Title
Funding Agreement and Lease Agreement for Phoenix Theatre Company General Obligation Bond Project (Ordinance S-52958) - District 4
Description
Request to authorize the City Manager, or his designee, to negotiate and execute a Funding Agreement between the City and the Phoenix Theatre Company for the completion of the Phoenix Theatre Company Americans with Disability Act (ADA) Accessibility General Obligation Bond Project. Further request authorization for City Manager, or his designee, to negotiate and execute a Lease Agreement for property to be improved as part of the Project. Further request authorization for the City Treasurer to accept funds contributed by the Phoenix Theatre Company for the Project and for the City Controller to disburse all funds related to this item.
Report
Summary
On November 7, 2023, Phoenix voters passed the City Council-approved $500 million General Obligation (GO) Bond Program. Question 3 of the approved GO Bond Program authorized the issuance of $114,385,000 in GO Bonds to provide funding for education, economic development, reduction of waste, resource management, and arts and culture projects.
Pursuant to the terms of an Operating Agreement (City Contract 83853, as amended), the Phoenix Theatre Company operates a theatre on City-owned property located at 1825 N. Central Avenue in Phoenix. As part of the GO Bond Program, the City Council authorized $5,715,352 in GO Bond funding for a project to address urgent accessibility issues and offer ADA accessible office, classroom/studio and rehearsal spaces (the "Project"). As part of its proposal for the Project, Phoenix Theatre Company committed to a contribution of $2,002,487 in cost sharing funds for the Project.
The initial vision for the Project involved construction of a new 13,000 square foot building on City property adjacent to the existing theatre. Phoenix Theatre Company has identified an alternate strategy to accomplish the project goals through leasing and improving existing buildings on a neighboring property. The alternate strategy could offer up to 26,000 square feet of usable space to accomplish the Project's goals.
Staff are seeking Council authorization for the City Manager, or his designee, to negotiate and execute a Funding Agreement between the City and Phoenix Theatre Company that sets out the terms and conditions by which the Project will be completed and funded, either in its initial version or in the alternate version currently being explored. Staff are further seeking Council authorization for the City Manager, or his designee, to negotiate and execute a lease agreement for the neighboring property if the alternate version of the Project proves feasible. Finally, staff are seeking Council authorization for the City Treasurer to accept Phoenix Theatre Company's cost-sharing funds for the Project and for the City Controller to disburse all funds related to this item.
Financial Impact
The City has allocated $5,715,352 in 2023 General Obligation Bond funds to the Project. Funding for this agreement is available in the Office of Arts and Culture's Capital Improvement Program budget utilizing the General Obligation Bond. Should the Parties pursue a lease agreement of the neighboring property as part of the Project, the City's lease shall have a term of no less than 20 years and the City shall not contribute more than the 2023 GO Bond allocation to obtain its leasehold interest utilizing General Obligation Bond funds.
Location
Phoenix Theatre Company - 1825 N. Central Avenue, Phoenix, AZ 85004
Potential Leased Space - 1875 N. Central Avenue, Phoenix, AZ 85004
Council District: 4
Department
Responsible Department
This item is submitted by Deputy City Manager Frank McCune and the Office of Arts and Culture.