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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/19/2008 - SECOND READING OF ORDINANCE NO. 013, 2008, AUTHORI ITEM NUMBER: 13 AGENDA ITEM SUMMARY DATE: February 19, zoos FORT COLLINS CITY COUNCIL STAFF: Marty Heffernan Cheryl Donaldson SUBJECT Second Reading of Ordinance No.013,2008,Authorizing the Conveyance of an Ownership Interest in the New Museum/Discovery Science Center Facility to the Discovery Science Center. RECOMMENDATION Staff recommends adoption of this Ordinance on Second Reading. EXECUTIVE SUMMARY A partnership between the City and the Discovery Science Center(DSC)has been formed to build and jointly operate a new museum/science center together in order to provide visitors with an exceptional and unique experience combining science,history,nature and culture in a new and very exciting way. This Ordinance,unanimously adopted on First Reading on February 5,2008,conveys to the DSC an ownership interest in the new Museum/Discovery Science Center facility,including the land. The ownership interest cannot be conveyed or encumbered without the City's consent. Likewise, the City's ownership interest cannot be conveyed or encumbered without the DSC's consent. Each Party's ownership interest will be equal to its financial contribution to the project. The City's interest will include the value of the park land as the project will be constructed on land owned by the City on the east end of Lee Martinez Park. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- February 5, 2008. (w/o original attachments) ATTACHMENT 1 ITEM NUMBER: 18 A-B AGENDA ITEM SUMMARY DATE: February 5, 2008 FORT COLLINS CITY COUNCIL SJAFF: Marty Heffernan Cheryl Donaldson SUBJECT Items Relating to the Fort Collins Museum/Discovery Science Center Project. RECOMMENDATION Staff recommends adoption of the Resolution and Ordinance on First Reading. Staff will meet with the Chamber of Commerce and the Coloradoan to discuss the project and the partnership prior to the Council meeting. A summary of those meetings will be provided in the Council packet. The Cultural Resources Board cilTly enthusiastically supports it. FINANCIAL IMPACT In November 2005, Building on Basics (BOB) was passed by Fort Collins voters and included $6 million towards construction of a new joint facility for the Fort Collins Museum (FCM) and Discovery Science Center(DSC). BOB also included seven years of O&M funding for the facility. The ballot language required a contribution by DSC of no less than$3.6 million towards the project, which has been secured. hi addition to the BOB funding, operations will be funded with General Fund dollars currently allocated to operate the Fort Collins Museum,with revenues generated from admission fees, rentals and other facility operations and from funding secured by the non-profit corporation to be established to support the new institution. EXECUTIVE SUMMARY A. Resolution 2008-008 pprovi an e ys'e t Between the City and the Discovery Science Cen Au o ing e w Mscovery Science Center Project to Proceed, and Enhancing a Scope of the rojecde New Exhibits. B. Ordinance No.013,2008,Authorizing the Conveyance of an Ownership Interest in the New Museum/Discovery Science Center Facility to the Discovery Science Center. Adoption of the Resolution forms a true partnership between the City and the Discovery Science Center to build and jointly operate a new museum/science center together in order to provide visitors February 5, 2008 -2- Item No. 18 A-B with an exceptional and unique experience combining science,history, nature and culture in a new and very exciting way. The agreement provides for the construction and joint ownership and operation of the new facility, including the land. The project will be constructed on land owned by the City on the east end of Lekils ' z Adoption of the Resolution a. u)eivv n n the B ordinance that Council provide authorization for the project toaft repo m the City Manager and the City's Financial Officer verifying the DSC has the financial ability to fund no less than$3.6 million of the project costs. The Resolution also clarifies that the scope of the project includes new exhibits. Adoption of the Ordinance conveys to the DSC an ownership interest in the new Museum/Discovery Science Center facility, including the land. The ownership interest cannot be conveyed or encumbered without the City's consent. Likewise,the City's ownership interest cannot be conveyed or encumbered without the DSC's consent. Each Party's ownership interest will be equal to its financial contribution to the project. Consequently, the City's interest will include the value of the park land. The new Museum/Discovery Science Center is scheduled to open in the first half of 2011. The City and the DSC will continue fund-raising efforts through 2008 and will begin designing the facility later this year. Construction will begin in late 2009. BACKGROUND COPY DSC, a grassroots organization operating