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SR 09-10-2019 3K City Council Report City Council Meeting: September 10, 2019 Agenda Item: 3.K 1 of 3 To: Mayor and City Council From: Andy Agle, Director, Housing and Economic Development, Economic Development Division Subject: Approval of Modification to Windward Lease Agreement to allow a Covenant to be recorded on City-Owned Property Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to negotiate and execute a seventh amendment to the Windward School lease agreement to allow a covenant to be recorded on City-owned property and require its removal at the time of lease termination. 2. Authorize the City Manager to sign, on behalf of the City as property owner, the covenant and all related documents. Summary Since 1983, the City has leased 7.26 acres of City-owned property at Sawtelle Boulevard and Palms Boulevard in Los Angeles to Windward School (Windward). The City originally acquired the property in connection with water resources at the site. The lease agreement has been modified multiple times to reflect Windward’s continued development of the site. In July 2018, Windward and the City executed a sixth lease amendment that allowed the school to submit an application to the City of Los Angeles for entitlements to update the original Master Plan approved in 1999. After filing the application, Windward made additional updates to the project plans and project description to recognize increased enrollment and modified phasing of future improvements. The City of Los Angeles requires the City of Santa Monica’s signature, as property owner, on a covenant acknowledging and agreeing with all terms and conditions of the application approval. The recommended lease amendment would authorize the City Manager to sign the covenant and allow the updated project plans and project description to be approved by the City of Los Angele s. 2 of 3 Discussion Windward is a private, college-preparatory school serving grades 7 through 12. Windward’s campus is partially located on the City-owned Charnock Well property, the site of active water wells in the Charnock Groundwater Basin used to support Santa Monica’s water needs. The lease authorizes Windward to use the leasehold for school, recreational, and educational purposes, subject to the primary water use by the City. The lease, which expires on June 30, 2055, includes a shared-use provision with respect to Windward’s recreational facilities and playfields on the leasehold premises and on adjacent property owned by Windward. In 2018, Windward informed the City that the second phase of improvements proposed in the 1999 Master Plan was no longer compatible with the school’s needs and long- term vision. As a result, Windward advised staff of their intention to submit an application to the City of Los Angeles to update the 1999 Master Plan. On July 24, 2018, Council authorized a sixth amendment to the lease to accommodate the changes and modify the provisions of the shared use of school facilities. On August 1, 2018, Windward submitted its Application to the City of Los Angeles modifying the unbuilt second phase of the Master Plan to upgrade and e xpand existing classrooms and educational facilities. After filing its application, Windward engaged in further value engineering, resulting in updated project plans and an updated project description which involved repurposing existing buildings and using modular classrooms until the permanent facilities are constructed. The updates were submitted to the City of Los Angeles in October 2018. Windward also submitted Transportation Demand Management measures to the City of Los Angeles in lieu of phased increases in student enrollment. As a condition of project approval, Windward is required to execute and record a covenant agreeing to comply with all terms and conditions of the project’s approval. As the City of Santa Monica is the fee owner of a portion of the land upon which Windward’s improvements are located, the City is required to sign and execute the covenant (Attachment A) in order to effectuate the City of Los Angeles’ approval. The proposed seventh lease amendment recognizes the City’s execution of the 3 of 3 covenant and reaffirms that none of the campus improvements proposed by Windward will impact, interfere, or adversely affect the water-production facilities that are the City’s primary use for the site. The proposed amendment further memorializes W indward’s commitment that the campus improvements will not impact, interfere , or adversely affect the City’s right to the shared-use facilities pursuant to the lease. Past Council Actions Meeting Date Description 11/14/89 (attachment B) Lease Agreement with Windward to Lease City-owned Property adjacent to the Charnock water-well field. 07/24/18 (attachment C) Sixth Lease Amendment which allowed the City to sign the City of Los Angeles Application for the Master Plan Update Project and allowed for an update to the shared-use-of- facilities provisions. Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Prepared By: Erika Cavicante, Senior Development Analyst Approved Forwarded to Council Attachments: A. Master Covenant with Exhibits B. 1989. 