting from cost overruns associated with the building renovations NVA completed
to the city’s building in 2021-22. NVA’s loan with Endeavor Bank is past its original term, and
NVA is currently making monthly interest-only payments on the loan at over $7,000 per month.
NVA was recently awarded a dollar-for-dollar matching grant from the Prebys Foundation up to
a total grant of $625,000. Accordingly, NVA has initiated a capital fundraising campaign to raise
$625,000 by the Presby Foundation deadline of Dec. 31, 2025. If NVA is successful in its
fundraising campaign, the Prebys Foundation will match the funds raised by NVA, for a total
fundraising amount of $1,250,000. If the overall fundraising campaign is realized, NVA will use
the $1,250,000 in total funds to retire the balance of its building renovation debt, including the
$839,259 loan it is requesting from the city.
NVA and the Prebys Foundation have established specific fundraising goals around the raising
and receipt of donor funds over the 2025 calendar year. Those specific goals are as follows:
Target date Donation goal Prebys match Total
Dec. 31, 2024 $125,000 $125,000 $250,000
June 30, 2025 $250,000 $250,000 $500,000
Dec. 31, 2025 $250,000 $250,000 $500,000
TOTAL $625,000 $625,000 $1,250,000
NVA was successful in meeting its Dec. 31, 2024 fundraising goal of $125,000, and will be
receiving $125,000 in matching funds from the Prebys Foundation by the end of January 2025.
NVA is proposing to pay 3% annual interest and make interest-only payments on the city loan in
an amount of $2,233 per month or less through Dec. 31, 2025, as the loan balance is reduced
through its fundraising campaign and the Prebys Foundation matching grant.
In addition to the proposed interest-only payments, NVA is proposing a repayment schedule for
the requested city loan. As NVA fundraises and receives matching funds from the Prebys
Foundation grant, NVA will use 70% of the funds raised (i.e., donor funds and matching grant
funds) to repay the requested city loan based on the dates in the table above (i.e. date of loan
agreement approval, June 30, 2025, and Dec. 31, 2025). If any loan balance remains at the end
of 2025, NVA is proposing that the loan balance be amortized or converted into an equivalent
lease payment over the remaining term of the lease, which is about 16 years. The repayment of
any remaining loan balance through lease payments will be contingent upon NVA’s financial
standing.
Both the lease and the construction and reimbursement agreement approved by the City
Council in 2021 specify that the tenant improvement project was NVA’s sole financial
responsibility. The terms of the agreements only authorized the city to reimburse NVA for a
Jan. 28, 2025 Item #11 Page 2 of 21
portion of the costs of the improvements, $470,000 for the exterior improvements and up to
$103,000 toward installation of solar panels, for a total of $573,000. NVA remains responsible
for the overall cost of the project, including the cost overruns. No allowance for the city to
reimburse NVA for cost increases due to inflation, prevailing wage requirements, supply chain
challenges or any other reason was included in either agreement.
Staff request that the City Council provide direction to staff as to whether or not to consider a
city loan to NVA in the amount of $893,259 and initiate negotiations for a loan agreement. If
the City Council provides direction to staff to pursue negotiations for a loan agreement that
also modifies NVA’s lease terms, then staff recommend that the City Council adopt a resolution
appointing the City Manager, or designee, as the city’s real estate negotiator to negotiate a
loan agreement with modified lease terms with representatives of New Village Arts. (Exhibit 1).
Fiscal Analysis
There is no direct fiscal impact associated with the City Council directing staff to initiate
negotiations on a loan agreement, and if requested, appointing the City Manager, or designee,
as the city’s real estate negotiator to negotiate a loan agreement with modified lease terms
with representatives of New Village Arts. Should negotiations result in acceptable loan terms,
city staff will return to the City Council with the loan agreement, and if applicable, modified
lease terms for the City Council’s consideration. If the City Council approves a loan agreement,
funding in the amount of $893,259 would be appropriated at that time from the city’s General
Fund Reserve.