since 1989,brings to the partnership: strong community ties; excellent programming as the only hands-on science center in Colorado; a history of growing and sustaining its organization; drawing attendance from beyond Fort Collins' borders; a professional Executive Director with a strong science background and a proven ability to raise funds; a dedicated and talented staff; and a highly motivated, involved Board of Directors willing and excited to work with the FCM. FCM brings to the partnership: over 65 years of serving as the community's memory keeper; preserving the material culture and artifacts of this community as the only artifact collecting institution in Fort Collins; telling stories through artifacts and educational programming; a professional Executive Director with over 15 years of museum leadership and a proven ability to manage museums with diverse collections;and a dedicated,talented staff committed to working with DSC to provide exceptional s cc xp c to e m ity. FCM is engrained in the s.fabric of Fort Collin Since BOB was approved by the voters, the parties have participated in extensive discussion and other activities focused on planning, developing and establishing the Institution, and have adopted the following guiding principle: "To deliver an exceptional visitor experience, maintaining both short and long term sustainability, based on today's known facts, while fulfilling our respective institutional missions. " February 5, 2008 -3- Item No. 18 A-B Through this promise,the two organizations have developed an extensive Operating Agreement with the assistance of the City Attorney's Office and DSC legal counsel. In effect,the two organizations will act as one with both taking on the mission of science,history and culture. The DSC will revise its 501(c)3 status to bring fin p . , is referred to in the Operating Agreement as the Nonprofit C orati PC th e d the NPC will work in tandem to provide the unique experie of c 1 e s nce, unli any other. The building will be jointly owned and operated and nanc d oulde y both organizations. Benefits of the partnership include: • Developing a unique visitor experience, unlike anywhere else that combines Science, History,Nature, and Culture in a new and exciting way. • Creating a compelling attraction to draw visitors downtown. • Constructing an architectural icon for Fort Collins • Retaining DSC, a core cultural organization, in Fort Collins • Allowing both organizations to grow,physically and financially,with growing audiences and a sustainable future. Detailed Summary of Key Provisions of the Proposed Fort Collins Museum/Discovery Science Center Operating Agreement: Recitals The FCM and DSC wish to C 10ip Ybotinstitutions and create a premier educational experience for local residents and visitors by combining the current operations of the FCM and DSC into one institution. Section 2 - Funding and Construction of the Facility The Facility will be constructed on property already owned by the City as agreed upon by both the Nonprofit Corporation(NPC)Board of Directors and the City. The agreed upon site is at the corner of Cherry and College on the east side of Lee Martinez Park. Contracting for the Project and related products and services will be done by the City through its purchasing processes, and subject to applicable requirements of the City Code. The Project will be overseen by a Project Manager designated by the City with input from a "Project Team"made up of both City and NPC representatives. The NPC reserves the right to engage a separate project manager as its advisor and repre e P en . The City Council and the NPC Board will be asked to approv he desi fort F i ' be construction begins. The NPC has raised$3,600,000 i tchin ds ' der to t the requirements of Building on Basics. The NPC will provide $2,500,000 towards design and construction of the Facility and $1,100,000 for the creation or acquisition of science and technology exhibits at the Facility. The City will provide$6,000,000 to the Project and$200,000 O&M for 7 years from BOB funding. The balance of the funds needed for the Project will be raised by the parties in such amounts and by such methods as the parties agree are appropriate. February 5, 2008 -4- Item No. 18 A-B Section 3 - Ownership of Institution Property The Facility, including the land, will be jointly owned by the City and the NPC. The"Ownership Interest" in the Facility will bCThe e oYhout ive documented contributions and expenditures on the Proje 's o i include the value of the land. Institution collections,materiapla n orSCandFCMpriortoOpening Day shall remain the property of the NPC and the City respectively. New collections,materials and displays or other personal property purchased by,donated to or other acquired by the City or NPC on behalf of the Institution on Opening Day or thereafter will be owned by the party who acquired them. Section 4 - Structure. Purposes and Functions of the NPC The NPC will amend or restate its