HomeMy WebLinkAbout2016-07-12; City Council; 22324; Ratifying first amendment to lease agreement with New Village Arts to operate theater and arts incubator at 2787 State StCITY OF CARLSBAD-AGENDA BILL 3
AB# 22,324 RATIFYING FIRST AMENDMENT TO DEPT. DIRECTOR t?'r:!J
DATE. 7/12/16 LEASE AGREEMENT WITH CITY ATTY. ;-};--
THE NEW VILLAGE ARTS
TO OPERATE A THEATER AND ARTS INCUBATOR vvV DEPT. City Manager AT 2787 STATE STREET CITY MGR.
RECOMMENDED ACTION:
Adopt Resolution ratifying the City Manager's execution of the First Amendment to the lease
agreement with New Village Arts ("NVA") to operate a theater and arts incubator at the city-owned
property located at 2787 State Street.
ITEM EXPLANATION:
On November 20, 1997, the Carlsbad Redevelopment Agency acquired the property located at 2787
State Street in the Carlsbad Village ("Subject Property"). The building is 9,400 square feet in size and is
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. The Subject Property was acquired with
tax exempt bond proceeds with the intent of facilitating redevelopment of the site in conjunction with
properties located at the corner of Grand Avenue and State Street at a future date. In September 2006,
due to a lack of demand for commercial development in the village, the city leased the rear 6,300
square feet to New Village Arts for a two-year period with an option to extend the lease one additional
year in what was to be an interim use until development on the site was viable.
In June 2009, the city entered into another two-year lease agreement with NVA, further expanding the
footprint of the lease to include Suite "A" which had previously been occupied by a quilt shop. NVA
continuously occupied the Subject Property until April 2014, at which point the city entered into a new
lease agreement ("Agreement") with NVA for three years with the option for the city to extend the
lease for two additional one-year periods. The initial three-year term expired on June 30, 2016. The
parties were not able to agree on the terms of the First Amendment to the Agreement in time for the
June 27 City Council meeting, so staff requests that City Council ratify the City Manager's execution of
the First Amendment.
DEPARTMENT CONTACT: Curtis M. Jackson 760-434-2836 curtis.jackson@carlsbadca.gov
FOR CLERK USE.
COUNCIL ACTION: APPROVED lS( CONTINUED TO DATE SPECIFIC D
DENIED D CONTINUED TO DATE UNKNOWN D
CONTINUED D RETURNED TO STAFF D
WITHDRAWN D OTHER-SEE MINUTES D
AMENDED D REPORT RECEIVED D
Item#3-AB#22,324 July 12, 2016 Page 1 of 8
As part of NVA's request to extend the Agreement, NVA has requested the city repair various exterior
items on the building; specifically the rear exterior wall and various exterior wall panels adjacent to the
public right-of-way. To assist in defraying some of the city's costs for such repairs, the city and NVA
have negotiated a fifty cent ($0.50) payment per ticket sold over the next year of the Agreement.
Should the city agree to extend the Agreement for a second one-year term, the payment would
increase to seventy-five cents ($0.75) per ticket sold. In addition, prevailing wage language is being
added to the Agreement that requires NVA to pay prevailing wage for any construction, alteration,
demolition, or repair work. The prevailing wage language is being added to comply with state law.
FISCAL IMPACT:
The term of the Agreement provides for an annual payment of one dollar ($1.00). Metrics will be
reported by NVA on an annual basis to ensure that their operations continue to support the city's long
term economic development goals for the downtown village. Revenue from the fifty cent ($0.50) per
ticket payment is estimated to generate $5,000 over the one year period to contribute towards exterior
repairs of the building.
ENVIRONMENTAL IMPACT:
The proposed action is categorically exempt from the California Environmental Quality Act ("CEQA") per
State CEQA Guidelines Section 15301-Existing Facilities. Section 15301 exempts the leasing of property
involving negligible or no expansion of use beyond that existing at the time of lead agency's
determination.
EXHIBITS:
1. Resolution ratifying the City Manager's execution of the First Amendment to the Lease
Agreement with New Village Arts to operate a theater and arts incubator at 2787 State Street.
