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HomeMy WebLinkAbout10/4/2006 - STAFF REPORTS - 5.C.DATE: OCTOBER 4, 2006 Citv Council/Community Redevelopment Aaencv Staff Report JOINT MEETING SUBJECT: APPROVAL OF AMENDMENT NO. 3 TO A LEASE AGREEMENT WITH THE PALM CANYON THEATER FOR THE PURPOSE OF INCORPORATING AND COORDINATING TENANT IMPROVEMENTS WITH THE PALM SPRINGS INTERNATIONAL FILM FESTIVAL INTO THE FACILITY, MAKING A TENANT IMPROVEMENT ALLOWANCE IN THE AMOUNT OF $200,000, FOR A CITY -OWNED PROPERTY LOCATED AT 538 NORTH PALM CANYON DRIVE, IN FRANCES STEVENS PARK FROM: David H. Ready, City Manager BY: Community & Economic Development Department SUMMARY: The Palm Springs International Film Festival (PSIFF) has an interest in creating additional venues throughout the city for their film events. In July, 2006, the PSIFF approached the Palm Canyon Theater (PCT) about using their facilities for events during the Film Festival and throughout the year. PCT has a lease on the City -owned theater located in Frances Stevens Park, and has run a successful theater there since 1997. The facility, which was a former gymnasium/auditorium when the building was operated as an elementary school, was built out in 1997 to accommodate live theater and not films. The PSIFF has proposed that, in return for the use of the facility during the film festival and throughout the year, they fund the retrofit of the tech booth and the other system upgrades to allow 35 mm film to be projected in a first quality environment. This grant to PCT would allow the additional aesthetic improvements to the facility that would bring the facility -- for both users — to a higher standard of quality for their patrons - ITEM NO. 5 ` a Palm Canyon Theater Lease Amendment October 4, 2006 Page 2 The source of funds would be City funds, but from the repayment of a $205,000 note made to the Community Redevelopment Agency for the sale of City -owned land, and not the General Fund reserves. The two budget resolutions accomplish the repayment of the loan by the Agency and the appropriation of funds by the City. CITY COUNCIL RECOMMENDATION: 1. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN AMENDMENT TO A LEASE AGREEMENT WITH PALM CANYON THEATER FOR THE PURPOSE OF INCORPORATING AND COORDINATING THE PALM SPRINGS INTERNATIONAL FILM FESTIVAL INTO THE FACILITY, MAKING A TENANT IMPROVEMENT CONTRIBUTION IN THE AMOUNT OF $200,000, FOR A CITY -OWNED PROPERTY LOCATED AT 538 NORTH PALM CANYON DRIVE, IN FRANCES STEVENS PARK, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY. 2. Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE FISCAL YEAR 2006-07. 3. Adopt Resolution No. , "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2006-07 FISCAL YEAR. STAFF ANALYSIS: The City leased a portion of the old elementary school in Frances Stevens Park to Palm Canyon Theater in 1997. At the time of the original lease, the theater did not exist in its current state: it was the gymnasium of the old elementary school. It was the investment of the lessee (the original investment was in excess of $300,000 and is several times that today) that created what is today a 231-seat theater with sound, lights, and a rotating stage. PCT's investment actually created the theater facility, not the City's. The original purpose of the lease, from the City's perspective, was to install a professional theater company in the building that could anchor the park and begin to create the Frances Stevens Arts Academy to match the festival center concept within the rest of the park. The regular cultural activities of the theater were seen as a way of moving the "arts & entertainment" concept that was beginning to take hold in the downtown area into the then -struggling Uptown area. That effort today can be seen as largely successful, notwithstanding the difficulties faced by the PCT over that term. The surrounding vacant land uses - Heavenstone, the Palm Canyon Theater Lease Amendment October 4. 2006 Page 3 Colony Palms, the Peppertree Inn, the Rae[ Project, and the Palm Springs Hotel (now the Corridor) - have been renovated or are in various states of redevelopment. The uses at the north end of downtown, too, are also stronger than they were in 1997. Now the Palm Springs International Film Festival (PSIFF) has an interest in creating additional venues throughout the city for their film events. In July, 2006, the PSIFF approached the Palm Canyon Theater (PCT) about using their facilities for events during the Film Festival and throughout the year. The facility was built out in 1997 to accommodate live theater and not films. The PSIFF has proposed that, in return for the use of the facility during the film festival and throughout the year, they fund the retrofit of the tech booth and the other system upgrades to allow 35 mm film to be projected in a first quality environment in the amount of approximately $200,000- This Lease Amendment making a tenant improvement contribution to PCT would allow the additional aesthetic improvements to the facility that would bring the facility - for both users -- to a higher standard of quality for their patrons. The source of funds would be City funds, but from the repayment of a $205,000 note made to the Community Redevelopment Agency for the sale of City -owned land (the Vista Sunrise project), and not the General Fund reserves. FISCAL IMPACT: The