Non-binding Term Sheet between the City of Palo Alto (hereinafter “the City” and the Friends of the Palo Alto Recreation Wellness Center (hereinafter “the Friends” or “FPARWC”), a nonprofit 501(c)(3) charitable organization incorporated in the state of California.
The Friends of the Palo Alto Recreation and Wellness Center and the City of Palo Alto wish to establish a public-private partnership to construct a Recreation Wellness Center (Project) at the Cubberley site. A Letter of Intent was approved by both parties in December 2024 with an objective to mutually agree upon a site on City-owned land of sufficient size and location to accommodate indoor recreation and wellness program space that is accessible to the community with Cubberley the assumed location. The Recreation Wellness Center was incorporated into the Cubberley Conceptual Master Plan adopted by the City Council in May 2026, solidifying Cubberley as the preferred location. This Term Sheet further details terms necessary to engage donors and advance the Project and will require further detail as project timeline progresses.
1. City Commitment
a. The City will provide approximately one (1) acre of City-owned land at the Cubberley site for a Recreation Wellness Center.
b. The commitment shall remain in effect for a period sufficient to allow the Friends to complete their capital fundraising campaign and Project construction.
2. Friends Commitment
a. The Friends will fundraise 100% of the costs to design and construct the Recreation Wellness Center, which is estimated to be $40 million. If the project exceeds that amount, or if the Friends are unable to raise the funds within two years, the parties shall meet to discuss next steps, including alternate funding sources.
b. The Friends capital campaign will be conducted in a timely manner and be independent of other fundraising efforts for the Cubberley project except partnering with other health, wellness and recreational focused organizations.
3. Mutual Cooperation and Support Agreement
a. The parties will establish a future binding agreement or agreements to detail the responsibilities of each party, including a timeline of significant milestones.
4. Design and Construction Team
a. The Friends will engage licensed and qualified contractors and other necessary consultants in compliance with City procurement and contracting procedures, as applicable.
b. The Friends design team will coordinate with other parties engaged in work adjacent to the Recreation Wellness Center.
c. The Friends will engage Vance Brown Builders to manage construction of the Project, subject to City oversight, with the scope and manner of such to be negotiated and documented by both parties.
d. A Construction Liaison Team will be established to facilitate efficient communication between the parties throughout project design and construction.
5. Construction Access
a. Prior to commencement of construction, the City and the Friends will negotiate and execute a construction access lease or license agreement granting the Friends site access for the duration of construction.
6. Permitting and Approvals
a. The City will use its reasonable and best efforts to issue all required permits, entitlements, and approvals necessary for the Project in a timely manner so as not to cause significant project delays.
b. The City will pay for all permit fees.
7. Existing Structures and Infrastructure
a. The City will be responsible for and shall fund the demolition of existing buildings at the Cubberley site.
b. The City will relocate City of Palo Alto utilities necessary to accommodate construction and operation of the new Recreation Wellness Center.
8. Existing Tenants
a. The Friends will not be responsible for relocating tenants displaced by Project demolition and construction including any related expenses.
9. Scope of Costs
a. All costs referenced in this Term Sheet include both soft and hard costs, including but not limited to:
i. Design and engineering
ii. Permitting and approvals
iii. Construction and site work
10. Operating Agreement
a. The City and the Friends will negotiate and execute a long-term Operating Agreement governing the use, operation, and maintenance of the Project prior to the commencement of construction.
11. Non-Binding Effect
a. Except as may be expressly agreed in writing, these terms are non-binding and are intended solely to guide the preparation of definitive agreements.