Next Steps
If the City Council directs staff to pursue a loan agreement with modified lease terms with NVA,
staff will schedule a subsequent closed session item with the City Council to discuss terms. If
the City Council directs staff to pursue a loan agreement without modifying lease terms, staff
will not schedule a closed session. Based on City Council direction, staff will initiate negotiations
with NVA. If there is consensus on acceptable loan terms, staff will return to the City Council at
a future date with a loan agreement, and if applicable, modified lease terms for the City
Council’s consideration.
Environmental Evaluation
This action does not constitute a project within the meaning of the California Environmental
Quality Act under California Public Resources Code Section 21065 in that it has no potential to
cause either a direct physical change or a reasonably foreseeable indirect physical change in the
environment.
Exhibits
1.City Council resolution
2.New Village Arts request for additional city funding, letter dated Oct. 30, 2024
3.City Council Staff Report dated Jan. 24, 2023
Jan. 28, 2025 Item #11 Page 3 of 21
RESOLUTION NO. 2025-028
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPOINTING THE CITY MANAGER, OR DESIGN EE, AS THE CITY'S
REAL ESTATE NEGOTIATOR TO NEGOTIATE A LOAN AGREEMENT WITH
MODIFIED LEASE TERMS WITH REPRESENTATIVES OF NEW VILLAGE ARTS
WHEREAS, on November 20, 1997, the Carlsbad Redevelopment Agency acquired the property
located on the northeast corner of State Street and Christiansen Way at 2787 State Street in the
Carlsbad Village (Property) with proceeds from tax exempt bonds issued in 1993; and
WHEREAS, on September 26, 2006, the City Council approved a lease agreement with New
Village Arts (NVA) for the purpose of operating a performing arts theater in the rear 6,300 square feet
of the Property by Resolution No. 2006-429; and
WHEREAS, on June 23, 2009, the City Council approved a lease agreement with NVA, expanding
the leased area to include the front 3,100 square feet of the Property, for a revised total of 9,400 square
feet of leased space, to incorporate an arts incubator on the Property by Resolution No. 2009-471; and
WHEREAS, on April 12, 2019, the City Council approved a five-year lease agreement with NVA
by Resolution No. 2019-045; and
WHEREAS, on July 27, 2021, the City Council approved a new ten year lease agreement with
two five-year extension options, which included a rent payment of $1.00 per year, and proposed
approximately $2 million in renovations to the Property, with a request for the city to reimburse NVA
up to a total of $573,000.00 for renovations related to the installation of solar panels ($103,000.00)
and exterior improvements ($470,000.00); and
WHEREAS, NVA completed the exterior improvements and received reimbursement of
$470,000.00 in 2023, but has yet to install solar panels and seek reimbursement of the remaining
$103,000.00 authorized by the City Council in 2021; and
WHEREAS, the total cost of its renovation of the building totaled $3,100,000.00; and
WHEREAS, in January 2023, NVA submitted a request to the city for additional reimbursement
funds of $228,411.00. Thereafter, on Jan. 24, 2023, the City Council elected not to reimburse NVA for
its additional reimbursement request of $228,411.00 and directed staff to determine whether NVA was
interested in a loan for the amount requested. At that time, NVA declined to pursue a loan with the
city; and
WHEREAS, NVA is now requesting a loan from the city in the amount of $893,259.00 to be paid
back by December 31, 2025 through its fundraising efforts and matching funds from the Presbys
Foundation; and
WHEREAS, NVA also requests that any remaining unpaid loan balance as of December 31, 2025
be converted into an equivalent lease payment over the remaining term of the lease, which is
approximately 16 years; and
WHEREAS, the repayment of any remaining loan balance through lease payments will be
contingent upon NVA's financial standing; and
WHEREAS, staff are recommending the City Council appoint the City Manager, or designee, as
the city's real estate negotiator to negotiate a loan agreement with modified lease terms with
representatives of New Village Arts in an amount up to $893,259 .00; and
WHEREAS, California Government Code Section 54956.8 requires that a local agency hold an
open and public session in which it identifies its negotiators, the real property or properties which the
negotiations may concern, and the person or persons with whom its negotiators may negotiate.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That the City Manager, or designee, is authorized to negotiate a loan agreement with NVA
in an amount up to $893,259.00.
