1999-0601_BOYS & GIRLS CLUBS OF CAPISTRANO VALLEY_ H2a_Agenda Report AGENDA ITEM
June 1, 1999
TO: George Scarborough, City Manager
FROM: A]King, Jr., Community Services Director
SUBJECT: Consideration of Lease Agreement -- Boys & Girls Club Facility at Community
Center Site (Boys& Girls Club of Capistrano Valley, Inc.)
RECOMMENDATION:
1) Approve the proposed lease agreement with the Boys & Girls Club of Capistrano Valley to
construct and operate a Boys& Girls Club facility at the City's Community Center site;
2) Adopt Resolution providing loan guarantee to American Sterling Bank.
SITUATION:
A. Background:
In August, 1998, the San Juan Capistrano City Council approved a Memorandum of
Understanding between the Boys&Girls Club of Capistrano Valley and the City of San Juan
Capistrano to address important issues associated with the Club's proposal to construct and
operate nearly 11,000 square feet of youth services facility at the San Juan Capistrano
Community Center site.
The adopted MOU incorporated many key issues regarding the Club's development proposal
for the new facility. One of the key issues was a fund-raising level threshold the Club was
required to achieve prior to initiation of lease agreement discussions with the City. This
requirement established that the Club needed to raise the total sum of money equal to one-
third ($600,000) of the cost of constructing the Club's proposed facility. At that time, the
total cost of the project was estimated at $1,800,000.
The Club has raised approximately $300,000 in cash and has significant other pledges from
private donors. In addition, a $500,000 federal government grant has been secured.
Accordingly, Club representatives, City staff, and the City Attorney have proceeded to
develop the attached proposed lease.
To address programmatical and operational issues such as hours of use, shared use of City
facilities, payment of City facility use fees, shared equipment and its usage for the gymnasium,
FOR CIT`(COUNCIL AGE14K
Agenda Item -2- June 1, 1999
and common area maintenance, staff and Club representatives are meeting to develop an
appropriate MOU that will be forwarded to the Parks, Recreation&Equestrian Commission
at their July Commission meeting and then scheduled for City Council consideration in
August 1999.
B. Summary
The proposed lease agreement has been a joint development project between City staff, Boys
& Girls Club representatives and legal counsel representing both entities. Key issues
addressed in the proposed lease include the following:
1) Funding levels and financial resource commitments the Club must secure to legally
activate the lease agreement;
2) Club performance standards;
3) Term of the lease agreement;
4) Site and Club floor plans;
5) A description of proposed Club programming;
6) Default matters;
7) Insurance requirements and indemnification;
8) Construction requirements and time schedule.
C. Overview of the Agreement:
As of this writing, additional changes are still being processed between counsel with respect
to the draft lease. Accordingly, a final draft lease will be submitted under separate cover to
the City Council.
A key provision of the lease agreement stipulates that the Club is to have raised sufficient
funding to finance 100 percent of the estimated construction cost of the project and secure
a legal commitment for a minimum$1 million backup loan from a bona fide commercial bank
lender in order for the lease agreement to be legally effective (see Section 3(a) of the
agreement).
The Club proposes to use American Sterling Bank as their construction lender. The Club
proposes a construction loan of$1.3 million which is to be used as a line of credit should the
Club need funds over and above the federal grant, existing bank deposit funds, and collection
of promised pledges. Sterling Bank has requested that the City take a separate legal action
expressly providing that City will guarantee the construction loan. Accordingly, the
appropriate resolution is attached to the report.
Agenda Item -3- June 1, 1999
If the Club defaults on the loan repayment, the City agrees that in exchange for the City
obtaining title to the building, the City will assume the remaining balance of the loan up to
$1.3 million. (See Section 9(a) of Agreement.) The Boys and Girls Club will construct
11,000 square feet as compared to the 6,000 square feet designed for the youth facility in the
original Community Center master plan. The $1.3 million is $200,000 more than the City's
cost estimate(approximately$1.1 million)to construct the original youth facility. Therefore,
in the unlikely event that the Boys & Girls Club defaults on its loan, the City will obtain a
building to be used as a youth center which is significantly larger than the original facility
design for a proportionately small increase in financial commitment.
The term of the lease agreement shall be for 25 years from the date of its execution, with the
option for renewal of an additional 25 years, providing the Club has complied with all terms
and conditions over the life of the lease. (See Section 4(a) of the agreement).
Construction of the new Club facility is to commence no later than September 1, 1999, and
be completed no later than August 1, 2001 (see Section 2(b) of the agreement).
