Lincoln City Council
October 13, 2026

RESOLUTION NO. 2026-163

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LINCOLN APPROVING A LEASE AGREEMENT WITH LINCOLN CLAY ARTS CENTER, INC. FOR THE FORMER CARNEGIE LIBRARY AT 590 FIFTH STREET AND AUTHORIZING EXECUTION OF

THE LEASE
WHEREAS, the City of Lincoln (“City”) owns the real property located at 590 Fifth Street, Lincoln, California, Assessor’s Parcel Number 008-171-010, consisting of approximately 7,929 square feet of land and the former Lincoln Carnegie Library, a two-story National Register historic structure of approximately 2,600 square feet (“Building”); WHEREAS, Lincoln Clay Arts Center, Inc. (“LCAC”) is a California nonprofit public benefit corporation formed to enrich the community through preservation and adaptive reuse of the historic Carnegie Library and through clay arts programs and services that foster creativity, learning, and community engagement;
WHEREAS, the City Council previously authorized a short-term lease on April 29, 2026, to facilitate construction and installation of improvements needed to accommodate clay arts, workshops, seminars, meetings, educational activities, and community events at the Building;
WHEREAS, the proposed Lease Agreement between the City and LCAC would provide for use of the Building at 590 Fifth Street, together with specified nonexclusive pedestrian access rights, while the City retains possession and control of the surrounding land and grounds;
WHEREAS, the proposed lease would authorize LCAC to operate art classes, lectures, workshops, artist studios, gallery and exhibit space, a gift shop, seminars, meetings, community programs, educational activities, special events, and other lawful activities consistent with LCAC’s nonprofit mission, including low-cost and no-cost programs benefiting the local community;
WHEREAS, the proposed lease provides for an initial term of twenty years beginning one business day after issuance of a temporary or permanent certificate of occupancy, or other applicable governmental approval for legal use and occupancy, with two additional five-year extension options, subject to the lease terms; WHEREAS, the proposed lease establishes base rent of one dollar per year in recognition of the public-purpose nature of the lease and the community benefits to be provided by LCAC;
WHEREAS, the proposed lease includes performance standards requiring LCAC, beginning after the first year of operation, to use commercially reasonable efforts to maintain an average of at least three occupied artist studios and offer at least three workshops per calendar month, with a notice, cure, and month-to-month conversion remedy if the standards are not satisfied;
337
Resolution No. 2026-163

WHEREAS, the proposed lease preserves City ownership of the Building, City-funded improvements, and City-owned equipment; assigns responsibility for major building systems, structural components, major utility infrastructure, exterior grounds, and landscaping to the City; and assigns responsibility for LCAC’s programs, equipment, furnishings, internet, telephone, security-system monitoring, recycling, and hazardousmaterial disposal to LCAC; WHEREAS, under the proposed lease, the City will pay for electricity and natural gas during the initial three years following the Commencement Date; beginning with the fourth Lease Year, LCAC may be required to reimburse the City for electricity and natural gas if the lease’s annual financial-capacity test is met; and beginning with the tenth anniversary of the Commencement Date, LCAC will assume responsibility for electricity and natural gas regardless of the financial test;
WHEREAS, the City Council finds that leasing the Building to LCAC will advance public purposes by preserving and activating a historic City asset; increasing access to arts, cultural, educational, and community programming; supporting local artists; encouraging downtown activity; and leveraging nonprofit fundraising, volunteer, and programmatic capacity for the benefit of Lincoln residents; and
WHEREAS, the City Council has reviewed the proposed Lease Agreement and finds that approval is in the public interest.

NOW, THEREFORE BE IT RESOLVED:

Section 1. Findings
The foregoing recitals are true and correct and are incorporated into this Resolution by this reference.

Section 2. Approval of Lease
The City Council approves the Lease Agreement between the City of Lincoln and Lincoln Clay Arts Center, Inc., substantially in the form presented to the City Council and attached as Exhibit A.

Section 3. Authorization to Execute
The City Manager, or designee, is authorized to execute the Lease Agreement on behalf of the City, following approval as to form by the City Attorney.

The City Manager, or designee, is further authorized to approve and execute nonsubstantive revisions, clarifications, corrections, exhibits, legal descriptions, site plans, and related documents necessary to effectuate the purpose and intent of this Resolution, provided that such changes do not materially increase the City’s financial obligations or materially alter the business terms approved by the City Council.

Section 4. Lease Administration
The City Manager, or designee, is authorized to administer the Lease Agreement on behalf of the City, including implementation of the City’s inspection, compliance-review, utility-reimbursement review, notice, and enforcement rights under the Lease. 338
Resolution No. 2026-163

Section 5. Conditions Precedent to Occupancy
The Lease shall commence in accordance with its terms only after the Building has received a temporary or permanent certificate of occupancy, or other applicable governmental approval for legal occupancy and use.

Section 6. Public Art Park
Nothing in this Resolution or the approved Lease authorizes construction, operation, or use of a public art park on the surrounding City-owned land. Any future public art park proposal shall require separate City approval, appropriate funding, design and permitting, and a separate written agreement establishing the respective responsibilities of the City and LCAC.

Section 7. Environmental Review
The City Council finds that approval of the Lease Agreement is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15301, as the action involves leasing and operation of an existing public facility involving negligible or no expansion of use. The City Manager, or designee, is authorized to file a Notice of Exemption, if determined appropriate.

Section 8. Effective Date
This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED by the City Council on October 13, 2026 by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

Richard Pearl, Mayor
ATTEST:

Hope Ithurburn, City Clerk
339
Resolution No. 202
6-163

340
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

LEASE AGREEMENT
by and between

CITY OF LINCOLN, CA
as Lessor and
LINCOLN CLAY ARTS CENTER, INC.
as Lessee
For Premises Located At
590 Fifth Street, Lincoln, California 95648
Dated as of ____________, 2027
341
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

DRAFT FOR NEGOTIATION — NOT FOR EXECUTION
REDLINE CONVENTION: Deleted text is shown in strikethrough; new text is underlined. This draft is for negotiation and legal review and is not intended for execution.

TABLE OF CONTENTS
LEASE AGREEMENT 1
LINCOLN CLAY ARTS CENTER, INC. 1
as Lessee 1
TABLE OF CONTENTS 1
342
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

Update the Table of Contents prior to final execution.

LEASE AGREEMENT
THIS LEASE AGREEMENT (the “Lease”) is made and entered into this ____ day of ____________, 2027.

BY AND BETWEEN CITY OF LINCOLN, a body
politic and corporate
(the “Lessor” or “City”),

AND LINCOLN CLAY ARTS CENTER,
a California nonprofit public benefit
corporation
(the “Lessee”)
RECITALS:

WHEREAS, this Lease is by and between the Lessor and Lessee and is not intended, and will not be construed, to create the relationship of agent, servant, employee, partnership, joint venture, or association, as between Lessor and Lessee;
WHEREAS, Lessor is the fee owner of certain real property located at 590 Fifth Street, Lincoln, California 95648, (APN 008-171-010) containing approximately 7,929 square feet of land (the “Land”), upon which is located the former Lincoln Carnegie Library, a two-story National Register structure of approximately 2,600 square feet (the “Building”); the Building, together with the rights of access expressly granted under this Lease, is referred to as the “Premises.” WHEREAS, Lesse is a California nonprofit public benefit corporation with a mission to enrich the community through preservation and adaptive reuse of Lincoln’s historic Carnegie Library and programs and services focused on the clay arts that foster creativity, learning, and community engagement.

WHEREAS, the City has determined, based on applicable law and written findings of the City Attorney, that this transaction is authorized under the California Surplus Land Act and that any applicable exemption, exception, or other statutory requirement has been satisfied or is not applicable.

WHEREAS, on April 29, 2026, the Lincoln City Council authorized a short-term Lease for the construction and installation of improvements to the Building to accommodate programs for clay arts, workshops, seminars, meetings, educational activities, and community events consistent with Lessee’s Mission.

WHEREAS, Lessee has provided Lessor a business plan describing its operating model, projected revenues and expenses, startup funding requirements, community benefits, and long-term sustainability strategy. 343
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

NOW, THEREFORE, in consideration of the terms and conditions hereinafter contained, and the foregoing recitals, each of which is deemed a contracted part hereof, Lessor and Lessee agree as follows:
1) LEASE SUMMARY
a) “Lessor”: City of Lincoln, California, a California general law and municipal corporation
b) Lessor’s Address for Notice: City Manager or Authorized Designee, City Hall, 600 Sixth Street, Lincoln CA 95648
c) “Lessee”: Lincoln Clay Arts Center,California nonprofit public benefit corporation
d) Lessee’s Address for Notice: 590 Fifth Street, Lincoln CA 95648 e) Premises: The Building located at 590 Fifth Street, Lincoln, CA 95648, together with the nonexclusive access rights described in this Lease. The land and grounds surrounding the Building are not leased to Lessee. f) Permitted Uses: Subject to all applicable laws and this Lease, Lessee shall use and occupy the Premises for art classes, lectures, workshops, artist studios, gallery and exhibit space, a gift shop, seminars, meetings, community programs, educational activities, special events, and other lawful activities consistent with Lessee’s Mission, including no-cost and/or low-cost programs that directly benefit the local community (collectively, the “Community Benefits”). g) Term: Twenty (20) years from Commencement Date.
h) “Commencement Date”: One (1) business day following the date upon which a certificate of occupancy (whether temporary or permanent) or other applicable governmental approval for legal use and occupancy of the Premises is issued.
i) Extension Options: Two (2) additional five-year (5-year) extension options, exercisable by Lessee as provided below.
j) Base Rent: $1.00 per year.
k) Security Deposit: N/A
2) PREMISES
a) Lessor hereby leases the Premises to Lessee, and Lessee leases the Premises from Lessor, during the Term and on the terms and conditions of this Lease. The Land, except for the access rights expressly granted herein, remains under the possession and control of Lessor. b) Lessee acknowledges its personal inspection of the Premises. 344
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

Except as expressly provided in this Lease, Lessor makes no representations concerning the condition of the Premises; provided, however, that Lessor shall perform building maintenance and other obligations expressly assigned to Lessor by this Lease and any separately approved improvement agreement. Lessee does not accept responsibility for latent structural or building-system conditions that are the responsibility of the Lessor under this Lease. c) Lessor retains possession and control of the Land surrounding the Building. Lessor grants Lessee, its employees, contractors, instructors, students, members, guests, invitees, vendors, delivery personnel, and emergency responders a nonexclusive, fee-free right of pedestrian access across the Land as reasonably necessary to access the Building and conduct the Permitted Use.