3. That staff will schedule a subsequent closed session item with the City Council to discuss
modification of NVA's lease terms.
4. That if the negotiations result in acceptable terms, city staff will return to the City Council
in an open meeting with the loan agreement and modified lease terms for consideration.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 28th day of January 2025, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
None.
None.
None.
SHERRY
(SEAL)
Mr. Scott Chadwick
City Manager
CITY OF CARLSBAD
1200 Carlsbad Village Drive
Carlsbad, CA 92008
October 30, 2024
RE: New Village Arts Theater Loan Request
Mr. Chadwick:
We appreciate your patience with us as we have been busy developing alternatives to
the proposal we made this past May 2024. At that time we were requesting a $1.3M
loan to pay back capital debts that were the result of inflationary cost overruns for the
building renovations we constructed in 2021-22. The advice we received from your
staff at the time was to pursue alternatives that might provide additional participants in
the relief from the debt. We are pleased to inform you that we have been successful in
that pursuit but we still need some assistance from the City.
The Prebys Foundation Board recently approved a $1:$1 matching grant to NVA for a
total of $625,000, meaning, if we are successful in our campaign to raise $625,000,
then a total of $1.25M will be used to retire our building renovation debts. The
Foundation also awarded an additional $125,000 in resources to help guide our capital
campaign over the term of the matching grant through December 31, 2025. We have
initiated that effort now with Prebys and have been successful in raising our first
$50,000 towards the match.
However, we are still respectfully requesting financial assistance from the City, the
owner of the building. We have a capital improvement loan with Endeavor Bank that
has a remaining principal balance of $893,259, which is past its original term and on
which we are making monthly interest-only payments. Those payments are currently
over $7,000 per month and New Village Arts needs to lower the interest rate/payments
over the next 12 months to be successful with the challenge grant from the Prebys
Foundation. Our request of the City is in the form of a $893,259 loan through
December 31, 2025 with interest-only payments to allow us to retire the Endeavor
Bank loan.
Our intent is to raise $625,000 in donor capital, together with the Prebys Foundation
$625,000 matching grant to payback the City Loan at the end of the term. We will also
set priorities around the receipt of capital campaign donor funds to repay the City Loan
over the next year.
The projected tranches of the Prebys Foundation grant match and goals for donor
capital raised are as follows:
Raise/Grant
Tranches By Date Donation Goal Prebys Match Total
December 31, 2024 $125,000 $125,000 $250,000
June 30, 2025 $250,000 $250,000 $500,000
December 31, 2025 $250,000 $250,000 $500,000
TOTAL $625,000 $625,000 $1,250,000
Kristianne Kurner
Founder and Executive
Artistic Director
BOARD OF
DIRECTORS
AJ Knox, PhD
President
Mary Kerr
Treasurer
Milena (Sellers)
Phillips
Secretary
Merryl Goldberg
Kristianne Kurner
Katie Keller
AJ Knox
Christy Rosa, M.D
Lou Storrow
Daniel Watts
DeMilo Young
Scott White,
Emeritus
NVA Advisory Board
Don Sciglimpaglia,
Chair
Mark Caruana
Kathy Deering
Haley DiDonato
Shawnta Fleming
Paul Hay
Chris Ing
Richard Kuranda
Cassie Langan
Monica Martin
Gina McBride
Julie Nygaard
Justin Peek
Shari Roberts
Jay Sarno
Becky Sciglimpaglia
NVA is a 501(c)(3)
Non-Profit Organization
Tax ID #52-2320930
Exhibit 2
Jan. 28, 2025 Item #11 Page 7 of 21
2
Our loan repayment commitment to the City is as we raise capital and receive matching grants on the Tranche
dates above, we will utilize 70% of the funds to repay the City Loan. To the extent there is any remaining
principal balance in the City Loan at the end of 2025, then we propose that the remaining balance would be
amortized over the remaining term of the lease with extensions (16 years) or converted to an equivalent lease
amount over the remaining 16-year term.
