AGENDA #8
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Response to Petition from Chapel Hill Museum to Renew Lease
DATE: March 6, 2006
PURPOSE
The purpose of this report is to respond to a petition from the Chapel Hill Museum to extend its lease of the property known as the Old Library, located at the corner of East Franklin and Boundary Streets.
We present basic options for the Council’s consideration and request guidance from the Council.
BACKGROUND
Mr. Larry T. Loeser, President of the Chapel Hill Museum Board of Directors, presented a petition (Attachment 1) to the Council on January 9, 2006, requesting a new 10-year lease of the property known as the Old Library on the same terms as the present lease, which expires on September 3, 2006. The present lease allows the use of the approximately 12,800 square feet building, adjoining grounds and associated parking at no cost other than reimbursement for certain capital repairs. The Chapel Hill Historical Society is allowed by the Museum to use a portion of the space. Please see the attached lease with amendments to date (Attachment 2).
In the Museum’s petition, Mr. Loeser explains that the imminent expiration of the lease is affecting the Museum’s ability to plan for future operations.
We also attach as background information a Budget Working Paper presented to the Council on April 27, 2005, which provides contextual information about the Old Library and two other Town properties now leased to others: the Old Post Office and the Old Town Hall. Please see Attachment 3.
DISCUSSION
We believe that there are two basic options for the Council’s consideration: extend the lease or terminate the lease.
Extend Lease: The Chapel Hill Museum provides services that the Council has in past years considered valuable enough to justify “rent free” occupancy of the property formerly occupied by the Chapel Hill Public Library. The Museum summarizes its services in materials presented with its petition. The primary advantage of renewing the lease would be the continuation of such services; and the primary disadvantage would be inability to use the building for other purposes.
If the Council determines that the services provided by the Museum continue to be valuable enough to the community to justify extending the lease, we believe a five-year term would be sufficient. The lease could provide for a review at the end of the third year and a decision either to offer a new five-year lease or to give notice of termination at the end of the original term. Such provisions would give the Museum reasonable stability and opportunity to plan with some security without unduly encumbering the property. We would recommend that the provision for early termination upon 180 days notice be retained in case the Town’s needs changed in an unforeseen manner.
Terminate Lease: If the Council determines that the property is needed for other community purposes and believes that termination of the lease is in the best interests of the Town, we believe that the exact termination date should be negotiated with the Museum. The petition states that the Museum, of necessity, has already planned its 2006 exhibition schedule. The primary advantage of terminating the lease would be that the property would become available for other uses; and the primary disadvantage is, we believe, that the Museum likely would not be able to continue operations.
Use for Other Purposes: When the Council originally discussed potential uses for the Old Library, we recommended that consideration be given to using the building as office space for the Parks and Recreation Department, with some space reserved for community meeting rooms. We still believe that this would be a reasonable use of the space. We recognize, also, that many community non-profit organizations would be interested in occupying the space. Please see Attachment 4 for a description of need and potential use by the Parks and Recreation Department.
CONCLUSION
We believe that it would be reasonable for the Council to select either option. This matter is a policy decision for the Council. We recognize that the details of either option could be adjusted in many ways and will be pleased to have direction from the Council.
RECOMMENDATION
We recommend that the Council consider the issues and provide guidance as to whether it wishes the Manager to prepare a lease for its consideration, with such terms as the Council desires, or to negotiate a termination agreement for its consideration.
ATTACHMENTS