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RESOLUTION NO. 2016-142
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, RATIFYING THE CITY MANAGER'S EXECUTION OF THE
FIRST AMENDMENT TO THE LEASE AGREEMENT WITH NEW
VILLAGE ARTS TO OPERATE A THEATER AND ARTS INCUBATOR AT
2787 STATE STREET
WHEREAS, the city council has determined it is in the best interest of the city to grant
the first one-year extension contained within the Lease Agreement with New Village Arts for
city-owned property located at 2787 State Street; and
WHEREAS, the extension of this lease will further the goals and objectives of the Arts
Element of the City of Carlsbad's General Plan, specifically objectives which promote
permanent facilities for exhibition, performance, rehearsat discussion, or teaching of visual and
performing arts and cultural endeavors, and which encourages residents and visitors to
practice, participate, and observe artistic and cultural activities; and
WHEREAS, the initial term of the Lease Agreement expired on June 30, 2016; and
WHEREAS, the parties were not able to agree on the terms of the First Amendment to·
the Lease Agreement in time for the June 27 City Council meeting, but have now agreed on the
terms; and
WHEREAS, the City Manager executed the First Amendment to the Lease Agreement on
or before June 30, 2016 to avoid termination of the Lease Agreement; and
WHEREAS, the First Amendment to the Lease Agreement with New Village Arts modifies
the terms of the Lease Agreement to: (1) include an additional rent payment of $0.50 per ticket
sold to assist in covering Lessor's costs to maintain, repair, or improve the Premises, if any; and
(2) include provisions regarding payment of prevailing wage for tenant improvements.
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
California, as follows that:
1. The above recitations are true and correct.
2. The City Manager's execution of the First Amendment to the Lease Agreement
with New Village Arts, attached hereto as Exhibit A, is ratified.
3. The City Manager is delegated authority to extend the Lease Agreement for one
additional year following the expiration of the First Amendment.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the 12th of July, 2016, by the following vote to wit:
AYES: Hall, Wood, Schumacher, Blackburn, Packard.
NOES: None.
ABSENT: None.
~Oa~~tn ARBA ENGLESON, City rk
(SEAL)
Item#3-AB#22,324 July 12, 2016 Page 4 of 8
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment to Lease Agreement ("First Amendment") is effective as of July 1, 2016 (the
"Effective Date"), by and between the City of Carlsbad, a municipal corporation of the State of California ("Lessor" or
"City")) and New Village Arts, a California tax exempt non-profit public benefit corporation organized under Section
501(c)(3) of the U.S. Internal Revenue Code ("Lessee") (collectively, "Parties"), for the property located at 2787
State Street, California, 92008.
RECITALS
WHEREAS, the Parties entered into that certain Lease Agreement, dated July 1, 2013 ("Agreement"), for the
property located at 2787 State Street, Carlsbad, California ("Premises") consisting of approximately 9,400 square
feet of commercial building space;
WHEREAS, the renewal of this lease will further the goals and objectives of the Arts Element of the City's
General Plan, specifically objectives B.1 which promote permanent facilities for exhibition, performance, rehearsal,
discussion, or teaching of visual and performing arts and cultural endeavors, and objective B.3 which encourages
residents and visitors to practice, participate, attend and observe artistic and cultural activities;
WHEREAS, the Lessee operates the premises as a performing arts facility, including without limitation,
, theater and musical performances, rehearsal, discussions and teaching performing arts within 6,300 square feet
and an arts incubator fronting State Street within the remaining 3,100 square feet;
WHEREAS, the Parties desire to extend the term of the Agreement for an additional one (1) year period,
ending on June 30, 2017; and
WHEREAS, the Parties desire to modify the terms of the Agreement to: (1) include an additional rent
payment of $0.50 per ticket sold to assist in covering Lessor's costs to maintain, repair, or improve the Premises, if
any; and (2) include provisions regarding payment of prevailing wage for tenant improvements.
NOW, THEREFORE, in consideration of the covenants and conditions contained herein, the parties hereto
agree as follows:
TERM: The term of this First Amendment shall be for a period of one (1) year commencing on July 1, 2016,
and ending on June 30, 2017. Lessee shall be entitled to conduct business prior to commencement date.
Upon the expiration of this First Amendment, Lessee may request and Lessor may grant, at its sole
discretion and option, the renegotiation of lease terms. At Lessor's sole discretion, Lessee may extend the
initial Lease Term for one (1) additional one (1) year period, upon the same terms and conditions stated
herein. .Lessor will only consider a request for extension if Lessee has complied with all terms and
conditions of the Agreement and Lessee submits a written request for the extension at least ninety (90)
days prior to the expiration of this First Amendment.
1. Section 2. RENT is amended by adding the following language:
(d) Lessee agrees to pay Lessor Fifty Cents ($0.50) per ticket ("ticket surcharge") on all ticket sales starting
July 1, 2016. The ticket surcharge shall be applied to single tickets, which shall include general admission
tickets, senior/student/military discount tickets, tickets with discount codes, and group sales tickets.