To be specific, the following is a summary of our request:
Loan Amount: $893,259
Use of Proceeds: To pay off short term capital cost debt in the remaining balance of the Endeavor Bank
Loan associated with the improvements to the NVA building owned by the City.
Term: Through December 31, 2025 with interest only payments;
Any remaining Principal Balance to be extended for 16 Years (Remaining
Term of the Lease plus Extensions)
Interest Rate: 3% per annum
Monthly Payments: Interest only payments of $2,233 per month or less as the Principal
Balance is reduced through the capital campaign with the Prebys
Foundation matching grant.
Any remaining Principal Balance at the end of the initial term is requested
to be amortized over the remain Lease Term of 16 years or converted into
an equivalent lease payment.
We realize this is still a substantial request and that the proposed interest rate of 3% per annum
is below conventional loan rates but we also believe the future of culture and entertainment in
Carlsbad merits the extension of a loan. The New Village Arts Theater has long been an
important social and cultural hub for the residents of the City of Carlsbad. In the past fiscal year,
the NVA has hosted over 360 events, including our outstanding, award-winning theatrical
content on the Ray Charles Stage and hundreds of community-facing events on our White
Family Next Stage fronting State Street in Carlsbad Village. We have been able to expand our
offerings this year to include Salsa Nights, Comedy Clubs, Silent Discos, Jazz Nights, Poetry
Readings and Opera Nights. The NVA has been an economic engine for Carlsbad
Village, driving more diners and shoppers onto State Street, and visitors have come from all
corners of Southern California and from out-of-state to enjoy our programming. We’ve also
attracted sponsors like the Ray Charles Foundation, the Prebys Foundation and hosted our
annual gala on-site for the first time with record financial success. Our operating business plan
is sustainable, and we are proud of what our small but mighty staff has accomplished this past
year.
We would appreciate a discussion of this request at your earliest convenience. We appreciate our
partnership with the City in continuing to bring culture and economic activity to the Village.
Sincerely,
Kristianne Kurner
Founder and Executive Artistic Director
Jan. 28, 2025 Item #11 Page 8 of 21
CA Review ___AF___
Meeting Date:
To:
From:
Staff Contact:
Subject:
District:
Jan. 24, 2023
Mayor and City Council
Scott Chadwick, City Manager
Curtis Jackson, Real Estate Manager
curtis.jackson@carlsbadca.gov, 442-339-2836
Request for $228,411 in Additional City Funding for the New Village Arts
Tenant Improvement Project
1
Recommended Action
Consider New Village Arts request for $228,411 in additional city funding for the New Village
Arts Tenant Improvement Project, discuss options and provide direction to staff.
Executive Summary
The City Council approved a new 10-year lease agreement for the former Bauer Lumber
Building at 2787 State St. with New Village Arts, or NVA, in 2021. The lease and the construction
agreement approved along with it provided for the city to contribute an amount not to exceed
$573,000 for work on the building, $103,000 for installation of solar panels and $470,000 for
exterior improvements to its south and east walls.
At the time, NVA anticipated that the total tenant improvement costs for the property would
exceed $2,000,000. Under the terms of the lease and the construction agreement, NVA is
responsible for the total cost of the tenant improvement project, but may receive
reimbursement of up to $573,000 from the city for the installation of solar panels and certain
exterior improvements.
