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HomeMy WebLinkAboutIR 7808 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7808 A. To the Mayor and Members of the City Council March 22, 1994 0 -4 4 X Subject: PROPOSED LEASE AGREEMENT WITH THE FORT WORTH ART ASSOCIATION FOR USE OF THE FORT WORTH ART CENTER BACKGROUND: The Fort Worth Art Center, composed of the Modern Art Museum and the Scott Theatre, is owned by the City of Fort Worth, but was built with a combination of public and private money. Funding for the Museum Building, which opened in 1954, came from private donations and $500,000 in bonds issued by the City. In 1972, the City Council approved a privately funded $1.4 million expansion of the Museum Building which doubled the interior exhibition space. The Scott Theatre, completed in the mid-1960's, was built entirely with private funds donated to the City by the Scott Foundation. PRIOR LEASE PROVISIONS: Since its creation, the entire Art Center has been leased by the City to the Fort Worth Art Association. Under the most recent lease agreement, the Association paid no annual rent, and in return, agreed to operate and maintain the Art Center at its expense. However, the lease allowed the Association to petition the City Council to pay for expenses related to major equipment failure. In recent years, the City has paid in excess of $50,000 in major equipment related repairs at the Art Center. PROPOSED LEASE AGREEMENT: For some time, staff has been holding discussions with representatives of the Art Association concerning a new lease agreement. In negotiating a new lease, staff took the position that no additional City funds, beyond annual Bed Tax appropriations, should be used to support the ongoing operation and maintenance of the Art Center, including compliance with asbestos regulations and the American's with Disabilities Act (ADA). In return for the Art Association's commitment to operate and maintain the facility at its sole expense, staff was willing to recommend that the City continue to lease the facility at no cost to the Association. Both parties have finally agreed on the terms of a proposed 20 year lease agreement which adequately limits the City's financial responsibility for the Art Center while also providing the Art Association with the long term assurances needed to continue its essential presence in the Cultural District and plan for possible future enhancements to the facility. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7808 ,,,-P T I A,, 50 To the Mayor and Members of the City Council March 22, 1994 F C)i Page 2 of 3 0 xrsXAy. Subject: PROPOSED LEASE AGREEMENT WITH THE FORT WORTH ART ASSOCIATION FOR USE OF THE FORT WORTH ART CENTER Summarized below are the major provisions of the proposed lease agreement: USE: Lessee will use the facility "solely for the benefit of the general public". Lessee will provide the art work for the museum and will provide management services for the Scott Theatre. PARKING: Lessee has non-exclusive right to use the WRMC parking lot, except during the Stock Show. City retains the right to charge a parking fee. If a paid parking program is implemented, the Modern Art Museum must be treated the same as the other Cultural District museums. MAINTENANCE: Lessee is responsible for the cost of all required maintenance and upkeep. ADACOMPLIANCE: Lessee is responsible for bringing the building into compliance 0101* with all applicable ADA requirements. ASBESTOS: Lessee is responsible for properly maintaining all asbestos containing materials in the facility and is responsible for the cost of any asbestos remediation as required by law during the term of the lease. INSURANCE: Lessee maintains liability insurance and insures the contents of the Center. City maintains fire and extended coverage on the building and boiler and machinery coverage on the mechanical systems. CASUALTY EVENT: Substantial casualty is defined as any event, act, or condition, not due to Lessee's negligence,which results in required repair costs in excess of the sum of $100,000 plus any insurance proceeds available to the City or Lessee. If a substantial casualty occurs, Lessee has the right to terminate the lease. If the Lessee does not terminate the lease, the City has the option to repair the building or cancel the lease. In deciding whether or not to make repairs, the City may consider the Lessee's willingness to fund at least $100,000 in uninsured costs. Should the City choose to make repairs, it is under no obligation to expend any amount in excess of any insurance proceeds actually received. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7" �FP 7f q,o „,, �kfoRr To the Mayor and Members of the City Council March 22, 1994 � � Page 3 of 3 'fX, Subject: PROPOSED LEASE AGREEMENT WITH THE FORT WORTH ART ASSOCIATION FOR USE OF THE FORT WORTH ART CENTER A minor casualty is defined the same as a substantial casualty except that the cost of needed repairs is $100,000 or less. Minor casualty repairs will be paid for through insurance proceeds and/or Lessee expenditures. BED TAX FUNDING: While Section 9.3 of the lease acknowledges the City's use of Bed Tax revenues to support the Art Center, it does not obligate the City in any way with regards to Bed Tax funding. All Bed Tax funding decisions will be made by the City Council during the annual budget process. TERMINATION: Both parties can terminate the agreement for any reason with 12 months written notice. City can terminate the lease on 30 days notice if lessee fails to cure a default situation. — ADJOINING LAND: Section 15 of the lease acknowledges the City's intent to reserve the land between the Modern Art and Science and History museums for possible future expansion of either museum. However, it is expressly stated that nothing in the section shall "limit, restrict, or obligate the City in any manner". City staff and representatives of the Art Association will be present at the March 22, 1994 Pre-Council meeting to discuss the proposed lease agreement. If there are no objections from the City Council at that time, staff will prepare an M&C for City Council approval the following week. If there are any questions, please contact Kirk Bednar, Fiscal Services Coordinator, Department of Environmental Management, at 871-6102. Bob Terrell City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS