City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
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File ID: 2022-02249 1/31/2023 Consent Item 4.
Agreement: Lease of Winn Park Building and Establishment of a MYOP File ID: 2022-02249
Location: District 4, Represented by Councilmember Valenzuela Recommendation: Adopt a Resolution: 1) Finding that it is in the best interests of the City to lease the City building at Winn Park to a non-profit community organization per City Code Section 3.68.100 E without bidding; 2) Approving the Memorandum of Understanding (MOU) and Lease with the Latino Center of Art and Culture (LCAC) for the lease of Winn Park Building at 1616 28th Street for an initial term of 10 years at the monthly rate of $1,600; 3) Authorizing the City Manager or the City Manager’s designee to execute the Lease Agreement in the form attached to the MOU; and 4) Establishing the Winn Park Building Multi-Year Operating Project (I19101300) for allocation of the rent proceeds to fund the City’s building maintenance obligations under the Lease Agreement.
Contact: Shannon Brown, Assistant Director, (916) 808-6076, [email protected], Barbara Smith, Administrative Officer (916) 808-5762, [email protected], Department of Youth, Parks & Community Enrichment.
Presenter: None
Attachments:
1. Description/Analysis
2. Resolution
3. Memorandum of Understanding and Lease of the Winn Park Community Center Building Description/Analysis
Issue Detail: The Winn Park building is a two story 3,292 sq. ft. building that was built in 1937 and was used as a telecommunications center for the City Fire Department but has been vacant for decades. The building needs extensive renovation to allow for use by a tenant. The City has undertaken work to stabilize the building, expand it to 3,912 sq. ft., and add an elevator and stairways
File ID: 2022-02249 1/31/2023 Consent Item 4.
to the entrance and second floor to meet the required accessibility and emergency exiting. These improvements will bring the building to a “cold shell” status. Also landscaping improvements to the park in the area surrounding the building will be added. The improvements include improving the lighting surrounding the building and the prior wrought iron fence around the building will be removed.
This work is expected to be completed in 2023.
The Latino Center of Art and Culture (LCAC), a 501 (c)(3) non-profit charitable corporation, desires to lease the City building at Winn Park to provide art, cultural, and other programs and events to benefit the public, which LCAC currently provides at the City’s Miller Park property leased to LCAC. LCAC will pay for all utility services and operating costs except for elevator maintenance, security alarm monitoring and fire extinguisher maintenance services.
Policy Considerations: City Council approval if required for lease of City buildings when the rent amount is less than market rate and the total lease payments over the term of the lease will exceed $250,000 per City Code Chapter 3.68 and City Code Section 3.04.020.
Economic Impacts: Not Applicable.
Environmental Considerations: The reuse of an existing building is exempt from environmental review under California Environmental Quality Act Guidelines section 15301 involving negligible expansion of the building and the former use. The Latino Center operation is not expected to create potentially foreseeable parking or noise impacts. The building is located within the center of the park, street parking is available, and the Lease Agreement imposes restrictions on operating hours and the need for a special event permit for outdoor events involving more than 50 persons.
Sustainability: None.
Commission/Committee Action: Not Applicable.
Rationale for Recommendation: The City Office of Innovation and Growth released a request for proposals for the lease of the Winn Park building, but the prior proposal to lease the building for a restaurant did not proceed due to costs. The Facilities Division of the Public Works Department is renovating the building to a “cold shell” status to make it ready for construction of tenant improvements. The Midtown Association assisted the City in outreach to find an interested tenant, but that effort also did not result in a viable proposal.
Thereafter, LCAC worked with Assembly Member McCarty to allocate $1 million in State funds in the form of a grant to CITY to fund most of the costs of the tenant improvements needed because LCAC was looking for a new and larger location for their events and programs The Facilities Division developed schematic plans for the interior spaces to accommodate LCAC’s programs. The use of the Winn Park building for cultural and arts programs that will benefit the public will help activate this park.
File ID: 2022-02249 1/31/2023 Consent Item 4.
Financial Considerations: The rent will generate approximately $19,200 on an annual basis. The rent proceeds will be deposited into the Winn Park Building Multi-Year Operating Project (I19101300) to fund the City’s building maintenance obligations under the Lease. $1 million in State funds in the form of a grant to the City will fund most of the costs of the improvements needed to allow for the building to be in a “warm shell” status so that it can be occupied. The City has allocated $200,000 from its General Fund to complete the “warm shell” work based on the budget attached as Exhibit C.
Local Business Enterprise (LBE): Not Applicable.
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
Approving the Memorandum of Understanding with
The Latino Center of Art and Culture (LCAC) for Lease of the Winn Park Building and Establishment of a Multi-Year Operating Project
BACKGROUND
A. The Winn Park building is located at 1616 28th Street. The building is a two story 3,292 sq. ft. building that was built in 1937 and was used as a telecommunications center for the City Fire Department but has been vacant for decades. The City has undertaken renovation of the building so that it is in a “warm Shell” status, suitable for construction of the tenant improvements.
B. City Code Section 3.68.110 E provides for leasing City property without bidding to a non-profit organization if the City Council finds that it is in the best interest of the City. The Latino Center of Art and Culture (LCAC) is a 501 (c)(3) non-profit community based LCAC that arranges for social and cultural events and programs, which benefit its members and the public consistent with its charitable mission.
C. LCAC worked with Assembly Member McCarty to allocate $1 million in State funds in the form of a grant to the City to fund most of the costs of the improvements needed to allow for the building to be in a “warm shell” status so that it can be occupied by a tenant, which was designated by Assembly Member McCarty to be LCAC. The State grant requires use of the building once improved, the Winn Park Community Center, by a community-based organization that would provide art, cultural, and other programs and events to benefit the public, which LCAC currently provides at the City’s Miller Park property leased to LCAC. The City and LCAC have developed a site plan for the interior of the building as shown in Exhibit B.
D. The City has coordinated with LCAC regarding the scope of improvements to be funded with the State grant, which construction work will be subject to competitive bidding and the State grant will also need to fund the City’s staff costs to manage the construction project. The cost estimate for the tenant improvement project to be funded by the State grant is insufficient and the City has allocated $200,000 from its General Fund to complete the “warm shell” work based on the budget attached as Exhibit C.
E. The lease term will be 10 years with two five-year renewal options at a rental rate of $1,600 per month. LCAC will pay for all building utilities and routine maintenance costs.
F. Leasing the building to LCAC will generate General Fund revenue to offset the City’s capital replacement and routine maintenance costs during the initial lease term. City Council approval is required to establish new multi-year operating projects.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. It is in the best interest of the City, pursuant to Sacramento City Code section 3.68.110 E, to lease the Winn Park building to The Latino Center of Art and Culture (LCAC), a non-profit charitable corporation and community based LCAC, without bidding.
Section 2. The Memorandum of Understanding is hereby approved. The City Manager or the City Manager’s designee is authorized to execute the MOU.
Section 3. The MOU includes the form of the Lease Agreement with LCAC for the Winn Park building for a 10-year term, with two discretionary renewal options, at a rate of $1,600 per month. The City Manager or the City Manager’s designee is authorized to execute the Lease Agreement.
Following execution of the Lease Agreement, the document number will be designated by the City Clerk.
Section 4. The lease revenues are allocated to the Youth, Parks, & Community Enrichment Department Operations. A new multi-year operating project (MYOP) is established as I19101300 for the maintenance of the building located at 1616 28
th Street. The MYOP will fund the City’s costs for
capital replacements and repairs of the building as required under the Lease Agreement.