Additionally, Lessor also grants the Lessee permission to erect signage on the Land pertaining to the Permitted uses, subject to municipal signage regulations and policies and the prior review and consent of the Lessor, the consent of which shall not be unreasonably withheld. The parties acknowledge that there is no onsite parking area, designated loading area, or designated trash receptacle area included in the Premises. This Lease does not grant Lessee an exclusive parking or loading right. Lessor shall not unreasonably interfere with Lessee’s access to the Building.
d) Lessor shall remain responsible for ordinary maintenance of the Building, exterior grounds, landscaping, irrigation, site drainage, and other City-controlled site improvements serving the Building since the Land is not included in the Premises, except as otherwise provided in a future written agreement concerning a possible Public Art Park.
3) LEASE TERM AND COMMENCEMENT DATE
a) Term: The “Term” of the Lease is twenty (20) years from the Commencement Date, together with any exercised Extension Options. Within thirty (30) days after the Commencement Date, the parties shall confirm in writing the exact Commencement Date and expiration date.
b) Operational Performance Standard and Special Remedy: Beginning on the first anniversary of the Commencement Date and continuing thereafter, Lessee shall use commercially reasonable efforts to maintain, measured over each preceding twelve (12)-month period, an average of at least three (3) occupied artist studios and to offer at least three (3) workshops per calendar month. For purposes of this provision, an artist studio shall be considered occupied if it is subject to a current written studio agreement with an individual artist. A workshop shall be considered offered if it is scheduled and made available to the public or to members, whether or not fully enrolled. A temporary vacancy resulting from ordinary artist turnover, or a temporary interruption caused by construction, casualty, force majeure, staffing transition, safety concerns, public-health requirements, or other circumstances beyond Lessee’s reasonable control, shall be considered in determining whether a failure to meet the 345
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

standard constitutes a default. If Lessee fails to meet the performance standard for the applicable twelve (12)-month period, Lessor may give written notice describing the deficiency, and Lessee shall have ninety (90) days after receipt of such notice to commence and diligently pursue a cure. If the deficiency is not cured within a reasonable period after the expiration of the ninety (90)-day cure period, notwithstanding Lessee’s diligent efforts, Lessor may elect to convert the Lease to a month-to-month tenancy by written notice. Following such conversion, either party may terminate the month-to-month tenancy upon ninety (90) days’ prior written notice to the other party. This special remedy shall be the exclusive remedy for failure to satisfy the performance standard and shall not limit any other termination rights expressly provided elsewhere in this Lease for casualty, condemnation, governmental action, material uncured default, or other circumstances expressly addressed by this Lease. c) Extension Option Periods: Provided Lessee is not in material uncured default under this Lease, Lessee shall have two (2) options to extend the Lease for additional five-year periods. Each option shall be exercised by written notice to Lessor not more than three hundred sixty-five (365) days before and not less than one hundred eighty (180) days before expiration of the thencurrent Term. During each extension period, all terms and conditions of this Lease shall continue to apply unless otherwise agreed in writing. 4) LEASE CONSIDERATIONS
a) In consideration of the nominal rent and public-purpose nature of this Lease, Lessee agrees as follows:
i) Lessee shall use the Premises for the Permitted Uses and Community Benefits described in this Lease and Exhibit B. The Permitted Uses are intended to provide reasonable operational flexibility. Lessee may add or modify programs and services consistent with Lessee’s Mission without prior City approval, except where a material change in the nature of the use requires governmental approval under applicable law. ii) Lessee shall be responsible for the costs expressly assigned to Lessee under this Lease, including operation of its programs, maintenance of its equipment and personal property, internet, telephone, security-system monitoring, recycling, and disposal of hazardous materials generated by Lessee’s operations.
b) Performance Obligation: Lessee shall perform all obligations required by this Lease, including those contained in the exhibits to this Lease. c) City-Funded Building Improvements: The parties acknowledge that Lessor is funding and/or performing the principal building improvements and installation of certain equipment necessary to establish the Lincoln Clay Arts Center, as separately approved by the City. Unless otherwise agreed in writing, such 346
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

improvements and City-funded equipment shall remain the property of Lessor.

Lessor shall be responsible for the maintenance, repair, and replacement of such City-owned building improvements and equipment to the extent assigned to Lessor under this Lease.
d) Lessor Oversight: Lessor may perform an annual inspection of the Premises upon reasonable advance notice, except in an emergency. Lessor may review Lessee’s accounts and records reasonably related to compliance with this Lease and any reimbursement provision, not more than once annually absent reasonable cause. Any review shall be conducted during normal business hours and shall protect confidential donor, student, personnel, and legally privileged information to the extent permitted by law.
e) Public Art Park: Lessee intends to pursue, as a future phase of its Mission, the development of a public art park on portions of the Land surrounding the Building. The Public Art Park is not included in the Premises leased under this Lease. Any Public Art Park development shall be subject to securing sufficient funding, completion of appropriate design and permitting, and approval by the City of Lincoln. If the City of Lincoln approves development of the Public Art Park, the parties shall enter into a separate written agreement addressing the scope, funding, construction, use, scheduling, maintenance, security, insurance, and other operational responsibilities for the Public Art Park. f) Donor Recognition and Naming Rights: Lessee may solicit and accept gifts intended to establish a permanent endowment or strengthen its endowment and may offer donor recognition or naming opportunities for appropriate rooms, spaces, programs, including the legal name of the Lessee or other elements of the Premises, subject to any approval required by law or City policy. Any naming or donor-recognition agreement shall not extend beyond the then-current Term of this Lease, including any exercised Extension Option, and shall automatically terminate upon expiration or earlier termination of this Lease unless otherwise agreed in writing by the parties. Nothing in this provision conveys ownership of the Building or any City property to a donor.
5) USES; APPLICABLE LAWS
a) Permitted Uses:Revenue and Utility Reimbursement: No portion of Lessee’s ordinary program, membership, rental, workshop, fundraising, grant, donor, or other revenue shall be payable to Lessor merely because it exceeds Lessee’s operating expenses. Lessee shall use and occupy the Premisesrevenues in furtherance of Lessee’s Mission, including reasonable operating reserves, capital reserves, fundraising and endowment objectives, and other lawful charitable purposes. During the first three (3) years following the Commencement Date, Lessor shall bear the cost of electricity and natural gas serving the Building and water as provided in Section 8. Beginning with the fourth Lease Year, Lessee’s obligation to reimburse Lessor for the Permitted Uses and Community Benefits describedelectricity and natural gas 347
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

shall be determined annually based on Lessee’s financial ability to pay such costs from core operations, as provided in Section 8. Beginning with the tenth (10th) anniversary of the Commencement Date, Lessee shall be responsible for electricity and natural gas regardless of the annual financial test. Nothing in this Lease and Exhibit B, and for other lawful purposes incidental or reasonably related to Lessee’s Mission. Lessee shall comply withprovision requires reimbursement merely because Lessee’s revenues exceed expenses; the applicable laws and generally applicable City rules and regulations. City rules adopted after the Commencement Date shall not materially interfere with the Permitted Use or materially increase Lessee’s obligations under this Lease without mutual written agreement, exceptfinancial test shall be determined as required by law.provided in Section 8. b) Permitted Program Agreements: Lessee may, without prior City approval, enter into ordinary-course agreements, licenses, memberships, rentals, or other arrangements for: (a) artist studio space; (b) memberships and open-studio access; (c) classes, workshops, lectures and educational programs; (d) gallery and exhibition participation; (e) facility rentals for private or public events; (f) instructor and artist agreements; (g) nonprofit or community-partner programming; and (h) similar activities consistent with Lessee’s Mission. Such arrangements shall not be deemed prohibited subleases or transfers of this Lease. c) Revenue and Utility Reimbursement: No portion of Lessee’s ordinary program, membership, rental, workshop, fundraising, grant, donor, or other revenue shall be payable to Lessor merely because it exceeds Lessee’s operating expenses. Lessee shall use revenues in furtherance of Lessee’s Mission, including reasonable operating reserves, capital reserves, fundraising and endowment objectives, and other lawful charitable purposes. Following the conclusion of the fourth Lease Year, and annually thereafter, the parties shall meet in good faith to review Lessee’s financial condition, annual operating results, reserve levels, fundraising needs, and actual utility costs, including the incremental electricity costs reasonably attributable to kiln operations. If Lessee determines that its financial condition reasonably permits, Lessee may offer to reimburse Lessor for a mutually agreed portion of extraordinary utility costs or other specifically identified City costs directly attributable to Lessee’s operations.

