Letter to the Editor | The proposed PCA lease is flawed

On November 16, 2020, three City Council members voted to approve a 7-year renewal of the City’s lease of 801 Magnolia Ave. to the Piedmont Center for the Arts (PCA), rejecting a motion to allow more public input first.  Because the City Council will have a second vote on the proposed lease, Piedmonters still have an opportunity to express their views by writing to the City Council at citycouncil@piedmont.ca.gov

The threshold question for the City Council is whether to continue PCA control of a City building.  Public comment was split between those appreciating PCA’s role in hosting arts events and those who hoped that 801 Magnolia could become more of a “community center” where arts is one use, but not the only use.  Most Piedmont non-profits rent City or School facilities as needed (e.g., Education Speaker Series, Diversity Film Series, Piedmont Soccer Club); PCA could do the same for its arts events.  The City Manager stated that Rec Dept. programs could fill any unused City space and the PCA space is often unused (even pre-COVID), other than as a quiet space for its commercial sub-tenant. This is not a choice between arts and no arts, but rather how best to maximize community benefit from limited City spaces.

If the City Council decides to renew PCA’s lease, the proposed PCA lease has four major flaws. As a result, it fails to achieve the goals set forth in the City Staff Report.  The lease is at: https://www.ci.piedmont.ca.us/common/pages/DisplayFile.aspx?itemId=17199779

  1. Future City Construction. The proposed lease prevents the City from terminating the lease until January 2024 at the earliest—and then only if the City is conducting significant renovations of the Police, Fire or Recreation buildings.  (See Sections 1.8 & 9.2).  The City, however, plans to seek voter approval of bonds to renovate or rebuild City buildings in Spring 2021.  The City’s building plans might include relocating City staff to 801 Magnolia while construction is ongoing or even a new structure at the 801 Magnolia location.  The City could be ready to begin construction in Summer 2022, but be blocked by the PCA lease, as construction costs increase during the delay.  The simple fix is to amend the lease to allow the City to terminate without cause on 180 days’ notice (note that the City’s lease to the Piedmont Educational Foundation allows termination without cause on 90 days’ notice).
  2. City Use of 801 Magnolia. Because the 801 Magnolia space has been unused much of the time (other than PCA’s sublease to the Piedmont Post), the City seeks the right to hold “City Sponsored Activities” there or to rent it out for “City Private Rental Activities.”  A good idea, but the proposed lease puts unwarranted hurdles in the City’s way.  The proposed lease would allow City-Sponsored Activities, but only (i) with advance notice, (ii) if the City cannot go elsewhere, (iii) if the City mitigates PCA’s concerns about “unreasonable interference” with “Tenant’s use,” and (iv) the City tries to relocate its activity if PCA asks. (Section 4.2(c)).  City Private Rental Activities, allowed only if PCA has nothing planned, face similar restrictions.  (Section 4.2(b)).  The simple fix, consistent with the City’s ownership on behalf of all City residents, is to allow the City to schedule any activity there that is compatible with any arts-related activity previously scheduled by PCA.  At a bare minimum, a City right to terminate without cause on 180 days’ notice will ensure good faith cooperation on both sides.
  3. Revenue for City Expenses.  In 2011, the City gave PCA a no-rent lease because PCA agreed to pay to perform long-deferred maintenance on the building.  In the proposed lease, PCA pays no rent, but is not asked to perform any work.  By contrast, another non-profit, the Piedmont Education Foundation, pays rent of $19,020/year for less nice space inside Veterans Hall.  PCA’s 2019 balance sheet shows over $406,000 in assets and its 2018 and 2019 profit & loss statements shows income exceeding expenses.  After public comment that PCA could afford to pay rent (like most non-profits using City or School facilities), PCA’s Treasurer stated that PCA could “do more,” i.e., pay rent.  The City has stated that it needs revenue to fund maintenance.  Accept PCA’s offer!
  4. Equal Access.  In the past, PCA has turned away those who did not meet its definition of “arts-related.”  The Staff Report says PCA agrees to more diverse programming, but the proposed lease would narrow PCA’s Approved Uses from a “venue for exhibits and performances” to “arts-related” activities only, plus its sub-lease. (Section 1.1).  In theory, the City Private Rental Activities provide another path for residents to rent the 801 Magnolia space, but, as noted above, the City’s rights are restricted.  Even if that is fixed, PCA has the first right to schedule events.  The lease should require PCA to rent space to any Piedmont resident for any event compatible with the space.

I encourage Piedmonters to share their views on the proposed PCA lease (citycouncil@piedmont.ca.gov), as it will determine the use of 801 Magnolia for the next 7 years.


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2 thoughts on “Letter to the Editor | The proposed PCA lease is flawed

  1. For months the public has been asking for a conversation concerning future use of 801 Magnolia. A public conversation is needed to establish what art uses are appropriate beyond those favored by the Art Center Board as we heard of groups being denied access. Some comments suggested this became more prevalent with the sub-tenant moving in December 2017. Additionally, as Rick points out, what needs might the City have for underutilized 801 Magnolia that the existing lease prevented that go beyond Art Center Board favored art rental? I say rental because the growing assets of the Art Center, $409,000 in 2019 and income exceeding expenses, is more indicative of a for profit business.

    Nov 16 we learned that City Staff had been negotiating for an extended period of time unilaterally and opaquely with the Art Center Board. Instead of a transparent public discussion, we learn of the City’s intended single option: a renewal of the Art Center lease and a lease that gives the leaseholder absolute veto power over any City use. The opaque negotiations went forward because City Hall believed it had minimally three Council votes of approval. An obvious question, beyond the Brown Act constraints, is why even hold a hearing if the many comments and letters in opposition would be ignored?

  2. Rick points out 4 flaws in the lease and there are others. But a bigger question is why are we even discussing the lease at this stage – it does not expires until June 2021. Best I can tell, the answer to that question is that the Mayor and City Administrator decided it was in the best interest of the community to renew the lease and therefore this matter had to be agendized before the Mayor leaves office. The next City Council should direct staff to hold public hearing about the use of the building so the lease can be restructured for the betterment of Piedmont.

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