O-2008-3071 purchase of property from La Porte-Bay Area Heritage Society;agreement of lease for twenty year term commencing April 1, 2008

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REQUEST FOR CITY COUNCIL AGENDA ITEM Avvrovriation Agenda Date Requested: March 24 Requested By: Stephen L. Barr urce of Funds: Fund 037 Department: Parks & Recreation Acc't Number: 037.6046.510.6030 Report: _Resolution: _Ordinance:----X- Amount Budgeted: $15,000 Exhibits: Agreement of Purchase Agreement of Lease Heritage Society Notice of Certification Inspector's Report Amount Requested: Budgeted Item: YES X NO SUMMARY & RECOMMENDATION As Council is aware, there has been a request to review and modify the operating agreement between the City of La Porte and the La Porte-Bayshore Heritage Society relating to the Sylvan Beach Depot Museum. At a January workshop meeting, staff presented to Council, two drafts of an agreement with the Heritage Society; one draft in which the Heritage Society retained ownership of the depot and associated buildings and the City leases the land to the Society, and one draft in which the City purchases the Depot and associated buildings and leases them and the land back to the Heritage Society. Staff was directed to: a) present the two drafts to the Heritage Society for their decision on which one they wanted to pursue, and b) to have the City's Building Inspection staff inspect the Depot building, the Original Library building and the Southern Pacific caboose and report their findings. The Heritage Society has held a general membership meeting as well as a Board Meeting to discuss the two versions. It is the consensus of the Heritage Society that they would prefer to sell the buildings to the City of La Porte and enter into an agreement to operate the museum (see attached Agreement of Purchase, Agreement of Lease, and Notice of Certification). The Agreement of Purchase, if approved, would authorize the City to purchase the buildings from the Heritage Society. The Agreement of Lease provides an operational base for the Heritage Society to operate the Depot and associated structures as a museum for the City of La Porte. A summary of the operational structure is as follows o The City to provide for grounds maintenance of the property. o The City to pay for minor and major maintenance costs for both the interior and exterior of the building. o The City to pay for electricity, natural gas, and other utilities for the buildings. o The City to pay for liability and property insurance coverage for the buildings including wind and flood insurance, insurance of contents, and other property (i.e. antique car) owned by the Heritage Society. o The City to pay for janitorial service for the buildings. o The Heritage Society agrees to operate the Depot building, Original Library building, caboose, and any future acquired buildings as museums for the City of La Porte. o The City to provide $5,000 annually to the Heritage Society to fund a docent to organize and catalogue the museum inventory and to open the building to the public for a minimum of 480 hours per calendar year (1 day per week). (First year to be pro-rated). It is estimated that approval of this proposed agreement will result in an expenditure of approximately $350,000 over the twenty year life of the agreement for routine force account labor, materials, and services. A major repair or unforeseen damage could increase that number significantly. The funding for the docent and materials for repair will be provided through Fund 037 (Hotel-Motel Fund), with facility and grounds maintenance labor through the Parks & Recreation Department budget. In anticipation oftffis agreement, the Fund 037 line item budget for FY 2007-2008 included $5,000 to fund the Heritage staff person. Additional Page 1 of 2