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HomeMy WebLinkAboutAGENDA REPORT 2020 1118 CCSA REG ITEM 10ECITY OF MOORPARK, 
CALIFORNIA City Council Meeting of November 18, 2020 ACTION Approved Staff Recommendation. (Roll Call Vote: Unanimous) BY B.Garza. E. Consider High Street Arts Center Request to Defer Monthly Rental Payments Due to COVID-19 Pandemic and Theater Closure. Staff Recommendation: Approve a request from the Moorpark Foundation for the Arts to defer rental payments for the duration of the COVID 19 pandemic. (Staff: Troy Brown) (ROLL CALL VOTE REQUIRED) Item: 10.E. MOORPARK CITY COUNCIL AGENDA REPORT TO: Honorable City Council FROM: Troy Brown, City Manager DATE: 11/18/2020 Regular Meeting SUBJECT: Consider High Street Arts Center Request to Defer Monthly Rental Payments Due to COVID-19 Pandemic and Theater Closure BACKGROUND/DISCUSSION The Successor Agency of the Redevelopment Agency of the City of Moorpark (Successor Agency) at its regular meeting on June 6, 2012, authorized the City Manager to sign a three-year operating agreement between the City and the Moorpark Foundation for the Arts (Foundation) for operation of the High Street Arts Center (HSAC). On July 1, 2015, the Successor Agency authorized the transfer of the HSAC to the City of Moorpark, consistent with the approved Long Range Property Management Plan and on July 1, 2015, the City renewed the three-year operating agreement between the City and the Foundation for operation of the HSAC. Section 4 of the Operating Agreement outlines the rental terms for the use of 45 High Street, 33 High Street, 31 Poindexter Avenue, and 61 High Street. It states: The Foundation shall pay City, without abatement, deduction or offset, rent in the amount of one dollar ($ 1.00) per year for use of 45 High Street, 33 High Street and 31 Poindexter Avenue, payable in advance on or before the 1st of July each year of the rental term. For the use of 61 High Street, Foundation shall pay City, without abatement, deduction or offset, rent in the amount of three thousand dollars ($3,000.00) per month through the end of the term of the Agreement as stated in Section 2. On March 13, 2020, the City Manager proclaimed a local emergency within the City of Moorpark on account of the COVID-19 pandemic. On March 17, 2020, the Ventura County Health Officer issued a public health order to close many types of businesses, including bars and nightclubs that do not serve food, movie theatres, live performance venues, bowling alleys, arcades, gyms, fitness centers, aquatic centers, wineries, breweries, and tap rooms. Item: 10.E. 55 Honorable City Council 11/18/2020 Regular Meeting Page 2 On June 17, 2020, the City Council ratified an Executive Order placing a Temporary Moratorium on Evictions for non-payment of rent to those impacted by the COVID-19 crisis. The HSAC sought relief from rent due to the loss in revenue resulting from compliance with a variety of orders that ordered the facility to close. A restructure of rental payments due was granted for a six-month period. Like many businesses, the impacts of the continued shutdown of live theaters has placed a financial strain on the HSAC and caused a cancellation of the remaining 2020 season. In March 2020, the Foundation contacted the City requesting restructuring of rental payments while the theater is shuttered during the pandemic. They requested a deferral of rental payments due under the operating agreement until such time that the emergency order has been lifted. That request was granted with a repayment plan that entailed a one month repayment for each month the rent was deferred. For example, if the theater were to remain closed for three (3) months, rent would not be due during the closure and any past due rent amounts would be due three (3) months later. As the pandemic has lingered without a clear indication of how long the emergency declarations and health orders will exist, continued deferment of rent under that structure becomes infeasible. In October 2020, the Foundation requested the City defer rent payments due under the operating agreement until such time operations resume at the theater. Given the current state of the pandemic and guidelines for reopening provided by the State of California, it is unknown when the operations at the theater will resume. Although minimal operations of the theater could resume under the “Red Tier” in the State’s Roadmap to Recovery, the revenues generated from events at the theater would be outpaced by costs associated with production management, contracting, marketing and management of the theater. Staff is supportive of the request to defer the payments until the emergency orders have been lifted to a level where the theater can be re-opened. Upon re-opening of the facility, staff will meet with the Foundation to negotiate any terms for repayment or forgiveness for any past due rental amounts. FISCAL IMPACT Deferral of rent as outlined in the operating agreement with the Foundation results in a revenue loss of $3,000.00 per month. Should there be funding available through federal, state or local means, the City may be able to recoup losses. If funding is not available, the total loss would be dependent on the total number of months the theater is shuttered. COUNCIL GOAL COMPLIANCE This action does not support a current strategic directive. STAFF RECOMMENDATION (ROLL CALL VOTE REQUIRED) Approve a request from the Moorpark Foundation for the Arts to defer rental payments for the duration of the COVID-19 pandemic. Attachment: Request for deferment of rent payments from High Street Arts Center dated October 22, 2020 56 ATTACHMENT HIGH's)REET A ~ CE f:. October 22 , 2020 TO: Troy Brown , City Manager, City of Moorpark RE : Deferment of Rent Payments-61 High Due to the impacts of COVID-19 , State and county guidelines prevent us from even limited operations . We have closed since the Stay-at-home orders began in March with no income other than from patron donations. We are grateful to the City for the month to month deferral of rent at 61 High St. However, March hopes of a brief closure are now replaced by more realistic estimates of a year or more . Corresponding rent deferments will reach $30 ,000 , $50,000 , or more . This adds more debt to the emergency loans we have already taken on and years of repayment. Given these escalating challenges , we are requesting rent deferment so long as we are barred from operations by pandem ic guidelines . As always, we sincerely appreciate the strong support received from the City of Moorpark! Respectfully , Operated by the Moorpark Foundation for the Arts -a 501 (c) (3) Corporation -FEIN 27-0319993 201 W. Los Angeles Ave ., Suite 289, Moorpark, CA 93021 I Offices-33 East High Street, Ste. 200, Moorpark, CA 93021 57