NVA is now requesting $228,411 in additional city funding for the New Village Arts Tenant
Improvement Project (Exhibit 1). This new request would require the City Council’s approval. If
it is approved, staff will then need to develop either an amendment to the lease and the
construction agreement or a grant agreement and resolution for the City Council’s approval.
Explanation & Analysis
Lease agreement history
The Carlsbad Redevelopment Agency acquired the former Bauer Lumber Building, on the
northeast corner of State Street and Christiansen Way in the Village, for the city in 1997 with
Jan. 24, 2023 Item #14 Page 1 of 4
Exhibit 3
Jan. 28, 2025 Item #11 Page 9 of 21
proceeds from tax exempt bonds issued in 1993.1 The bonds used to purchase the property will
reach their maturity date and be paid off by September 2023.
The building is 9,400 square feet and was divided into two suites, 6,300 square feet in the rear
of the building for theater performances and 3,100 square feet in front on State Street for an
arts incubator. NVA has leased the rear 6,400 square-foot space from the city since 2006 and
has been the sole occupant of the entire property since 2009.
On July 27, 2021, the city and NVA entered into a new 10-year lease agreement with two five-
year extension options, and a rental rate of one dollar ($1.00) per year (Resolution No. 2021-
182). As part of the new lease agreement, NVA agreed that improvements to the interior and
exterior of the property would exceed $2 million.
The city agreed to reimburse NVA up to $470,000 for certain exterior improvements to the
south and east walls of the building and $103,000 toward installation of solar panels as part of
this tenant improvement project, for a total of $573,000. The City Council also allocated
$40,000 for the city to contract with a construction manager to ensure the project was being
built to city standards and following city protocol. The lease also required a construction and
reimbursement agreement between the city and NVA which detailed the terms by which NVA
could receive reimbursement of up to $573,000 for the cost of the tenant improvement project,
with the understanding that the city was not responsible for the cost of the overall tenant
improvement project, including possible cost overruns.
Maintenance of property
• As part of the fiscal year 2017-18 budget process, the City Council approved a project to
replace the roof and repair and replace siding on the south and west walls of the
building leased (Capital Improvement Program Project No. 4739).
• In early 2019, Alex Goodman, NVA’s Managing Director, requested revisions to the
proposed scope of work, including deleting renovation of the south wall.
• On July 28, 2020, the City Council approved plans and specifications and authorized
advertisement for bids to repair the building’s roof and refurbish the western wall
(Resolution No. 2020-160).
• On Sept. 22, 2020, the City Council approved a contract to commence the repairs and to
increase the budget for the renovations an additional $60,000, from $253,626 to
$313,626 (Resolution No. 2020-192).
• Repairs and renovations to the building were completed in January 2021. The total cost
of the roof and west wall renovation project was $292,637.
Cultural Arts grants to NVA
Since 2013, the city has supported NVA with the award of 27 art grants totaling $206,638,
which includes $50,000 for a new mural on the west wall of the building, which has recently
been completed.
1 The Carlsbad Redevelopment Agency was dissolved in 2012, as required by state law.
Jan. 24, 2023 Item #14 Page 2 of 4Jan. 28, 2025 Item #11 Page 10 of 21
NVA’s request for additional funding
NVA requested an additional $228,411 in city funds to support NVA’s tenant improvement
project in a letter the city received Jan. 3, 2023 (Exhibit 1).
Both the lease and the construction and reimbursement agreement specify that the tenant
improvement project is NVA’s sole financial responsibility. The terms of the agreements only
authorize the city to reimburse NVA for a portion of the costs of the improvements, not to
exceed $470,000 for the exterior improvements and up to $103,000 toward installation of solar
panels, for a total of up to $573,000. NVA is responsible for the overall cost of the project,
including any cost overruns. No allowance for the city to reimburse NVA for cost increases due
to inflation, prevailing wage requirements, supply chain challenges or any other reason was
included in either agreement.