The agreement also addresses performance and default requirements by establishing a process
which would allow an interim operation of day-to-day activities should the Club default or
breach conditions of the lease or sustain a significant decline of performance below
established standards (see Section 5 of the agreement). These provisions were agreed to in
an earlier memorandum of understanding between the parties.
COMMISSIONBOARD REVIEW, RECOMMENDATION:
The Boys & Girls Club of Capistrano Valley proposal to contruct an 11,000 square-foot youth
services facility at the City's Community Center site has been reviewed by both the Parks, Recreation
&Equestrian Commission and Planning Commission. Both Commissions have supported the Club's
proposal to construct the new Club facility and have recommended its approval to the San Juan
Capistrano City Council. Additionally, the Planning Commission has assisted in determining the
Club's exterior architectural design standards.
The upcoming development of a proposed Memorandum of Understanding to address key operational
and programmatical issues will be forwarded to the Parks, Recreation&Equestrian Commission for
their review and recommendation within the next 60 days prior to being forwarded to the City
Council for formal consideration.
FINANCIAL CONSIDERATIONS:
Funding for the Boys & Girls Club of Capistrano Valley's construction of an 11,000 square-foot
youth services facility will be raised through the Club's capital campaign fund-raising efforts and
secured through the commitment of a$1.3 million construction loan from a commercial bank lender.
Upon achieving their required funding and loan commitments as specified in the lease agreement, the
agreement shall become legally effective.
Agenda Item -4- June 1, 1999
NOTIFICATION:
Jim Williams, Executive Director Ken Friess
Boys & Girls Club of Capistrano Valley, Inc. Boys & Girls Club of Capistrano Valley, Inc.
31371 El Camino Real 31371 El Camino Real
San Juan Capistrano, CA 92675 San Juan Capistrano, CA 92675
Art Birtcher Jim Sieger, Principal
Boys & Girls Club of Capistrano Valley Marco Forster Middle School
31371 El Camino Real 25601 Camino del Avion
San Juan Capistrano, CA 92675 San Juan Capistrano, CA 92675
Tony Brown, President
San Juan Capistrano Community Task Force
31421 La Matanza
San Juan Capistrano, CA 92675
ALTERNATE ACTIONS:
1. Approve the proposed lease agreement for the Boys & Girls Club of Capistrano Valley to
construct and operate a Boys& Girls Club facility at the City's Community Center site with
accompanying Resolution.
2. Continue the item, and request additional information from staff.
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RECOMMENDATION:
1) Approve the proposed lease agreement with the Boys & Girls Club of Capistrano Valley to
construct and operate a Boys & Girls Club facility at the City's Community Center site;
2) Adopt Resolution providing loan guarantee to American Sterling Bank.
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Respectfully submitted,
�ee;�,7-
Al King, Jr.
Community Services Director
Attachments: A. Draft Lease Agreement
B. Location Map
C. Resolution
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Boys & Girls Club of Capistrano Valley
Program Plan
WHAT IS A BOYS & GIRLS CLUB?
The Boys & Girls Club Movement is a nationwide affiliation of local, autonomous
organizations. Boys & Girls Clubs of America is working to help boys and girls of all
backgrounds, with special concern for those from disadvantaged circumstances. We
are a youth guidance organization dedicated to promoting health, social, educational,
vocational, cultural, character and leadership development. We help young people
build self-esteem and develop values and skills during critical periods of growth.
PRINCIPLES THAT ALL BOYS & GIRLS CLUBS PRACTICE
• All boys and girls, aged 6-18 are eligible
• Doors and membership are open to all eligible boys & girls
• No questions of charter, income or sectarian interest bars access
to:
• Full time professional leadership
• Varied and diversified programs
• Building centered activities, and
• Guidance oriented relations and choices
THREE BASIC METHODS OF PROGRAM ORGANIZATION ARE
• By individual assistance
• Through small group interaction, and
• With large, open, drop-in informality.
CORE PROGRAM (OBJECTIVES)
• Character and Leadership Development
• Education and Career Development
• Health and Life Skills
• The Arts
• Sports, Fitness and Recreation
EXHIBIT C
SPECIFIC PROGRAMS OFFERED AT THE CLUB
AFTER SCHOOL PROGRAM
Monday - Friday 2:00pm - 7:00pm
The after school program is where we will serve the most youth. We expect to have a daily
average attendance of 250-300 youth per day. This program will encompass a variety of
programs such as: homework help, arts & crafts, fitness and athletics, social recreation,
leadership clubs, hobby clubs, computers, teen programs, and much more.
Facility Usage: The entire Boys & Girls Club facility, gymnasium, athletic field when
available.