Any such reimbursement shall be established by a written agreement and shall not become due solely by reason of revenues exceeding expenses. Restricted grants, capital campaign contributions, donor-restricted gifts, endowment contributions, insurance proceeds, and proceeds from the sale of Lessee assets shall not be treated as distributable revenue for purposes of this provision. d) Compliance with Applicable Laws: The Premises, or any part thereof, shall not be used or permitted to be used for any activity that constitutes a nuisance. Lessee shall, at its sole cost and expense, conform to, and cause all persons using or occupying any part of the Premises that is under Lessee’s control to comply with all applicable laws and rules and regulations governing the Premises that may be in effect from time to time applicable to the use of the Premises. Lessee hereby warrants and covenants that the operation of the 348
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

Premises shall not interfere with any functions of Lessor outside of the Premises.

Furthermore, if any governmental license, certificate, approval, or permit, shall be required for the proper and lawful conduct of the Permitted Use in the Premises or any part thereof pursuant to any applicable law, Lessee, at its sole cost and expense, shall diligently and duly procure and thereafter maintain such licenses, certificates, approvals, permits during the Term hereof, and Lessee shall submit such licenses, certificates, approvals, permits (and all applications therefor) to Lessor for inspection promptly upon request. Lessor agrees to reasonably cooperate with Lessee, at no cost, expense or liability to Lessor, in connection with Lessee procuring all such licenses, certificates, approvals, permits. Lessee shall at all times during the Term hereof materially comply with the terms and conditions of each such license, certificate, approval, permit. In the event Lessee fails, for any or no reason whatsoever, to obtain any or all licenses, certificates, approvals, permits necessary for the operation of Lessee's operations at the Premises as required by this Lease, such failure shall not affect, reduce or diminish Lessee's obligations under this Lease. Lessee covenants and agrees to indemnify and hold Lessor and the Lessor Indemnitees (as hereinafter defined) harmless from any penalties, damages, or charges imposed for any violation of any and all applicable laws, licenses, certificates, approvals, permits, whether occasioned by neglect, omission, or willful act of Lessee or any person (other than Lessor, its officers, agents, employees, guests and invitees) by license, invitation, sublease, assignment or any other arrangement with Lessee. 6) RENT
a) Base Rent; Additional Rent.
i) Base Rent: Throughout the Term, Base Rent shall be $1.00 per year. ii) Additional Rent: Lessee shall pay only those taxes, charges, fees, reimbursements, and other costs that this Lease expressly assigns to Lessee. No other rent, operating expense reimbursement, or charge shall be due from Lessee unless expressly provided in this Lease or later agreed in writing by the parties.
b) Late Payments: In the event Lessee fails to make timely payment of any Additional Rent, as defined above, and Lessor makes said payment on Lessee's behalf, Lessee shall make timely reimbursement to Lessor upon written request. In the event reimbursement is not made within ten (10) calendar days of Lessor's request, the unpaid amount shall bear interest from the date due until the date paid in full, at ten percent (10%) per annum, and shall constitute a Material Default hereunder if not paid within ten (10) days after the due date. The interest charge provided in this Section 6(b) may be waived by the City Manager of the City of Lincoln or authorized designee, whenever the City 349
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

Manager finds such late payment excusable, in his/her sole discretion, by reason of extenuating circumstances. Lessor shall not be obligated at any time during the term herein provided to notify Lessee of the accumulation of penalty charges. c) No Single Net Lease; Allocation of Responsibilities: The parties acknowledge that this is a public-purpose lease of a City-owned National Register historic building to a nonprofit organization and is not intended to be a conventional single-net or absolute-net commercial lease. Each party shall bear the costs and perform the responsibilities expressly assigned to it under this Lease. If the Premises becomes unusable due to casualty, governmental action, or failure of a building system for which Lessor is responsible, the parties shall apply the repair, restoration, access, abatement, and termination provisions of this Lease.
7) TAXES AND ASSESSMENTS
a) Payment of Taxes: Lessee shall be responsible for any possessory interest taxes, personal property taxes, sales or use taxes, employment-related taxes, and other taxes imposed specifically upon Lessee, its operations, or its leasehold/possessory interest. Lessee shall not be responsible for taxes attributable solely to Lessor’s ownership of the Land or Building, except to the extent imposed directly upon Lessee by applicable law. The parties acknowledge that the possessory interest created by this Lease may be subject to property taxation, and Lessee shall pay any such tax imposed upon its possessory interest before delinquency. This paragraph is intended to address California Revenue and Taxation Code section 107.6.
b) Indemnity: Lessee shall indemnify Lessor for taxes and assessments for which Lessee is expressly responsible under this Lease, including penalties and interest caused by Lessee’s failure to timely pay such amounts. Lessee shall have the right to contest any such tax or assessment in good faith as provided by law.
c) Lessee’s Right to Contest Taxes: Lessee shall have the right, at its own expense, to contest the amount or validity of any Taxes by appropriate proceedings diligently conducted in good faith which shall operate to prevent the collection of any Taxes so contested or the sale of the Premises or any part thereof to satisfy the same. Pending final judgment and appeals of any such legal proceedings, Lessor shall not have the right to pay, remove, or discharge any Taxes thereby contested, provided that Lessee shall protect Lessor and the Premises from any lien by adequate surety bond or other security deemed appropriate by Lessor.
d) Proration of Taxes:Provision of Utilities: During the first three (3) years 350
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

following the Commencement Date, Lessor shall provide and pay for ordinary utility services serving the Building, including electricity and natural gas, and water as provided below.

Beginning with the fourth Lease Year, Lessee shall reimburse Lessor for electricity and natural gas only if, based on an annual review of Lessee’s financial condition and operating results, Lessee has sufficient unrestricted funds generated from core operations to reasonably pay those utility costs. For purposes of this determination, core operating funds shall be determined from Lessee’s unrestricted operating revenues less ordinary operating expenses, excluding capital expenditures, depreciation, restricted grants and other restricted funds, and extraordinary nonrecurring receipts or expenditures. The annual determination shall be based on the preceding twelve (12)-month period and actual utility costs for that period. If any taxthe financial test establishes that Lessee has the ability to pay, reimbursement shall be mandatory and shall be due within thirty (30) days after receipt of Lessor’s invoice. Failure to make a required reimbursement when due shall constitute a non-curable breach, subject to Lessor’s termination and other remedies expressly provided in this Lease. Beginning with the tenth (10th) anniversary of the Commencement Date, Lessee shall assume full responsibility for electricity and natural gas regardless of the annual financial test. Lessor shall remain responsible for maintaining and repairing the utility infrastructure serving the Building and for increased electrical service, utility-capacity upgrades, and utility upgrades required by future code changes, except to the extent caused by Lessee’s negligent or assessment for whichwillful conduct. Water shall remain the responsibility of Lessor because the existing water meter serves the Building landscaping, including Scout Hall Park, in addition to the Building, and Lessor is responsible for the landscaping. The parties shall address responsibility for water through a separate written agreement if and when the proposed Public Art Park is approved and developed. Lessee is responsible is attributableshall pay for internet, telephone, securitysystem monitoring, recycling, and disposal of hazardous materials generated by Lessee. If technically and operationally feasible, the parties may also cooperate in establishing Wi-Fi service to a period extending beyond the expiration or termination of the Lease, Lessee shall be responsible only for the portion attributable to the Lease Term.the Building through the City Hall tower. Lessor shall also remain responsible for ordinary sewer service serving the Building unless otherwise agreed in writing by the parties.
8) UTILITIES
a) Provision of Utilities: During the Term, Lessor shall provide and pay for ordinary utility services serving the Building, including electricity, natural gas, water, sewer, and other primary utility services customarily serving the Building.

Lessor shall be responsible for maintaining and repairing the utility infrastructure serving the Building. Lessee shall pay for internet, telephone, security-system monitoring, recycling, and disposal of hazardous materials generated by Lessee.

Lessor shall be responsible for increased electrical service, utility-capacity upgrades, and utility upgrades required by future code changes, except to the extent caused by Lessee’s negligent or willful conduct. b) Ownership: As between Lessor and Lessee, utility infrastructure serving the Building that is owned by Lessor shall remain Lessor’s property.