11.14 - Windward Lease Agreement C. 2018 07.24 Windward (Sixth Lease Amendment) D. Windward-City of Santa Monica Water Well Locations E. Windward School Oaks Initiative 2019 City Council Report City Council Meeting: July 24, 2018 Agenda Item: 3.O 1 of 4 To: Mayor and City Council From: Andy Agle, Director, Housing and Economic Development, Economic Development Division Subject: Windward School Lease Amendment Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to negotiate and execute a sixth amendment to the Windward School lease agreement to modify the provisions regarding the shared use of school facilities and, 2. Authorize the City Manager to sign, as Landlord, Windward School’s Master Plan Land Use Application. Summary Since 1983, the City has leased a portion of City-owned property located at Sawtelle Boulevard and Palms Boulevard in Los Angeles to Windward School (Windward). The lease provides for shared use of recreational facilities and playfields. Windward intends to submit a Master Land Use Application (Application) to the City of Los Angeles for entitlements to update its original Master Plan approved in May 1999. Th e update, called the Master Plan Update Project, proposes to eliminate previously approved shared-use recreational facilities for the development of, among other structures, a new performing arts facility (Exhibit A). As a condition of approval, the City of Los Angeles requires the City of Santa Monica’s signature, as landlord, on the Application. The lease amendment would update the shared-use-of-facilities provisions currently in place to reflect the new facilities in the proposed Application. There will be no impact upon Santa Monica’s water operations from the proposed Application or lease amendment. Discussion Windward is a private, college-preparatory school serving grades 7 through 12. 2 of 4 Windward leases approximately seven acres of the City-owned Charnock Well property, the site of active water wells in the Charnock Groundwater Basin used by the City for the community’s water needs. The lease authorizes Windward to use the leasehold for school, recreational, and educational purposes and is subject to the primary water use of the City. The lease includes a shared-use provision with respect to Windward’s recreational facilities and playfields (Shared-Use Facilities) on the leasehold premises and on adjacent property owned by Windward. The Shared -Use Facilities include:  the gymnasium (indoor basketball and volleyball courts), outdoor courts, playfields, weight rooms, locker rooms, and athletic center;  restrooms closest to the recreational facilities and playfields;  parking areas; and,  athletic equipment ancillary to the use of the recreational facilities and playfields. The City is entitled to approximately 50 percent of the useful time of the Shared-Use Facilities on an annual basis, with a minimum average of 31 hours per week. The lease recognizes priority of use for the Shared-Use Facilities, with first priority given to activities, events, and programs operated by Windward for the direct benefit of its students and educational programs, and second priority to the City for its municipal recreational activities and programs, City-sponsored organizations, and permitted organizations. The City uses the facilities for adult basketball leagues and the Santa Monica Adaptive Recreation (SMARS) program, which prepares athletes for the Special Olympics of Southern California. The 1999-approved original Master Plan includes construction of a second gymnasium or aquatics center as a second phase. The lease specifies that upon Windward’s completion of the second phase, such facilities would be included as Shared-Use Facilities, with the minimum hours of use to increase to no less than 46 hours per week calculated on an annual basis. Windward has since re-evaluated its original Master Plan and determined that the planned second phase improvements are no longer compatible with the school’s needs and long-term vision. Windward plans to submit a land use application to the City of Los Angeles modifying the unbuilt second phase of the Master Plan to upgrade and expand existing classrooms and educational facilities and 3 of 4 construct a new performing arts center on its adjacent fee parcel in lieu of the second gymnasium or new aquatics center that was previously proposed. The Master Plan Update Project would also request an increase in Windward’s student enrollment to 625 students, from the 550-student maximum that is currently in place. Windward has requested that the City, as its landlord, sign the Application for the Master Plan Update Project. All proposed construction, construction staging, and utility connection would occur on Windward’s fee parcels and would not encroach on the air space above, nor the ground below, the City’s fee parcels. As the Master Plan Update Project proposes to eliminate the planned second-phase facilities included as Shared-Use Facilities, Windward has agreed to make the school’s multipurpose performance space, conference room, an d classrooms available for shared use with the City (Exhibit B). The proposed alternative facilities, along with the existing Shared-Use Facilities, would be available for use by the City for a set amount of hours per week for each facility. Windward would still be required to provide a minimum of 46 total hours per week of shared access, after construction of the facilities proposed in the Master Plan Update. In order to facilitate Windward’s plans and ensure the public benefit of the Shared-Use Facilities is maintained, staff recommends execution of the Application and a lease amendment to revise the Shared-Use Facilities provision to include the proposed new facilities as part of the shared-use arrangement with the City. Past Council Actions Meeting Date Description 11/14/89 (attachment C) Lease Agreement with Windward to Lease City-owned Property adjacent to the Charnock water well field. 06/28/05 (attachment D) Fourth Lease Amendment to extend lease term and to modify the Shared-Use Facility obligations. 02/24/15 (attachment E) Fifth Lease Amendment for the City’s consent for Windward to file a Zone Variance Plan with the City of Los Angeles. Financial Impacts & Budget Actions There is no immediate financial impact or budget action necessary as a result of the 4 of 4 recommended action. Prepared By: Erika Cavicante, Senior Development Analyst Approved Forwarded to Council Attachments: A. Windward Project Description 7.13.18 B. Shared Use Facilities Availability Chart C. Lease (June 1, 1990, Contract No. 5457 (CCS)) D. 4th - Lease Fourth Amendment Aug 30, 2006 E. 5th - Lease Fifth Amendment Oct 12. 2015 F. Windward School Oaks Initiative Statement 7.13.18 CITY OF SANTA MONICA PUMP STATION CITY OF SANTA MONICA PUMP STATION CITY OF SANTA MONICA PUMP STATION CITY OF SANTA MONICA PUMP STATION CITY OF SANTA MONICA PUMP STATION PHASE I SCOPE OF WORK WELL 20 WELL 19 WELL 13 WELL 16 WELL 18 CITY WELL ACCESS REFERENCE: Agreement No. 10937 (CCS)