Fiscal Analysis
The fiscal impact of this item depends upon the direction the City Council provides. If the City
Council chooses to approve the request, staff will return with appropriate funding
recommendations, with one being an allocation from the City Council Contingency Fund. The
current available balance of the City Council Contingency Fund in fiscal year 2022-23 is
$492,223.
Options
Although the city is not required to reimburse NVA for the requested $228,411 in additional
funds as requested, if the City Council would like to consider providing NVA with additional
funding, staff provide two potential funding options below.
Staff provide the following three options for the City Council’s consideration:
1. Approve New Village Arts’ request for up to $228,411 in additional city funding for the
New Village Arts Tenant Improvement Project and direct staff to return to the City
Council in closed session to discuss the price and terms of a lease amendment, and a
subsequent amendment to the construction and reimbursement agreement.
2. Approve New Village Arts’ request for additional city funding for the New Village Arts
Tenant Improvement Project and direct staff to return to the City Council with a grant
agreement and resolution allocating up to $228,411 from the City Council Contingency
Fund to NVA.
3. Deny New Village Arts’ request for additional city funding for the New Village Arts
Tenant Improvement Project.
Environmental Evaluation
This action does not constitute a project within the meaning of the California Environmental
Quality Act under California Public Resources Code Section 21065 in that it has no potential to
cause either a direct physical change or a reasonably foreseeable indirect physical change in the
environment.
Next Steps
Based on City Council direction, staff will proceed accordingly.
Exhibits
1. New Village Arts request for additional city funding, letter dated Jan. 3, 2023
Jan. 24, 2023 Item #14 Page 3 of 4Jan. 28, 2025 Item #11 Page 11 of 21
Scott Chadwick City Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
January 3, 2023
Dear Mr. Chadwick,
We are thrilled to share that we are about to re-open New Village Arts! We are proud to be
achieving the goals set by the City to create evening entertainment and activities that
encourage public interaction and positive pedestrian traffic in Carlsbad Village and help to
revitalize the retail and dining environment with exciting entertainment opportunities.
The grand re-opening of the Dea Hurston New Village Arts Center is scheduled for February
2023 and will coincide with NVA’s production of Jez Butterworth’s THE FERRYMAN. The show
won the 2019 Tony Award for Best Play and NVA will be the first theatre company outside of
New York and London to present this astonishing play. This will bring national attention to
Carlsbad and we are proud to share it with our community.
When the Dea Hurston New Village Arts Center re-opens, it will be a true cultural gathering
space for our community. The robust plan for the Sahm Foundation Arts Education Center
includes weekday classes for all ages from 9am to 9pm and weekend activities focused on the
children in our community. The White Family Next Stage will bring music, poetry, discussion
groups and more to the heart of Carlsbad Village. And New Village Arts will continue its highly
acclaimed and award-winning professional theatre in the Conrad Prebys Theatre. It will also be
a place where you can come for a cup of coffee and interact with local visual art and even be
able to make your own art projects!
When New Village Arts presented this project to the City of Carlsbad in May of 2019, the project
was an estimated $1.2 million, with an anticipated final cost to NVA of $730,000 and cost to the
city of $573,000. Three and a half years later, with a new construction company and
architectural team, and with increases in market conditions and inflation, the same project
scope is coming in at a total cost of $3.1 million. New Village Arts is requesting an increase
of $228,411 in support from the City of Carlsbad.
All of us at New Village Arts are incredibly grateful for the ongoing support of the City of
Carlsbad and we certainly would not be able to do any of this without that support. We hope
that the City will see the importance of finishing this project successfully and creating a thrilling
cultural gathering space for our community.
Please feel free to reach out to us with any questions or for any additional information.