Utility facilities owned by a public utility or other third party shall remain the 351
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

property of that utility or third party.
9) OPERATING EXPENSES AND MAINTENANCE AND REPAIR
a) Lessor Responsibilities: Lessor shall be responsible for the maintenance, repair, and replacement of major building systems, structural and support elements, and infrastructure serving the Building, including the roof, foundation, exterior envelope, HVAC systems, main plumbing systems, main electrical service, sewer and water infrastructure, and other major building systems. Lessor shall also maintain the exterior grounds and landscaping on the Land, except as otherwise provided in a future Public Art Park agreement. Lessor shall remain responsible for increased electrical service and utility upgrades required by future code changes. Lessor may recover from Lessee the reasonable cost of repair only to the extent a repair is directly caused by Lessee’s negligence or willful misconduct.
b) Lessee’s Responsibility: Lessee shall operate its programs in accordance with this Lease and shall maintain, repair, and replace its own equipment, furniture, supplies, personal property, and other items owned by Lessee. Lessee shall promptly notify Lessor of any material defect or condition requiring repair for which Lessor is responsible. Lessee shall not be responsible for ordinary wear and tear or for latent defects or failures of building systems for which Lessor is responsible.
c) Waste: Lessee shall not commit or permit waste upon the Premises and shall comply with all applicable requirements concerning disposal of waste and byproducts. Lessee shall be responsible for recycling and for disposal of hazardous materials that may be generated by Lessee’s operations. 10) LIENS
a) General: Lessee hereby covenants to keep the Premises and every part thereof free and clear of any and all liens or encumbrances of any kind whatsoever created by Lessee’s acts or omissions and/or created by the performance of any labor or furnishing of any material, supplies, or equipment contemplated hereunder. Lessee further agrees to hold Lessor and the Premises and all parts thereof free and harmless from any such Lessee-created liens, claims, or demands, and any and all costs, damages or liability in connection therewith, together with reasonable attorney’s fees and all Actual Cost and expenses incurred by Lessor in negotiating, settling, defending, and otherwise protecting the Premises or any part thereof against such liens, claims or demands.
b) Mechanics’ and other Liens: Upon the Commencement Date 352
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

and continuing throughout the Term, Lessee shall not permit any mechanic’s, materialmen’s, contractor’s, sub-contractor or other lien, arising out of the performance of the Lease, to stand against the Premises, or any part thereof. If any such lien shall be filed against the Premises, Lessee shall cause the same to be discharged within ten (10) days after actual notice of such filing, by payment, deposit, or bond. If Lessee fails to discharge any such lien, Lessor may, but shall not be obligated to, discharge the same, and any amount so paid or deposited by Lessor and all costs and expenses incurred by Lessor, including reasonable attorney’s fees, shall become immediately due and payable by Lessee to Lessor, together with interest thereon computed at the rate of seven percent (7%) per annum. If Lessee desires to contest any such lien, Lessee shall notify Lessor in writing of Lessee’s intention to do so within ten (10) days after the filing of and service upon Lessee of such lien, or lose the right to contest. In such case, provided that Lessee shall furnish the bond required by California Civil Code Section 3143 (or any comparable statute hereafter enacted for providing a bond freeing the Premises from the effect of such lien), Lessee shall not be in default until five days after the final determination of the validity thereof, within which time Lessee shall satisfy and discharge any such lien to the extent held valid, but the satisfaction and discharge of any such lien shall not, in any case, be delayed until execution is had upon any judgment rendered thereto, and such delay shall be a material default of Lessee hereunder. In the event of any such contest, Lessee shall defend, protect, hold harmless, and indemnify Lessor against all loss, costs, expense and damage, including reasonable attorney’s fees and costs, resulting therefrom.
11) INDEMNIFICATION AND INSURANCE
a) Indemnification: Except for loss or damage arising from the negligence, gross negligence, willful misconduct, or other legally attributable fault of Lessor or a Lessor Indemnitee, Lessee shall indemnify, defend, and hold harmless Lessor and the Lessor Indemnitees from claims, damages, liabilities, costs, and reasonable attorneys’ fees arising from Lessee’s use or occupancy of the Premises, Lessee’s operations, or the acts or omissions of Lessee or its agents, employees, contractors, students, invitees, or guests, to the extent caused by Lessee. Nothing in this provision requires Lessee to indemnify Lessor for Lessor’s own negligence, willful misconduct, or violation of this Lease. The indemnity shall survive termination to the extent claims arise from events occurring during the Term.
b) Lessee’s Insurance: Without limiting the Lessee’s
indemnification of Lessor and during the term of this Lease, and until all of its obligations pursuant to this Lease have been met, Lessee shall provide and maintain at its own expense insurance coverage satisfying the requirements 353
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

specified in this Lease. These minimum insurance coverage terms, types and limits (the “Required Insurance”) also are in addition to and separate from any other contractual obligation imposed upon Lessee pursuant to this Lease. The Lessor in no way warrants that the Required Insurance is sufficient to protect the Lessee for liabilities which may arise from or relate to this Lease. c) Lessee also shall promptly notify Lessor of any third party claim or suit filed against Lessee which arises from or relates to this Lease, and could result in the filing of a claim or lawsuit against Lessee and/or Lessor. d) Evidence of Coverage and Notice to Lessor:
(i) Certificate(s) of insurance coverage (Certificate) satisfactory to Lessor, and a copy of an Additional Insured endorsement confirming Lessor and its Agents (defined below) has been given Insured status under the Lessee’s General Liability policy, shall be delivered to Lessor at the address shown below and provided prior to the start day of this Lease. (ii) Renewal Certificates shall be provided to Lessor not less than 10 days prior to Lessee’s policy expiration dates. The Lessor reserves the right to obtain complete, certified copies of any required Lessee insurance policies at any time.
(iii) Certificates shall identify all Required Insurance coverage types and limits specified herein, reference this Lease by name or number, and be signed by an authorized representative of the insurer(s). The Insured party named on the Certificate shall match the name of the Lessee identified in this Lease. Certificates shall provide the full name of each insurer providing coverage, its NAIC (National Association of Insurance Commissioners) identification number, its financial rating, the amounts of any policy deductibles or self-insured retentions exceeding twenty-five thousand ($25,000.00) dollars, and list any Lessor required endorsement forms.
(iv) Neither the Lessor’s failure to obtain, nor the Lessor’s receipt of, or failure to object to a non-complying insurance certificate or endorsement, or any other insurance documentation or information provided by the Lessee, its insurance broker(s) and/or insurer(s), shall be construed as a waiver of any of the Required Insurance provisions.
(v) Certificates and copies of any required endorsements, notices of cancellation shall be delivered to:

Title: City Manager or Authorized Designee
LESSOR: CITY OF LINCOLN, CALIFORNIA
600 Sixth Street
354
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

Lincoln, CA 95648
e) Additional Insured Status and Scope of Coverage: Lessor and its elected officials, officers, employees, agents, and volunteers shall be named as additional insureds under Lessee’s commercial general liability policy, but only with respect to liability arising from Lessee’s acts, omissions, operations, or use of the Premises. Additional insured coverage shall not extend to liability arising solely from Lessor’s own negligence, willful misconduct, or breach of this Lease.
f) Cancellation of or Changes in Insurance: Lessee shall provide evidence of renewal and any cancellation or material change in Required Insurance in accordance with the requirements of its insurer and applicable law.

Failure to maintain Required Insurance shall constitute a material breach only after written notice and a reasonable opportunity to cure, except where immediate action is required by law or an actual lapse creates an immediate uninsured risk.
g) Failure to Maintain Insurance: Lessee’s failure to
maintain or to provide acceptable evidence that it maintains the Required Insurance shall constitute a material breach of the Lease. h) Insurer Financial Ratings: Insurance is to be provided by an insurance company authorized to do business in California and acceptable to the Lessor, with an A.M. Best rating of not less than A:VD, unless otherwise approved by the Lessor.
i) Lessee’s Insurance Shall be Primary: Lessee’s liability insurance shall be primary and noncontributory solely with respect to claims arising from Lessee’s acts, omissions, operations, or use of the Premises.

Lessor’s insurance or self-insurance shall not be required to respond before Lessee’s coverage for such claims.
j) Waiver of Subrogation: To the extent commercially
available and permitted by the applicable insurance policies, each party shall seek a waiver of subrogation in favor of the other for losses covered by the waiving party’s insurance, except to the extent the loss arises from the other party’s gross negligence or willful misconduct or the waiver is prohibited by law or the applicable insurance policy.
k) Deductibles and Self-Insured Retentions (SIRs):

Lessee’s policies shall not obligate the Lessor to pay any portion of any Lessee deductible or SIR. The Lessor retains the right to require Lessee to reduce or eliminate policy deductibles and SIRs as respects the Lessor, or to provide a bond guaranteeing Lessee’s payment of all deductibles and SIRs, including all related claims investigation, administration and defense expenses. Such bond shall be executed by a corporate surety licensed to transact business in the State of California.
l) Claims Made Coverage: If any part of the Required
355
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

Insurance is written on claims made basis, any policy retroactive date shall precede the start date of this Lease. Lessee understands and agrees it shall maintain such coverage for a period of not less than three (3) years following this Lease expiration, termination or cancellation.
m) Application of Excess Liability Coverage: Lessee may use a combination of primary and excess insurance policies which provide coverage as broad as (“follow form” over) the underlying primary policies, to satisfy the Required Insurance provisions.
n) Separation of Insureds: All liability policies shall provide cross-liability coverage as would be afforded by the standard ISO (Insurance Services Office, Inc.) separation of insureds provision with no insured versus insured exclusions or limitations.
o) Insurance Coverage Requirements: Lessee shall maintain commercial general liability insurance, workers’ compensation and employers’ liability insurance, and insurance covering Lessee’s personal property, equipment, and business interruption, in amounts and forms reasonably acceptable to the parties and subject to review by Lessee’s insurance broker and the City’s risk-management representative.
p) General Liability insurance (written by ISO policy
form): General Liability insurance shall be written on ISO CG 00 01 or equivalent and shall name the City of Lincoln as an additional insured solely as provided above.

General Aggregate: $2 million
Products/Completed Operations: $1 million
Personal & Advertising Injury: $1 million
Each Occurrence: $1 million
q) Workers Compensation and Employers’ Liability:

Lessee much maintain worker compensation and employer’s liability insurance providing workers compensation benefits, as required by the Labor Code of the State of California and for which Lessee is responsible, and including Employers’ Liability coverage with limits of not less than the following:

Each Accident: $1 million
Disease - policy limit: $1 million
Disease - each employee: $1 million
r) Commercial Property Insurance. Lessee shall
maintain insurance for Lessee’s personal property, equipment, furniture, supplies, and other Lessee-owned property located at the Premises. Lessor shall maintain insurance or self-insurance for the City-owned Building and City-owned improvements consistent with the City’s customary risk-management program.