articles of incorporation,bylaws,rules and regulations so that the primary purpose of the NPC shall be support of the Institution. The City has the right to appoint up to three members or 15% of the NPC Board, whichever is greater. The remaining Boardede rs wi be selected b majority vote of the Board. Board members will be selected to pra ce w n r and cultural history, and science and technology mission of theo Section 5 - Management and Staffing of Institution The City and the NPC will jointly operate, manage and maintain the Facility and Institution in the public interest and for the use and purposes of a public museum. The Institution will be managed by the City Director and the NPC Director(together,the"Executive Directors"). The City Director will be an employee of the City, and the NPC Director will be an employee of the NPC and each shall answer to his or her repective employer. The Institution may be staffed with both City and NPC employees, who shall report to their respective Executive Directors. The Executive Directors will jointly prepare and present to the City and the NPC Board annually for review and approval an operating plan for the Institution that shall include detailed budgets and projections of revenue and expepy r i Section 7 - Financial Mamn U t , The City and the NPC will use the Operating Plan as the primary basis for financial management of the Institution and for determining their respective annual financial contributions towards the operation of the Institution. If needed, the Executive Directors will revise the Operating Plan to operate within the proposed budget. Admission fees must be set at an amount projected to generate at least 30% of the Institution's annual operating budget. (Note: revenue from fees will likely be much higher than 30% of the February 5, 2008 -5- Item No. 18 A-B operating budget). All revenue generated by the Institution from admission charges, store revenue, membership dues, facility rentals, vendors or concessionaires, and other program revenues ("Institution Revenue") will be revenue of the NPC. The NPC will also manage the Institution Endowment, and will make eCon 0?ifi: it ations of property, goods and services on behalf of the InstiThe NPC will apply the histff salaries and benefits for NPC Institution employees,and to pay for utilities,maintenance,insurance and other operating expenses of the Institution. If there is any surplus Institution Revenue it may be spent for other purposes described in the Operating Plan or become part of the Institution Endowment. The agreement states it is the City's intent to provide annual funding for the operation of the Institution in an amount equivalent to its current funding for the operation of the Fort Collins Museum ($744,000). However,the continuation of this funding is subject to annual appropriation by the City Council.The City will apply all funds first to fund staff salaries and benefits for the City Institution employees and pay for utilities,maintenance,insurance and other operating expenses.Any additional City Funds may then be spent for other purposes described in the Operating Plan, or, if the Executive Directors agree, be placed in a City reserve fund for the benefit of the Institution. A "Qualifying Event"entitles the C or City to exercise its ri t to assume full control of the Institution. If the City's propo d fin 1 cc 'b io to a eration of the Institution for the next year is less than $350, it ma be de ual ng Event. If the NPC financial contribution totals less than$1 00 x si f stitution venue)averaged over the previous three years it maybe deemed a Qualifying Event. Qualifying Events are discussed further in Section 9. The Facility will not be covered under the City's insurance, as it will not be a solely City owned building. The Institution will have its own separate insurance policy. Section 8 - Default and Dispute Resolution If either party defaults in its performance of the Agreement,the other party's only remedy is to bring a legal action for damages or specific performance. Termination of the Agreement for default is not an option, and a default is not a Qualifying Event. The Agreement also sets out a process for dispute resolution (Section 8.2)to be used before either party resorts to litigation to reso is Section 9 - Ass um tic n of Co of U uPent If either the City's or the NPC's acts or omissions result in a Qualifying Event the other party may give notice and will have the right to assume full responsibility for the operation of the Institution. This would not change the joint ownership of the Facility,but would give the controlling party the right to operate the Institution as it chooses, while also being solely responsible for all costs of maintenance and operation. February 5, 2008 -6- Item No. 18 A-B Section 10—Termination This Agreement may be terminated if the parties cannot agree on the project site, the design of the Facility,or a catastrophic event o d i t t uild.Additionally,either