With gratitude,
Kristianne Kurner Rae Henderson-Gray
Founder and Executive Artistic Director Managing Director
cc:
Assistant City Manager Gary Barberio
Real Estate Manager Curtis Jackson
Assistant City Attorney Allegra Frost
Public Works Manager John Maashoff
Robert Polley, Senior Construction Manager, SchneiderCM
Kristianne Kurner
Executive Artistic Director
Rae Henderson-Gray
Managing Director
Joan Cumming
President
Saundra
Redmond-Moton
Vice President
Mary Kerr
Treasurer
Lauren Segovia
Secretary
Board Members at Large
John Harelson
Kristianne Kurner
Katie Keller
AJ Knox
Robert Lin
Sue Loftin
Christy Rosa Mohler, M.D
Milena (Sellers) Phillips
Lou Storrow
Scott L. White
DeMilo Young
NVA Advisory Board
Rosemary Eshelman, Chair
Ariel Bedell
Mark Caruana
Kathy Deering
Fred Deutsch
Haley DiDonato
Mea Hall
Walt & Sharon Hambly
Pat Hansen
Julie Nygaard
Pat Hurley
Emma Jadhav
Chelsea Kaufman
Richard Kuranda
Cassie Langan
Linda Ledesma
Gina McBride
Christine Ileto Pangan
Justin Peek
Shari Roberts
Jay Sarno
Don & Becky Sciglimpaglia
NVA is a 501(c)(3)
Non-Profit Organization
Tax ID #52-2320930
New Village Arts, Inc.
2787 State St.
Carlsbad, CA 92008
760.433.3245
info@newvillagearts.org
www.newvillagearts.org
Exhibit 1
Jan. 24, 2023 Item #14 Page 4 of 4
NEW VILLAGE ARTS
Jan. 28, 2025 Item #11 Page 12 of 21
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Jan. 28, 2025 Item #11 Page 21 of 21
Curtis Jackson, Real Estate Manager
Gary Barberio, Deputy City Manager
January 28, 2025
Loan Request from New Village Arts in the amount of $893,259 for
the New Village Arts Tenant Improvement Project
RECOMMENDED ACTION
1.Provide direction to staff regarding a loan request from New Village Arts in the
amount of $893,259.
2.Consider adopting a resolution appointing the City Manager, or designee, as the city’s
real estate negotiator.
New Village Arts Funding Request
HISTORY OF PROJECT
•The 9,400 SF Bauer Lumber building acquired in 1997
•NVA has leased the building since 2006
•10-year lease (with two, five-year extensions) approved in July 2021
•Construction & Reimbursement Agreement approved
–City to contribute up to $573,000 for building improvements
•Tenant Improvement Project completed 2022
New Village Arts Funding Request
LEASE OBLIGATIONS
New Village Arts Funding Request
•Under the Lease Agreement and the
Construction and Reimbursement Agreement,
the city is under no legal obligation to
provide additional funding to NVA
New Village Arts Funding Request
NEW VILLAGE ARTS PROJECT
•Original Project Cost Estimate: $2,000,000
–City contribution: Up to $573,000
•Actual Project Cost: New Village Arts: $3,100,000
New Village Arts Funding RequestLOAN REQUEST
•Loan request from City: $893,259
•Loan Purpose: Satisfy construction loan debt
•Prebys Foundation: $1:$1 matching grant up to $625,000
–Three Tranch Goals:
•$125,000 by Dec. 31, 2024 (achieved)
•$250,000 by June 30, 2025
•$250,000 by Dec. 31, 2025
•Loan Repayment: By Dec. 31, 2025
•Any Remaining Amortized over life of Lease
NEXT STEPS
New Village Arts Funding Request
If the City Council directs staff to pursue a loan agreement with modified lease terms with
NVA, staff will:
1)Schedule a subsequent closed session item with the City Council to discuss terms.
2)Based on City Council direction, staff will initiate negotiations with NVA.
3)Return to City Council with a Draft Loan and Lease Amendment.
RECOMMENDED ACTION
1.Provide direction to staff regarding a loan request from New Village Arts in the
amount of $893,259.
2.Consider adopting a resolution appointing the City Manager, or designee, as the city’s
real estate negotiator.
New Village Arts Funding Request