Lessee shall not be required to insure City-owned structural components or 356
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

building systems unless otherwise agreed in writing.
12) REPAIR AND RESTORATION
a) Notice of Damage to Premises: If the Premises is damaged or destroyed by fire or other casualty, Lessee shall promptly notify Lessor. The parties shall cooperate in securing the Building and evaluating the damage. b) Damage by Covered Risk: If the Building is damaged by a covered casualty, Lessor shall be responsible for repairing and restoring the Building and City-owned improvements to substantially the condition existing immediately before the casualty, using available insurance proceeds and City funds as applicable. Lessee shall be responsible for restoring or replacing Lessee-owned equipment, personal property, supplies, and other Lessee-owned assets using applicable insurance proceeds.
c) Damage Not Covered: If the Building is substantially damaged by a risk not covered by available insurance and cannot reasonably be restored, either party may elect to terminate this Lease by written notice after consultation concerning the feasibility and cost of restoration. If the Building is rendered unusable for the Permitted Use for more than one hundred eighty (180) consecutive days due to casualty, either party may terminate upon thirty (30) days’ written notice unless the parties agree in writing to extend the restoration period. Base Rent shall be abated for any period during which the Building is unusable for the Permitted Use due to a casualty not caused by Lessee. d) Repairs to Building: Premises, or Improvements. Repairs and restoration of the Building and City-owned improvements shall be performed by or under the direction of Lessor. Repairs to Lessee-owned equipment and personal property shall be performed by Lessee. Each party shall use commercially reasonable efforts to complete its respective restoration obligations promptly and in accordance with applicable law.
e) Termination of Lease if Unable to Repair or Restore: If applicable law prevents restoration of the Building for the Permitted Use, or if the parties determine in good faith that restoration is not reasonably feasible, either party may terminate this Lease on sixty (60) days’ written notice. Insurance proceeds attributable to City-owned property shall be paid as required by the applicable policy and law to Lessor; proceeds attributable to Lessee-owned property shall be paid to Lessee. Nothing in this provision transfers ownership of Lessee’s assets to Lessor.
13) DEFAULT
a) Material Default: The occurrence of any of the following shall constitute a 357
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

material default and breach of this Lease (each an “Event of Default”):
i) Failure to Make Payment: A failure by Lessee to observe and make any payment of money to Lessor when such failure continues for thirty (30) days after the date such payment was due.
ii) Failure to Perform: A failure by Lessee to observe and perform any agreement, term, covenant or condition in this Lease applicable to Lessee (“Lessee’s Obligations”) when such failure continues for thirty (30) days after written notice thereof to Lessee; provided, however, that if the nature of such default is such that the same cannot reasonably be cured within such thirty (30) day period, Lessee shall not be deemed to be in default if Lessee shall within such period commence such cure and thereafter diligently prosecute the same to completion, which in no event shall be more than sixty (60) days from receipt of the written notice described above.
iii) Transfer: Transferring Lessee’s interest in this Lease in violation of Section 16.
b) Temporary Closure: A temporary closure, suspension, or reduction of programs for fewer than one hundred twenty (120) consecutive days shall not constitute an Event of Default if caused by construction, casualty, force majeure, staffing transition, safety concerns, public-health requirements, or other circumstances beyond Lessee’s reasonable control. A material cessation of operations for more than one hundred twenty (120) consecutive days, other than for such circumstances, may constitute an Event of Default after written notice and opportunity to cure.
c) Remedies: If Lessee defaults under this Lease beyond any applicable grace or cure period, Lessor, without further notice to Lessee shall, in addition to any other remedies available by law or equity, have one or more of the following remedies at Lessor’s sole election:
i) Without barring later election of any other remedy and without terminating Lessee’s right to possession of the Premises, or any part thereof, Lessor may require strict performance of all covenants and obligations herein as the same shall accrue or become due, without terminating this Lease, and Lessor shall have the right of action therefor without awaiting the end of the Lease term. ii) If Lessor obtains possession of the Premises under a judgment pursuant to Section 1174 of the California Code of Civil Procedure (unless Lessee obtains relief under Section 1179 of that Code) or if Lessor, by written notice declares the Lease to be terminated 358
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

because of breach of this Lease, then Lessor may enter upon the Premises and remove any and all persons and or property whatsoever situated thereon, and place all or any portion of said property in storage for the account of and at the expense of Lessee and dispose of such property in accordance with applicable laws.

Lessor shall be entitled to recover in one or more awards or judgment from Lessee:
(1) Any amount necessary to compensate Lessor for all the detriment caused by Lessee’s failure to perform Lessee’s obligations under this Lease, or which in the ordinary course of things would be likely to result therefrom. Such other amount shall include, but not be limited to, such expenses (including reasonable attorney’s fees and expenses) as
Lessor may have paid, assumed, or incurred in recovering possession of Premises, placing the Premises in good order and condition, preparing or altering Premises for reletting, and reletting the Premises during any part of time for which a rental concession, if any, had been given by Lessor.
(2) Lessor may, at Lessor’s election, terminate this Lease by giving Lessee notice of termination. On the giving of the notice to Lessee, all Lessee’s rights in the Premises and in the Building shall terminate. Lessor shall not be deemed to have terminated this Lease unless Lessor shall have so
declared in writing to Lessee, nor shall Lessor be deemed to have accepted or consented to an abandonment by Lessee
by performing acts intended to maintain or preserve the Premises, making efforts to relet the Premises or appointing a receiver to protect Lessor’s interest under this Lease.

Promptly after notice of termination, Lessee shall surrender and vacate the Premises in a broom-clean condition, and Lessor may re-enter and take possession of the Premises and/or eject all parties in possession, some and not others, or eject none. Termination under this Section shall not relieve Lessee from any obligations under this Lease or from any claim for damages incurred or accruing against Lessee up to the date of termination. Lessee shall remain liable to Lessor for damages in an amount equal to the Rent that
would have been owing by Lessee hereunder for the
balance of the Term, had this Lease not been terminated, less the rental value of reletting of the Premises by Lessor subsequent to such termination, after deducting all of
Lessor's expenses, if any, in connection with such recovery of possession or reletting.
359
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

(d) Subject to Lessee’s and Lessor’s rights to contest as provided elsewhere in this Lease, if, at any time during the Term of this Lease, Lessee fails, refuses, or neglects to do any of the things herein required to be done by the Lessee, Lessor shall have the right, but not the obligation, to do the same, but at the cost of and for the account of the Lessee; provided, however, that the Lessor shall in no case take such action until first giving the Lessee written notice of such failure, refusal, or neglect and allowing time periods, if any, as specified in this Lease, within which Lessee may commence a bona fide effort to cure the same. (e) Equitable Relief: Nothing contained herein shall affect, change, or waive any rights of Lessor or Lessee to obtain equitable relief when such relief is otherwise appropriate, or to obtain the relief provided by Chapter 4 (commencing with Section 1159) of Title 3 of Part 3 of the Code of Civil Procedure, relating to actions for unlawful detainer, forcible entry, and forcible detainer. (f) Cumulative Remedies: The remedies of Lessor as provided above are cumulative and in addition to, rather than exclusive of, any other remedy of Lessor herein given or that may be permitted by Law. Any lawful re-entry as provided for herein shall not make Lessor liable in damages or guilty of trespass because of any such lawful re-entry.
(g) Default by Lessor: Lessor shall not be in default unless Lessor fails to perform a material obligation under this Lease and fails to commence curing the default within thirty (30) business days after written notice from Lessee, or, if the default cannot reasonably be cured within that period, fails to commence a diligent cure within thirty (30) business days and thereafter diligently prosecute the cure to completion. Subject to applicable governmental immunities and law, Lessee may seek specific performance, injunctive or other equitable relief, reimbursement of reasonable documented costs directly caused by an uncured material default, or termination of this Lease following a material uncured default. Nothing in this provision waives any governmental immunity or statutory limitation applicable to Lessor.
(h) No Waiver of Legal Rights: Nothing in this Lease waives or limits either party’s right to enforce the express terms of this Lease or to seek any remedy available under applicable law, subject to governmental immunities and other limitations imposed by law. The parties intend this provision to replace any broad covenant not to sue contained in prior drafts.
14) WAIVER OF CONDITIONS OR COVENANTS: Any
waiver by Lessor of any breach or any one or more of the covenants, conditions, terms and agreements of this Lease shall not be construed to be a waiver of any subsequent or other breach of the same or of any other covenant, condition, term, or agreement of this Lease, nor shall failure on the part of Lessor to require 360
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

exact, full and complete compliance with any of the covenants, conditions, terms, and agreements of this Lease be construed as in any manner changing the terms hereof, nor shall the terms of this Lease be changed or altered in any manner whatsoever other than by written agreement between Lessor and Lessee. No delay, failure, or omission of Lessor to re-enter the Premises or to exercise any right, power, privilege, or option, arising from any default shall impair any such right, power, privilege, or option or be construed as a waiver of or acquiescence in such default or as a relinquishment of any right. (c) No notice to Lessee shall be required to restore or revise “time is of the essence” after the waiver by Lessor of any default. No option, right, power, remedy, or privilege of Lessor shall be construed as being exhausted by the exercise thereof in one or more instances. The rights, powers, options, and remedies given to the Lessor by this Lease shall be cumulative. Any waiver by the Lessor must be in writing to be effective.
15) EMINENT DOMAIN: If all or a material portion of the Premises is taken by eminent domain or other governmental action, the parties shall cooperate in good faith to protect their respective interests. Lessee shall be entitled, to the extent permitted by law, to seek an award for the value of Lessee’s leasehold interest, moving and relocation costs, loss of Lessee-owned personal property and equipment, and the unamortized value of Lessee-funded improvements for which compensation is legally available. Lessor shall be entitled to the award attributable to the City’s ownership interest and City-owned improvements. Neither party shall waive or impair the other party’s right to pursue a separate claim.
16) ASSIGNMENT/SUBLETTING
(a) No Assignment: Lessee shall not, without the prior written consent of Lessor (which consent shall not be unreasonably withheld, conditioned, or delayed), either directly or indirectly give, assign, hypothecate, encumber, transfer, or grant control of this Lease or any interest, right, or privilege therein (each a “Transfer”). An unauthorized assignment or transfer in violation of this Lease shall constitute an Event of Default, subject to the notice and cure provisions of this Lease.Any assignment must be to another non-profit or other eligible entity under Government Code section 26227. For purposes of this provision, the following acts of Lessee shall be considered an assignment requiring the prior written consent of Lessor to be effective:
i)Any disposition(s) that effectuates a change in the majority control of Lessee to any person(s), corporation, partnership, or legal entity other than the majority controlling interest therein at the time of execution of this Lease; and
361
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