party may terminate this Agreement ithout c se at y po year's prior written notice to the other. If this Agreement is t ated i out c se en the p terminating the Agreement must relinquish its real property owne ' inte t cility. A copy of the Operating Agreement is included (Attachment 1) Matching Funds The BOB ordinance provides that construction of the project is contingent upon the City's receipt of documentation evidencing the financial ability of the DSC to fund no less than$3.6 million of the project cost, with Council determining whether to proceed with the project after receiving a report and recommendation from the City Manager and the City's Financial Officer. The DSC has provided the documentation evidencing their financial ability to fund at least $3.6 million of the project cost and the City Manager and the City's Financial Officer have reported the DSC has the financial ability to t e pro' ct at this level and recommend Council authorize the project to proceed. The Fin ial t en a de Auditors' Report is included (Attachment 2). ATTACHMENTS 1. Operating Agreement. 2. Discovery Center Science Museum, Inc. Financial Statements and Independent Auditors' Report, December 31, 2006 and 2005. 3. Letter of support from the Cultural Resources Board, dated May 31, 2007. ORDINANCE NO. 013, 2008 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CONVEYANCE OF AN OWNERSHIP INTEREST IN THE NEW MUSEUM/DISCOVERY SCIENCE CENTER FACILITY TO THE DISCOVERY SCIENCE CENTER WHEREAS, on November 1, 2005, Fort Collins voters passed Ordinance No. 092, 2005, approving the"Building on Basics"(BOB)tax for certain capital projects(the"BOB Ordinance"); and WHEREAS, the BOB Ordinance included$6,000,000 for construction of a new facility in the downtown area of Fort Collins for the City's Museum and the Discovery Science Center(DSC), and $200,000 per year for seven years of operation and maintenance of the facility; and WHEREAS, pursuant to the BOB Ordinance, the DSC will also contribute no less than $3,600,000 to the construction project; and WHEREAS, City staff and members of the DSC Board of Directors have developed a draft agreement,which the Council has separately approved by the passage of Resolution 2008-008, that will govern the construction, ownership, funding and operation of the new facility(the "Operating Agreement"); and WHEREAS,pursuant to the Operating Agreement,the City will use the BOB and DSC funds to build anew facility to house the Museum and DSC on property owned by the City(the"Facility"), and when the construction project is finished, the City will convey the Facility, which is defined as the land, one or more buildings, and other associated improvements, to the City and the DSC as tenants in common; and WHEREAS, the proposed site for the Facility is a parcel of City-owned land at the east end of Lee Martinez Park, as more particularly described on Exhibit A, attached and incorporated into this Ordinance by reference (the "Property"); and WHEREAS,under Section 23-11 l(a)of the Code of the City of Fort Collins, the Council is authorized to sell,convey or otherwise dispose of any and all interests in real property owned in the name of the City,provided that Council first finds that such disposition is in the best interests of the City; and WHEREAS, the City's conveyance of such interests will serve an important public purpose in that a jointly owned and operated museum facility will be a cost effective way to expand the educational experience of City residents by providing a broader array of scientific, cultural and historical exhibits in a single location, as well as an exciting new City amenity that will help attract visitors to the City, thereby contributing to the economic well-being of the City. NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the Council hereby finds that conveying the Facility, including the Property, to the Discovery Science Center and the City as tenants in common, upon completion of the construction project, is in the best interests of the City. Section 2. That the Mayor is hereby authorized to execute such documents as are necessary to convey the Facility, including the Property, to the City and Discovery Science Center as tenants in common, on terms and conditions consistent with this Ordinance and the Operating Agrement, together with such additional terms and conditions as the City Manager, in consultation with the City Attomey,determines to be necessary and appropriate to protect the interests of the City, including any necessary changes to the legal description of the Property,as long as such changes do not materially increase the size or change the character of the Property. Introduced, considered favorably on first reading, and ordered published this 5th day of February, A.D. 2008, and to be presented for final passage on t th day of February, A . 2008. Mayo ATTEST: City Clerk Passed and adopted on final reading on the 19th day of February, A.D. 2008. Mayor ATTEST: City Clerk