STAFF REPORT
City of Lancaster
CC 5
6/11/2024
JC
Date: June 11, 2024
To: Mayor Parris and City Council Members
From: Larissa De La Cruz, Director – Community Development Chenin Dow, Assistant Director – Community Development
Subject: Acquisition of Museum of Art & History Building Recommendation:
1. Authorize the City Manager or his designee to finalize and execute an exercise of option instrument between the City of Lancaster and North Downtown Renual, L.P. for the Museum of Art and History (MOAH) facility, located at 665 West Lancaster BLVD and known as APN 3134-009-031, in a form approved by the City Attorney.
2. Authorize the City Manager or his designee to finalize and execute all associated documents to effectuate the transfer of the MOAH property from North Downtown Renual, L.P. to the City, in a form approved by the City Attorney.
Fiscal Impact:
$1.00 cost to exercise the City’s option to purchase the facility, with savings estimated at $80,000.00 annually in property taxes paid under the current ownership structure.
Background:
MOAH has been an integral cultural institution within our city for the past decade. Located within the historic downtown area, the museum serves as a beacon of creativity, education, and community engagement. As MOAH celebrates its 10-year anniversary, this is an opportune moment to solidify the institution’s presence within the City by securing the building it currently occupies.
The construction of MOAH’s current facility was a key component of The BLVD Transformation project. The City has long partnered with development firm North Downtown Renual, L.P. (NDR) to redevelop and sustain the growth and vitality of downtown Lancaster. This partnership has yielded a wide range of new assets and amenities for The BLVD district, including more than 270,000 square feet of commercial space; 877 new housing units; a hotel; and the construction of the current MOAH facility, which allowed it to relocate from its former home on Beech Avenue and Milling Street.
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NDR and the City leveraged a variety of innovative financing structures to build these amenities. In the case of MOAH, NDR constructed the new facility. The City entered into a 100-year lease with NDR for $1.00 per year, paying lump-sum rent of $1.5 million at the outset of the lease. Under the lease agreement, the City bears responsibility for all ongoing costs for the facility, including maintenance, operations and any taxes incurred. On or after August 15, 2024, the City can exercise its option to purchase the facility for $1.00.
This agreement has served both the community and the BLVD extremely well. It allowed for the addition of a key cultural asset to the BLVD in the early days following its revitalization, and has provided the community with easy access to a variety of world-class exhibitions. These benefits have come at an incredibly reasonable cost: just $1.5 million for a brand-new, state-of-the-art facility, and free admission for residents to access its many offerings.
Now, staff recommends that the City take advantage of the opportunity to exercise the option to purchase. While adding no new expenses (beyond the nominal fee of $1.00), owning the facility outright will allow the City to exempt the property from payment of future property taxes. Currently, as the ownership is private, property taxes must be paid by the City. These equate to approximately $80,000.00 per year.
Acquisition of the facility will reduce operational costs while also further guaranteeing continued access to this key Lancaster institution for decades to come.
CD/JT/sm
Attachment:
MOAH – Grant Deed