ii)Subleases; Permitted Program or Use Agreements: Lessee may, without prior City approval, enter into ordinary-course artist studio agreements, memberships, licenses, rentals, instructor and artist agreements, class and workshop agreements, gallery and exhibition agreements, nonprofit or community-partner programming agreements, and similar arrangements consistent with Lessee’s Mission and the Permitted Uses (collectively, “Permitted Program Agreements or Use Agreements”). Such arrangements shall not constitute a Transfer, Assignment, or Sublease under this Section, provided they do not purport to transfer Lessee’s entire leasehold interest or otherwise violate this Lease. Artist studio agreements may provide a designated studio to an individual artist for the artist’s exclusive use and shall include reasonable operating and participation requirements intended to keep the Center active and engaged with the community. Membership agreements may provide artists and other members with scheduled access to the lower-level workshop, subject to availability and the Center’s operating rules. Neither an artist studio agreement nor a membership agreement is intended to constitute a sublease to another organization. Lessee shall not sublease, assign, or otherwise transfer exclusive possession of all or any material portion of the Premises to another commercial or nonprofit organization without Lessor’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. Any assumption, assignment, delegation, or takeoverproposed sublease shall be consistent with Lessee’s Mission, the Permitted Uses, and the public purpose of any of the Lessee’s duties, responsibilities, obligations, or performance of same hereunder by any entity other than the Lessee (whether through assignment, subcontract, delegation, merger, buyout, or any other mechanism), with or without consideration, for any reason whatsoever.the Premises.
b) No Involuntary Assignment: Neither this Lease nor any interest therein shall be assignable or transferable in proceedings in attachment, garnishment or execution against Lessee, or in voluntary or involuntary proceedings in bankruptcy or insolvency or receivership taken by or against Lessee, so that the same and the making by Lessee of any general assignment for the benefit of creditors; or the filing of a petition to have Lessee adjudicated a bankruptcy, or the filing of a petition for reorganization or arrangement under any law relating to bankruptcy unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days; or the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, when such seizure is not discharged within sixty (60) days, shall be a Material Default under this Lease. c) Subleases; Permitted Program or Use Agreements: For purposes of this Section 16, Permitted Program Agreements or Use Agreements entered into by Lessee to carry out its Mission consistent with Permitted Uses shall not constitute a Transfer or Assignment. The term “Sublease” shall not include Permitted Program Agreements or Use Agreements. Lessee shall not assign or transfer this Lease without Lessor’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. Any proposed assignment shall 362
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

be to a nonprofit or other legally eligible entity and shall be subject to applicable law. Permitted Program Agreements or Use Agreements may be entered into in the ordinary course without City approval, provided they do not purport to transfer Lessee’s entire leasehold interest or otherwise violate this Lease. Lessee shall maintain reasonable records of such arrangements and may provide an annual summary to the City upon request.
17) NO ENCUMBRANCES
Lessee shall not have the right to mortgage, hypothecate, or encumber all or any portion of the Lessee’s interest under the Lease.
18) LESSEE’S FIXTURES AND PERSONAL PROPERTY
a) Lessee may remove, at its own expense, during or at the expiration or termination of this Lease, all fixtures, equipment, furniture, supplies, artwork, records, computers, tools, kiln-related equipment, and other personal property owned by Lessee or acquired with Lessee funds or unrestricted donor funds (collectively, “LCAC Assets”), provided that Lessee repairs any material damage caused by removal. Lessor shall not have the right to require Lessee to surrender LCAC Assets to Lessor. City-funded equipment and improvements that are expressly identified as City property shall remain City property. b) LCAC Assets shall remain the sole property of Lessee and shall not become City property merely because they are located in or affixed to the Premises. Any item expressly identified in writing as City-funded and City-owned shall remain the property of Lessor. The parties may maintain a mutually agreed inventory of City-owned equipment and LCAC Assets.
c) Any Lessor equipment, furniture, and personal property existing on the Premises as of the commencement date of this Lease shall remain the property of Lessor during and after the expiration of the Lease term. Lessor will be responsible for maintaining its own personal property. 19) HAZARDOUS SUBSTANCES
a) Definition: For purpose of this Lease, the term Hazardous Substances shall be deemed to include “hazardous substances” as defined in California Health and Safety Code Section 25316, and those chemicals and substances identified pursuant to Health and Safety Code Section 25249.8. b) Warranties, Representations, and Covenants: Lessee may use, store, and dispose of ordinary clay, ceramic materials, glazes, kiln materials, cleaning products, and other substances customarily used in professional 363
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

ceramic-arts operations, provided they are handled, stored, used, and disposed of in compliance with applicable laws, permits, manufacturer requirements, and accepted safety practices. Lessee shall not introduce or store materials outside the ordinary scope of the Permitted Use that require special regulatory treatment without first obtaining any required governmental approvals and providing reasonable notice to Lessor. Lessor shall be responsible for pre-existing environmental contamination or hazardous conditions existing before Lessee’s occupancy, except to the extent caused or exacerbated by Lessee. c) Notice: Lessee agrees to immediately notify Lessor when Hazardous Substances have been released on the Premises, upon becoming aware of the same.
d) Indemnity: Lessee shall indemnify, defend, and hold harmless Lessor from liability arising from a release of hazardous substances caused by Lessee’s negligence, willful misconduct, or violation of applicable law. Lessor shall be responsible for pre-existing contamination except to the extent caused or exacerbated by Lessee.
e) Default:A material violation of this Section that remains uncured after notice and the applicable cure period may constitute an Event of Default. 20) SURRENDER OF THE PREMISES; HOLDING OVER: At the
end of the Term, Lessee shall quit and surrender to Lessor the Premises vacant, broom-clean, and in good order and condition, ordinary wear and tear excepted.

Lessee shall deliver to Lessor all keys and security cards to the Premises, whether such keys were furnished by Lessor or otherwise procured by Lessee, and shall inform Lessor of the combination of each lock, safe and vault, if any, in the Premises. If Lessee fails to vacate the Premises on the last day of the Term in the condition required hereunder, Lessor shall be entitled to re-enter without process and without notice (any notice to quit or of re-entry being expressly waived) using such force as may be reasonably necessary, and alternatively, shall have the benefit of all provisions of applicable law respecting the speedy recovery of possession of the Premises (whether by summary proceedings or otherwise) to the same extent as if statutory notice had been given. In addition to and not in limitation of the foregoing, occupancy subsequent to the last day of the Term (“Holdover Occupancy”) shall be a tenancy at will. Holdover Occupancy shall be subject to all terms, covenants, and conditions of the Lease, and Base Rent during any authorized holdover period shall remain at the rate then applicable under this Lease, unless otherwise agreed in writing by the parties. 21) ADMINISTRATION: The City Manager or authorized
designee shall have the authority to administer this Lease on behalf of the City of Lincoln.
364
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

22) ALTERATIONS: Lessee shall not make material structural or building-system alterations without Lessor’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. Consent shall be given or denied within thirty (30) days after receipt of a reasonably complete request. If Lessor does not respond within thirty (30) days, the request shall be deemed approved, provided the proposed work complies with applicable law and does not materially affect the structural integrity or major building systems of the Building.

