10C Action Items 2017 1016 - Laserfiche WebLink

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File Number: 17-560 or a new projector ($90,000) ·New carpets ($70,000) ·Additional surveillance cameras ($15,000) ·Outside terrazzo repair ($10,000) ·Reupholstered seats ($100,000) The estimated costs of the eligible improvements exceed the total amount of the forgivable loan in order to give Curtain Call flexibility to determine which improvements will yield the greatest benefit for the theater. Under the agreement, Curtain Call is required to obtain all applicable permits and approvals for any improvements undertaken. The disbursement of loan proceeds will be structured as a reimbursement (after project completion), although the City will have an option to advance up to 30% of the proceeds prior to the completion of work. The forgivable loan agreement also includes a Joint Use clause requiring the operators to make the BAL Theatre available for City events at least four times per year as long as the agreement is in effect. This clause is part of the forgivable loan because that loan is with the theater operator rather than the property owner. The forgivable loan has a shorter term (three years vs. thirty). Staff recommends that the City Council pursue a longer-term joint use arrangement as part of a later Memorandum of Understanding, as discussed below. Insurance Requirements - Both agreements include detailed insurance requirements that mitigate some risks arising from this public/private partnership. All insurance requirements were reviewed by the City’s Risk Manager and the City’s self-insurance risk pool. At the October 3, 2017 Finance Committee earthquake insurance was discussed. After conducting additional research, staff does not recommend requiring earthquake insurance because: ·The cost is prohibitive. If the theater owners or Curtain Call were required to purchase and maintain this insurance, it would severely compromise the spending power of the $100,000 forgivable loan. ·If the City were to fully or partially fund earthquake insurance, either through direct payment, an extension of the loan term, or a reduction in the interest rate, the cost would be substantial, especially given that the City’s financial interest will be less than half of the total value of the property. ·Deductibles associated with earthquake insurance are extremely high. Even if insurance were in place, it is not a foregone conclusion that it would be practical to pay the deductible in the event of a covered incident. ·The current assessed value of the raw land at this property is $388,000. In a worst case scenario, there is sufficient value in the property, even without the theater building, for the City to recoup the vast majority of its investment. Page 4 City of San Leandro Printed on 10/10/2017 213