Should Lessor grant an extension of the Agreement to commence on July 1, 2017, Lessee shall pay Lessor
Seventy-Five Cents ($0.75) per ticket on all ticket sales starting July 1, 2017. Ticket surcharge payments Item#3-AB#22,324 July 12, 2016 Page 5 of 8
shall be due to city quarterly, and payable by Lessee in arrears on or before the tenth (10th) day of receipt
of the completed financials for the quarter, but not later than forty-five (45) days from the month following
the quarter for which the ticket surcharge was collected. Ticket surcharge is not to be applied to
complimentary tickets or vouchers, "pay-what-you-can" tickets, or season passes.
2. Section 19. MAINTENANCE AND REPAIR is amended by adding the following language:
Lessee acknowledges and agrees that:
(a) any construction, alteration, demolition, installation or repair work performed under the Agreement
constitutes "public work" under California Prevailing Wage Law, including Labor Code sections 1720
through 1815, et seq. (the "PWL"), and will obligate Lessee to cause such work to be performed as a "public
work," including, but not limited to, the payment of applicable prevailing wages to the all persons or
entities subject to the PWL, subject to all applicable exceptions related to the use of volunteer labor
pursuant to California Labor Code section 1720.4 and all other applicable statutory and case law
exceptions;
(b) Lessee shall cause all persons and/or entities performing "public work" under the Agreement to comply
with all applicable provisions of the PWL, subject to all applicable exceptions related to the use of volunteer
labor pursuant to California Labor Code section 1720.4 and all other applicable statutory and case law
exceptions;
(c) Lessor is not responsible for Lessee's failure to comply with any applicable provisions of the PWL;
(d) Lessee's violations of the PWL shall constitute an event of default under the Agreement; and,
(e) Lessee shall defend and indemnify Lessor and its officers, employees, council members and agents from
and against any and all claims, assessments, back-wages, penalties, change orders, suits, liability,
judgments, damages, proceedings, orders, directives, costs, including reasonable attorneys' fees, arising
from or relating to any actual or alleged violations of the PWL, or other application of laws, ordinances or
regulations, by any person or entity, including but not limited to Lessee, performing construction,
alteration, demolition, installation, repair and/or any other type of work contemplated under Agreement.
3. All other terms, conditions, covenants and provisions of the Agreement shall remain in full force and
effect. In the event of any conflict between the terms of the Agreement and this First Amendment, the terms of
this First Amendment shall control.
4. The individuals executing this First Amendment each represent and warrant that they have the legal power,
right, and actual authority to bind Lessee to the terms and conditions of this First Amendment.
[Signatures on Page 3]
Item#3-AB#22,324 July 12, 2016 Page 6 of 8
"LESSOR"
CITY OF CARLSBAD
"LESSEE"
APPROVED AS TO FORM:
By:
City Attorney
By:
NEW VIL A GE ARTS
By: By:
Name:
• sii.06 (A.LVILLitiliee' Name: MAIK G664 VG
Title: itle: ka4A4+1 1 1 ..b Ae_
Date: Date: Xl t (0 Date: 0 I 1(0
NOTARY ACKNOWLEDGEMENT OF LESSEE'S SIGNATURE(S) MUST BE ATTACHED
Item#3-AB#22,324 July 12, 2016 Page 7 of 8
Signa otary Public
OPTIONAL
Signatur
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CML CODE § 1189
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of .Sc...
before me, LA41 S So 6-Irk R.31..
Date Here Insert Name and Title of the Officer
personally appeared
V--11'StiC4.4.v‘e- c"-•,) e-lc
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be theperson(s) whose name(s) is/are
subscribed to the within instrument and acknowlqdged to me that 04/they executed the same in
110Ft/their authorized capacity(ies), and that by Wiper/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
CURTIS StYLES JACKSON
Commission • 16116503
Notary Public • California
San Ohio County
,COmrnJ1CJS$O1C 1.201!
Place Notary Seal Above
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph
is true and correct.
WITNESS my hand nd official seal.
Though this section is optional, completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document: Document
Number of Pages: Signer(s) Other Than Named Above:
Capacity(les) Claimed by Signer(s)
Signer's Name:
LI Corporate Officer — Title(s):
LI Partner — LI Limited 0 General 0 Partner — LI Limited El General
0 Individual 0 Attorney inj_act 0 individual 0 Attorney in Fact
0 Trustee 0 Gua • "an—or Conservator 0 Trustee El Guardian or Conservator
0 Other: 0 Other:
Signer Is senting: Signer Is Representing:
02014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907
ner's Name:
El Corporate Officer — Title(s):
Item#3-AB#22,324 July 12, 2016 Page 8 of 8