Lessor may require plans, permits, proof of insurance, and reasonable construction documentation. Ordinary installation or replacement of furniture, equipment, artwork, nonstructural fixtures, and similar items consistent with the Permitted Use shall not require prior City approval.
23) SECURITY: Lessee shall be responsible for reasonable security practices associated with its operations, including security-system monitoring. Lessor shall remain responsible for maintaining City-owned building security hardware installed as part of the building improvements, except for damage caused by Lessee. Nothing in this Lease creates a duty on Lessor to provide security services or protect persons or property from criminal acts, except as otherwise required by law.
24) LESSOR’S RIGHTS OF ACCESS: Upon at least two (2)
business days’ prior written notice, except in emergencies or as otherwise required by law, Lessor may enter the Premises to inspect, perform Lessor’s obligations, address emergencies, or exercise rights expressly provided by this Lease. Lessor shall use reasonable efforts to minimize interference with Lessee’s programs and shall coordinate access with Lessee when practicable. If Lessor’s entry or work materially prevents use of the Premises for the Permitted Use for more than a brief period, the parties shall cooperate to minimize the impact and, where appropriate, consider temporary rent abatement or schedule adjustments. 25) NOTICES: Any notice under this Lease shall be in writing and delivered personally, by certified or registered U.S. mail, by recognized overnight courier, or by another method agreed by the parties that provides reasonable evidence of delivery. Notices to Lessor shall be addressed to the City Manager, City of Lincoln, 600 Sixth Street, Lincoln, California 95648. Notices to Lessee shall be addressed to Lincoln Clay Arts Center, 590 Fifth Street, Lincoln, California 95648, or to such other address designated by written notice. 26) GENERAL PROVISIONS:
a) Waiver: The waiver by Lessor or Lessee of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition on any subsequent breach of the same or any other term, 365
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

covenant, or condition herein contained. All waivers must be in writing to be effective.
b) Marginal Headings: The Section titles in this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.
c) Time: Time is of the essence for this Lease and each and all of its provisions in which performance is a factor.
d) Recordation: Lessee may record this Lease or a memorandum of lease in the official records of Placer County without further consent from Lessor. The parties may execute a memorandum identifying the Premises, Term, Extension Options, and other customary recordable information while keeping the full Lease available as required by law.
e) Binding on Successors: Each and all of the terms and agreements herein contained shall be binding upon and shall inure to the benefit of the successors in interest of the Lessee, and whatever the context permits or requires, the successors in interest to the Lessor.
f) Prior Agreements: This Lease, together with its exhibits and any written agreements expressly incorporated by reference, contains the parties’ agreement concerning the subject matter. Any amendment must be in writing and signed by authorized representatives of both parties. g) Unavoidable Delay: Any prevention, delay, non-performance or stoppage due to any of the following causes shall excuse non-performance for a period equal to any such prevention, delay, non-performance or stoppage. The causes referred to above are: strikes, lockouts, labor disputes, failure of power, irresistible superhuman cause, acts of public enemies, riots, insurrections, civil commotion, inability to obtain labor or materials or reasonable substitutes for either, Governmental restrictions or regulations or controls, casualties not contemplated by insurance provisions of this Lease, pandemic or other cause beyond the reasonable control of the party obligated to perform. This Section 26 shall not apply to any monetary obligation set forth in the Lease, and all such monetary obligations shall not be excused in the event of an Unavoidable Delay. h) Severability: Any provision of this Lease that shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provisions shall remain in full force and effect. i) Cumulative Remedies: No remedy or election hereunder shall be deemed exclusive but shall wherever possible be cumulative with all other remedies at law or in equity.
366
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

j) Choice of Law and Forum: This Lease shall be governed by the internal laws of the State of California. Any litigation with respect to this Lease shall be conducted in the courts of Placer County, California. k) Interpretation: Unless the context of this Lease clearly requires otherwise: (i) the plural and singular numbers shall be deemed to include the other; (ii) the masculine, feminine and neuter genders shall be deemed to include the others; (iii) “or” is not exclusive; and (iv) “includes” and “including” are not limiting.
l) Administration of Lessor Space: Lessor does not grant or delegate to Lessee hereunder any of its governmental powers (statutory, implied, administrative, or otherwise) with respect to the Premises. m) Conflict of Interest. No Lessor employee whose position in Lessor service enables him/her to influence obtaining or awarding any lease, license or permit, and no spouse or economic dependent of such employee, shall be employed in any capacity by Lessee herein, or have any other direct or indirect financial interest resulting from this Lease.
n) Solicitation of Consideration. It is improper for any Lessor Officer, employee or agent to solicit consideration, in any form, from a tenant with the implication, suggestion or statement that the tenant's provision of consideration may secure more favorable treatment for the tenant in the award of the lease or that the tenant's failure to provide such consideration may negatively affect Lessor's consideration of the tenant's submission. A tenant shall not offer to or give, either directly or through an intermediary, consideration, in any form, to a Lessor officer, employee or agent for the purpose of securing favorable treatment with respect to award of a lease. Lessee shall immediately report any attempt by a Lessor officer, employee or agent to solicit such improper consideration. The report shall be made either to the City Manager or such other appropriate City official or agency designated by the City. Failure to report such solicitation may result in the termination of this Lease. o) Title: Lessee acknowledges that Lessor holds title to the Land and Building and agrees not to challenge Lessor’s title. Nothing in this provision limits Lessee’s right to enforce this Lease.
p) Relocation Assistance: Nothing in this Lease waives any relocation assistance or other statutory right to which Lessee may be entitled under nonwaivable applicable law. To the extent legally permissible, expiration of the Lease at the end of the agreed Term shall not itself create a relocationassistance obligation. 367
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

IN WITNESS WHEREOF, the parties have executed this Lease as of the dates set forth below.

LESSEE: LINCOLN CLAY ARTS CENTER
a California nonprofit public benefit corporation
By: __________________________
Title: Chief Executive Officer
Date:________
LESSOR: CITY OF LINCOLN, CALIFORNIA
a body politic and corporate
By: __________________________
Title: City Manager or Authorized Designee
Date: ________

APPROVED AS TO
FORM:

City Attorney
368
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

EXHIBIT A — SITE PLAN AND LEGAL DESCRIPTION
The final Exhibit A shall include the legal description of the Land and a site plan showing the footprint of the Building provided by the City of Lincoln. The parties acknowledge that the Premises leased under this Lease consists of the Building, together with the access rights expressly granted in the Lease; the surrounding Land and grounds are not leased to Lessee.

EXHIBIT B — COMMUNITY BENEFITS
369
LINCOLN CLAY ARTS CENTER — DRAFT LEASE FOR NEGOTIATION

The Lincoln Clay Arts Center (LCAC) shall operate the Premises as a communityoriented arts and cultural facility. Community Benefits are intended to remain flexible and may evolve with community needs, available resources, and Lessee’s Mission.

They include, but are not limited to:
• Affordable and/or no-cost clay and ceramic arts classes, workshops, lectures, and educational programs, subject to securing donor funds.
• Opportunities for emerging and established artists to access affordable studio and workspace resources.
• Public exhibitions, educational displays, and programs relating to clay arts, local history, and the heritage of Lincoln.
• Youth and adult education and opportunities for creative skill development. • Community meetings, seminars, cultural discussions, and appropriate public or private events.
• Support for local artists and opportunities for artists to share knowledge, techniques, and creative practices.
• Volunteer opportunities and partnerships with schools, colleges, nonprofits, civic organizations, and other community institutions.
• Activities that contribute to the revitalization of downtown Lincoln and the preservation and adaptive reuse of the historic Carnegie Library.

The parties acknowledge that LCAC may pursue development of a future Public Art Park on the Land surrounding the Building. The Art Park is not part of the Premises under this Lease and may proceed only after funding is secured and the Lincoln City Council approves the project. A separate agreement will govern any approved Art Park development, use, maintenance, security, insurance, and operations. 370
LCAC Carnegie Library Lease
Response to City Comments
Background and Context
LCAC was established for the sole purpose of reactivating the Carnegie Library, a cherished Lincoln landmark that has been closed to the public since 2011. The AMS Feasibility Study identified a clay arts center as the most financially feasible option for reuse of the building. LCAC’s objective is to work with the City to bring the building back into productive public use while creating a sustainable arts and cultural resource for the community.

LCAC is a newly formed nonprofit, not a long-standing organization in search of a new facility. It was established specifically to assist the City in realizing a long-standing revitalization goal for downtown Lincoln. If the project does not move forward, LCAC would not have another facility or program to which the organization could readily redirect its resources.

LCAC’s core business model—private artist studios, pottery classes, and open studio sessions for members and walk-ins—is projected to reach break-even by the end of the third year of operation. A key element of that plan is a core professional staff consisting of a Studio Manager and Studio Assistant, supported by community volunteers.

Current Startup Challenges
● Completing the building improvements in a timely manner within the available funding. Since permits were only recently received, the Center’s opening is now likely to move from the first quarter to the second quarter of 2027.
● Securing funding for the additional equipment and services needed to open for business (the “Unfunded Startup Costs”).
● Securing funding to staff the Center in advance of opening. Without professional staff, LCAC would need to rely much more heavily on volunteers, which would be difficult given the Center’s planned hours of operation and the specialized experience required. ● LCAC’s Business Plan forecasts a startup funding shortfall of approximately $120,000 over the first three years of operation, with the largest shortfall occurring during the first year. ● LCAC Board members are actively pursuing startup funding and have met with community foundations, state and local elected officials, and other nonprofit organizations. LCAC has also submitted grant applications to various foundations. Startup funding is particularly challenging for a newly formed nonprofit without an established operating history.

Proposed Lease Approach
The proposed lease is intended to provide LCAC with sufficient long-term certainty to secure funding, establish the Center, and develop a sustainable operating model, while also providing the City with reasonable protections if the project does not perform as contemplated.

The proposed lease provides a 20-year initial term with two five-year extension options. This long-term structure is important to LCAC’s ability to establish a permanent community asset and 1 371
cultivate long-term and legacy support. At the same time, LCAC is willing to incorporate objective performance standards and other provisions that address the City’s concerns regarding project viability.

Responses to Issues Raised by the City

1. Lease Term and Mutual Protection
LCAC understands the City’s desire for a mechanism that would allow either party to address an extraordinary circumstance or a situation in which the project is no longer operating as contemplated. At the same time, an unrestricted termination-for-convenience provision would make it difficult for LCAC to secure multi-year funding commitments and long-term support.

To balance these interests, LCAC proposes that the lease establish objective performance standards beginning in the second year of operation. The standards would be tied directly to LCAC’s core business model and would provide the City with a measurable basis for action if the Center is not being operated as contemplated.

Specifically, LCAC proposes that, beginning in the second year of operation, the Center be required to maintain, on average over the preceding twelve-month period, at least three occupied artist studios and offer at least three workshops per month. If LCAC fails to meet these standards, the City could provide written notice identifying the deficiency and allow LCAC a reasonable period to cure it.

