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to: |
Roger L. Stancil, Town Manager |
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from: |
Butch Kisiah, Director of Parks
and Recreation |
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subject: |
Work Session on Proposed Lease of the Wallace Parking Deck to Kidzu Children’s Museum |
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date: |
October 9, 2009 |
This work session has been scheduled to provide the Town Council an opportunity to review in more detail the proposed Lease of the roof of the Wallace Parking Deck to the Kidzu Children’s Museum and to discuss with Kidzu representatives key provisions in the proposed lease.
On September 8, 2008, the Town Council authorized the Town Manager to execute a non-binding letter of intent and good faith agreement stating the Town’s intent to enter into good faith negotiations to provide the upper level of the Wallace Parking Plaza to Kidzu Children’s Museum. The letter stated it was “intended to establish a basis for future definitive discussions and contract negotiations. . . .”
Following the signing of that letter, attorneys for Kidzu prepared a preliminary draft of an Air Rights Lease Agreement (the Agreement) detailing proposed terms and conditions for use of the roof of the parking deck structure.
Town staff and Kidzu representatives met a few times and developed the proposed Agreement which was introduced and received by the Town Council on September 28, 2009. As our memorandum of September 28 noted, the proposed Agreement identified a number of issues remaining unresolved between Town staff and Kidzu representatives.
On September 28, the Council agreed to schedule a work session to discuss the proposed Agreement and asked the Town staff to continue to work with Kidzu representatives on remaining issues and to identify issues where they did not have a shared version of language for the proposed Agreement.
Town Staff and Kidzu have continued to exchange drafts and have met again to discuss issues previously identified on September 28 as “open for further discussion”. The attached draft of the Agreement is the result of those discussions. Issues previously identified as “open for further discussion” have been discussed and language has now been drafted to address those issues. Thus, we believe the attached Agreement draft, being presented for the Council’s consideration and for its discussion with Kidzu represents, is one that reflects a version that both Town staff and Kidzu representatives are comfortable with bringing forward for your review.
Town staff acknowledge that there are a number of policy choices reflected within the language of this document for the Council to consider and which the Council may wish to discuss directly with Kidzu representatives.
While we do not propose to present the draft Agreement in detail paragraph by paragraph at the work session, we do believe it would be appropriate to review what we believe are the key elements of the lease arrangement for your consideration and possible discussion with Kidzu and to address any other provisions Council members have concerns about.
Depending on the progress made at the Friday morning work session, an additional work session may be needed before a proposed Agreement is considered at a session at which the public would be invited to comment.
Town Staff believe that the key elements for review with the Town Council include the following:
1. Kidzu would lease the west side of the Plaza roof and would build a children’s museum. (1.1) Kidzu anticipates building a structure of several thousand square feet, based on financing available and construction costs, and considering building additions, within the area leased for such purposes, at some time in the future.
2. Kidzu would lease the north east quadrant of the Plaza roof for an outdoor display area (1.1).
3. The north east quadrant would be structured and gated to allow access and use by the Town for special events in conjunction with Town programs in the south east quadrant. (1.2)4. Town would maintain the south east quadrant and would commit to not develop any habitable buildings in excess of 5% of the area of the south east quadrant. (1.3(a))
5. Kidzu would have use of the south east quadrant, subject to the public’s use as well, during museum hours. (1.3(b))
6. Lease is for 99 years.(2.1); $1.00 per year (3.1)
7. Property may be used for not-for-profit children’s museum. Accessory uses permitted include a snack bar and gift shop (up to 25%) and workshop area (up to 20%). (5.1)
8. Kidzu would use commercially reasonable efforts to design and construct building consistent with requirements for LEED certification. (5.2(g))
9. The Town would have 30 days to approve, as Landlord, plans for the museum building. (5.3(a))
10. Subject to Town approval, the entire plaza level could be used as a construction staging area.(5.4)
11. The Town would be obligated to continue annual inspection and maintenance of the parking deck. (6.1)
12. The Town would be committing to long term major repairs to deck, if needed, subject to a limit based on the age and estimated cost of such repair. A process is established for determining if such repairs are needed and if the cost of such repairs exceeds the amount which the Town would be obligated to invest to repair the deck. (6.3)
13. The Town would have some opportunity to use the indoor portion of the museum after hours for receptions and similar events. (20.15)
Following this morning’s work session, we believe the next steps would include:
1. Scheduling a follow up work session, if needed.
2. Offering an opportunity for the public to comment on the proposed lease, possibly on October 28.
3. Taking action on the proposed lease, possibly on November 9.
We recommend that the Town Council review the draft Agreement in detail with Kidzu representatives and Town staff this morning and discuss any revisions it would like to see in the draft Agreement and the steps to consider the proposed lease further.
1. Revised Draft Air Rights Lease Agreement (begin new page 1).