MORNING CAMPS
Monday - Friday 7:00am - 2:00pm
During times when youth are out of school and non-student days we will be open for a
special program called "Morning Camp". Morning Camps are a little more structured than
our regular afternoon program. We have a staff ratio of 1/15, and we will offer more
specialized activities including trips and tours, group projects and many interesting programs.
There will be an additional fee for this program.
Facility Usage: Boys & Girls Club, Gymnasium, and/or fields space when available.
NON-PROGRAM HOURS
In addition to providing daily services for members. The facility will also be used for other
special events such as: youth athletic leagues, teen nights, fundraising events, etc.
BOYS & GIRLS CLUB FIVE CORE
PROGRAMMING AREAS
1. CHARACTER AND LEADERSHIP DEVELOPMENT
Empowers youth to support and influence their Club and community,
sustain meaningful relationships with others, develop positive self-image,
participate in the democratic process and respect their own and others'
cultural identities.
Examples:
a. community service projects
b. trips and tours of historical sites
c. Youth of the Month and Year program
d. public speaking training
2. EDUCATION AND CAREER DEVELOPMENT
Enables youth to become proficient in basic education disciplines,
apply learning to everyday situations and embrace technology to
achieve success in a career.
Examples:
a. homework assistance
b. computer education
c. career exploration
d. job preparation skills (Broader Horizons, One with One)
3. HEALTH AND LIFE SKILLS
Develops young people's capacity to engage in positive behaviors
that nurture their own well-being, set personal goals and live
successfully as self-sufficient adults.
Examples:
a. Goals for Growth ( national program)
b. Health education activities which promote positive health
practices (Smart Moves, Smart Kids, first aid training, Great
America Smoke Out, etc.)
c. lifeskills training
THE ARTS
Enables youth to develop their creativity and cultural awareness
through knowledge and appreciation of the visual arts, crafts,
performing arts and creative writing.
Examples:
a. fine arts program
b. puppetry
c. photography
d. multicultural activities
e. literary arts
f. dance
SPORTS, FITNESS AND RECREATION
Develops fitness, positive use of leisure time, skills for stress
management, appreciation for the environment and social skills.
Examples:
a. wide range of activities conducted each month,
(tournaments, parties, special events, trips, hobby clubs
skill development clinics, etc.)
b. daily instruction in activity skills
c. field trips
d. intramural team sports
e. lifetime sport activities.
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RESOLUTION NO. 99-6-1-6
GUARANTEE OF REPAYMENT OF CONSTRUCTION LOAN - AMERICAN
STERLING BANK (BOYS & GIRLS CLUB OF CAPISTRANO VALLEYI
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO, CALIFORNIA, RELATING TO A CONSTRUCTION LOAN
GUARANTEE FROM AMERICAN STERLING BANK FOR THE BOYS&GIRLS
CLUB OF CAPISTRANO VALLEY FACILITY AT THE COMMUNITY CENTER
SITE
WHEREAS, the Boys & Girls Club of Capistrano Valley (the "Club") has entered
into a lease with the City of San Juan Capistrano providing for the lease of approximately 11,000
square feet of City-owned land to the Club; and,
WHEREAS, the Club will construct on the lease land, a Boys& Girls Club facility
as depicted on the site plan attached to the lease; and,
WHEREAS, the Club will construct the facility with a combination of funding,
including the availability of a line of credit(construction loan) from American Sterling Bank in the
amount of$1,300,000; and,
WHEREAS, the City has agreed in the subject lease to guarantee the repayment of
the construction loan in full in the event of a Club default.
NOW,THEREFORE, BE IT RESOLVED, by the City Council of the City of San
Juan Capistrano that the City of San Juan Capistrano does hereby guarantee the repayment of that
certain construction loan in the amount of up to $1,300,000 to American Sterling Bank in the event
of a default by the Boys & Girls Club of Capistrano Valley,
PASSED, APPROVED, AND ADOPTED this t st day of
June . 1999.
40HNGR1
EINER, MAYOR
ATTEST:
CITY CLERI'
-I-
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF SAN JUAN CAPISTRANO )
I, CHERYL JOHNSON, City Clerk of the City of San Juan Capistrano, California,
DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No.
99-6-1-6 adopted by the City Council of the City of San Juan Capistrano,California,
at a regular meeting thereof held on the 1st day of lune 1999, by the
following vote:
AYES: Council Members Jones, Swerdlin, Campbell and
Mayor Greiner
NOES: None
ABSTAIN: Council Member [fart
ABSENT: None
(SEAL)
1
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CHERYL JO O7 , CITY CLERK
-2-