If the deficiency is not cured, the lease could convert to a month-to-month arrangement, with the City then having the right to terminate upon 90 days’ written notice.

This approach gives the City a meaningful protection if the Center is not performing as contemplated, while avoiding an unrestricted termination right that could undermine LCAC’s ability to secure long-term funding and establish the Center.

2. Utilities
LCAC understands the City’s recently adopted policy that nonprofit organizations with exclusive use of City-owned facilities generally are responsible for utilities. LCAC is therefore proposing a phased approach that recognizes the Center’s significant startup costs while establishing a clear path toward full responsibility for utilities.

Under LCAC’s proposal, the City would provide utilities (electricity, gas and water*) during the first three years of operation. Beginning in the fourth year, LCAC’s obligation to reimburse the City for the cost of electricity and gas would be subject to an annual financial test to determine whether sufficient funds from core operations are available to cover the utility costs.

If the annual test establishes that LCAC has the ability to pay, reimbursement would be mandatory and due within 30 days of receipt of the City’s invoice. Nonpayment would constitute a non-curable breach, subject to the termination provisions of the lease.

Beginning with the tenth anniversary of the lease, LCAC would assume full responsibility for utilities regardless of the annual financial test. This provides LCAC with needed assistance during the critical 2 372
startup period while establishing a definite transition to the City’s standard expectation that the nonprofit occupant ultimately bears the cost of utilities.

LCAC would also appreciate the opportunity to explore the City’s possible provision of Wi-Fi service through the City Hall tower, if technically and operationally feasible.

3. Subletting
LCAC agrees with the City’s concern that any future sublease to another organization should be subject to City approval to ensure that the public benefit and civic purpose of the facility remain consistent with the original concept.

The existing subletting language was intended to allow LCAC to operate its normal programs without obtaining City approval for each individual artist or member arrangement. LCAC’s Business Plan does not rely on revenue from subleasing the facility to other organizations.

LCAC therefore proposes language clarifying that it may enter into artist studio agreements and membership agreements in the ordinary course of operating the Center, but may not sublease or otherwise transfer occupancy of the premises to another commercial or nonprofit organization without the City’s prior written consent.

Artist studio agreements will allocate designated studio space to individual artists for their exclusive use and will include operating and participation requirements designed to keep the Center active and engaged with the community. Membership agreements will provide artists and other members with scheduled access to the lower-level workshop, subject to availability. Neither arrangement is intended to constitute a sublease to another organization.

Conclusion
LCAC believes these proposed modifications address the City’s concerns while preserving the long-term stability necessary to make the Carnegie Library project successful. They provide the City with objective performance protections, a defined transition toward full responsibility for utilities, and approval rights over any future subleasing, while allowing LCAC to operate the Center’s core programs without unnecessary administrative barriers.
* The water meter serves the property landscaping including Scout Hall Park in addition to the building, Given that the City is responsible for the landscaping, LCAC is requesting that the City be responsible for water until such time as LCAC enters into an agreement with the CIty regarding the proposed Public Art Park.
3 373
Lincoln Clay Arts Center
Transforming an historic landmark into a vibrant home for the clay arts The Lincoln Clay Arts Center (LCAC), in partnership with the City of Lincoln, is transforming the historic Carnegie Library into a center for the clay arts. Envisioned as a community-serving creative hub, its programs will focus on accessible instruction, shared ceramics workspace, artist development, and exhibitions that celebrate clay as both a contemporary art form and an essential part of Lincoln’s cultural identity. Built with signature Gladding, McBean terra cotta, the library has stood as a cherished downtown landmark for more than a century before closing as a public library in 2011. The new Clay Arts Center will revitalize this iconic venue into a dynamic hub that unites local history, public art, and contemporary creativity.

What the Center Will Offer
• Fully equipped ceramics workshop
• Classes and workshops for beginners through advanced potters • Fully equipped, open-concept artist studios
• Exhibition space for studio and invited artists
• Partnerships that expand access to learning and community participation A cherished building. A working arts center. A community resource. 1909
Carnegie Library
Opens
2001
First Major
Renovation
2025
Feasibility
Study
2026
Renovations
Begin
2026
Fundraising
Campaign
2027
Grand
Opening
Visit www.lincolnclayartscenter.org to learn more and support our mission 2011
Library
Closed
374
Lincoln Clay Arts Center
Transforming an historic landmark into a vibrant home for the clay arts The Lincoln Clay Arts Center (LCAC), in partnership with the City of Lincoln, is transforming Lincoln's historic Carnegie Library into an active, welcoming center for the clay arts. The project will provide artists of every experience level with space to learn, make, exhibit, and connect—while preserving a civic landmark for future generations to enjoy.

LCAC is envisioned as a community-serving creative hub, working in partnership with schools, businesses, nonprofits, civic organizations, studio artists, and the public. Its programs will center on accessible instruction, shared creative making spaces, artist development, and exhibits that celebrate clay as both a contemporary art form and an essential part of Lincoln's cultural identity.

What the Center Will Offer
• Fully equipped ceramics workshop
• Classes and workshops for beginners through advanced potters • Fully equipped open-concept artist studios
• Exhibition space for studio and invited artists
• Partnerships that expand access to arts learning and participation A historic building. A working arts center. A community resource. 375
Rooted in History
Reimagined for What's Next
Lincoln’s heritage is deeply rooted in the clay arts and architectural terra cotta.

Located at 5th and F Streets in the heart of downtown, the historic Carnegie Library perfectly embodies the community's long-standing commitment to education, history, and culture. Completed in 1909 through funding from Andrew Carnegie and premium building materials supplied by Gladding, McBean, the library served Lincoln for over a century before closing in 2011.

Though quiet for the past fifteen years, it remains one of the city's most cherished landmarks.

The new Clay Arts Center will build on that proud legacy—creating a dynamic destination where local history, public art, education, and contemporary creativity intersect. Key downtown revitalization strategies highlight the Carnegie Library as a premier venue dedicated to the clay arts and a showcase for historic Gladding, McBean terra cotta artifacts.

Why It Matters
• Preserves and activates a valued historic downtown landmark • Creates dedicated gallery and clay studio workspace
• Offers opportunities for learning and experimentation • Strengthens Lincoln's downtown cultural destination
• Celebrates the region's clay, architectural terra cotta, and public art legacy Visit www.lincolnclayartscenter.org to learn more and support our mission 1909
Carnegie Library
Opens
2001
First
Renovation
2025
Feasibility
Study
2026
Renovations
Begin
2026
Fundraising
Campaign
2027
Grand
Opening
376
SUBJECT: Discussion and Direction - Sister City Program SUBMITTED BY: City Clerk
DEPARTMENT: City Manager's Office
DATE: October 13, 2026
Item Number 15.B
STAFF RECOMMENDATION:

Staff requests that the City Council discuss the options outlined above and provide direction regarding whether the City should:

Take no action;
Monitor future opportunities;
Explore a Friendship City relationship;
Explore a formal Sister City relationship;
Support a community-led model; or
Return with additional information before further consideration.

BACKGROUND/INTRODUCTION:

Sister Cities International supports relationships between communities in the United States and communities abroad. These relationships are intended to promote cultural exchange, educational opportunities, civic engagement, municipal peer learning, and, where appropriate, economic and institutional connections.

A Sister City relationship is generally a formal, long-term partnership between two communities in different countries. It is typically established through an agreement approved by the respective local governments and supported by a local organization, commission, civic committee, or municipal staff structure.

A Friendship City relationship is generally less formal and may be used as an exploratory or short-term relationship. It may allow two communities to develop mutual interests, hold cultural or educational exchanges, and assess the level of community participation before considering a formal Sister City agreement.

Neither model requires the City to undertake major activities immediately; however, a meaningful program requires a clear purpose, local leadership, manageable expectations, and an identified funding approach.

STAFF REPORT
377
FINDINGS/ANALYSIS:

A relationship with an international community may provide Lincoln with opportunities for cultural programming, student and educational exchanges, municipal best-practice sharing, nonprofit and business connections, and broader community engagement.

Potential activities could include:

Student, teacher, library, arts, sports, or virtual exchanges; Cultural events, heritage programming, performances, and exhibits; Exchanges of municipal practices in areas such as infrastructure, water, emergency preparedness, economic development, recreation, tourism, sustainability, or community engagement;
Relationships among local schools, service clubs, businesses, chambers of commerce, nonprofits, and cultural organizations; and
Community-hosting opportunities and visitor delegations, subject to available resources and Council authorization.

The potential benefits should be balanced against the City’s capacity, staff resources, anticipated costs, and the level of demonstrated community participation. A formal relationship that lacks local organizational support or a practical work plan may become primarily ceremonial and provide limited ongoing benefit. Depending on the level of involvement and commitment to the program the costs could range from $2,500 - $15,000 annually.

There are a variety of options for Council to choose from:

Take no action;
Monitor future opportunities;
Explore a Friendship City relationship;
Explore a formal Sister City relationship;
Support a community-led model; or
Return with additional information before further consideration.

FISCAL IMPACT:

There is no immediate fiscal impact associated with conducting this discussion and providing direction.

Future costs would depend on the direction provided. Potential costs could include staff liaison time, membership fees, community outreach, legal review of agreements, hosting or ceremonial expenses, and program administration. Costs related to travel, exchanges, events, or delegations would require separate consideration and authorization by the City Council.

Staff could also evaluate potential non-General Fund support, including sponsorships, donations, participant fees, grants, and fundraising through an independent nonprofit or community organization.
378