source of funds would be City funds, but from the repayment of a $205,000 note made to the Community Redevelopment Agency in 2003 for the sale of City -owned land, and not the General Fundpserves. Joh�VS. Ray nd, Director of Tom Wilson C'o nmunity & Economic Development Assistant City onager David H. Ready, Esq. City Manager Attachments: 1. Resolution 2. City Budget Resolution 3, Agency Budget Resolution Palm Canyon Theater Lease Amendment October4,2006 Page 4 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN AMENDMENT TO A LEASE AGREEMENT THE PALM CANYON THEATER FOR THE PURPOSE OF INCORPORATING AND COORDINATING THE PALM SPRINGS INTERNATIONAL FILM FESTIVAL INTO THE FACILITY, MAKING A TENANT IMPROVEMENT CONTRIBUTION IN THE AMOUNT OF $200,000, FOR A CITY -OWNED PROPERTY LOCATED AT 538 NORTH PALM CANYON DRIVE, IN FRANCES STEVENS PARK, IN A FORM ACCEPTABLE TO THE CITY ATTORNEY WHEREAS, on July 9, 1997, Palm Canyon Theater ("Tenant") entered into a Lease Agreement ("Lease") with the City of Palm Springs for certain real property described as the Palm Canyon Theatre ("Premises"): and WHEREAS, on October 1, 1997, City and Tenant entered into that certain Amendment to Lease, increasing Tenant's exclusive use of floor area at the Premises, increasing the monthly rental and prepaid rent amount, and allowing certain Tenant electrical improvements and repairs on the Premises; and WHEREAS, On June 17, 1998, City and Tenant entered into that certain Amendment and Addendum to adjust the rent to reflect the cost of public improvements made by Tenant, to clarify the responsibility for certain public improvements, and to change the accounting requirements of the Lease; and WHEREAS, in June, 2002, Tenant and City entered a five year extension extended the Lease for an additional five years, reflecting the success of the theater effort and the considerable private investment made by Tenant into the City's facility; and WHEREAS, Tenant now desires to coordinate the use of the facility with the Palm Springs International Film Festival ("PSIFF"), which will make a significant investment in making the facility capable of showing film in a first class environment; and WHEREAS, City desires to assist both organizations in upgrading this City - owned facility, as both organizations make a contribution to the ongoing "arts and entertainment" strategy so important to the downtown area. Palm Canyon Theater Lease Amendment October 4, 2006 Cage 5 THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The Amendment to a Lease Agreement with Palm Canyon Theater for the purpose of incorporating and coordinating the Palm Springs International Film Festival into the facility, making a tenant improvement contribution in the amount of $200,000, for a City -owned property located at 538 North Palm Canyon Drive, in Frances Stevens Park, is hereby approved. SECTION 2. The City Manager or his designee is hereby authorized to execute all documents related to the grant. SECTION 3. The source of funds shall be City funds from the repayment of a note from the Community Redevelopment Agency related to the sale of a City - owned parcel. ADOPTED THIS 4th day of October, 2006. ATTEST: James Thompson, City Clerk David H. Ready, City Manager CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on by the following vote: AYES: NOES: ABSENT: ABSTAIN: RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2006-07 FISCAL YEAR. WHEREAS Resolution 21611 approving the budget forthe fiscal year 2006-07 was adopted on June 7,2006; and WHEREAS the City Manager has recommended, and the City Council desires to approve, certain amendments to said budget; NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter -fund cash transfers as required in accordance with this Resolution, and that Resolution 21611, adopting the budget for the 2006-07 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity I Account 001 1400 Purpose Palm Canyon Theatre Grant SECTION 2. SOURCE Fund I Activity 001 ADOPTED THIS day of ATTEST: James Thompson, City Clerk Account 29301 2006. Amount $205,000 Amount $205,000 David H. Ready, City Manager tyA091aWEI1156]0 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE) ss. CITY OF PALM SPRINGS) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on , by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California u RESOLUTION NO, OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2006-07 FISCAL YEAR. WHEREAS Resolution 1301 approving the budget for the fiscal year 2006-07 was adopted on June 7, 2006; and WHEREAS the Executive Director has recommended, and the Agency desires to approve, certain amendments to said budget; NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter -fund cash transfers as required in accordance with this Resolution, and that Resolution 1301, adopting the budget for the 2006-07 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS Fund Activity Account Amount 851 8201 49625 $205,000 Purpose: Payment of City Note for property at 538 No. Palm Canyon Drive SECTION 2. SOURCE Fund Activity Account Amount 851 29301 $205,000 ADOPTED THIS day of 2006. ATTEST: James Thompson, City Clerk David H. Ready, City Manager CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE) ss. CITY OF PALM SPRINGS) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on , by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California