June 15, 2004

SUBJECT: Agreement between City of Sunnyvale and Sunnyvale Historical Society and Museum Association for the Design, Development, Operation and Maintenance of a Heritage Museum at Sunnyvale Heritage Center at the Sunnyvale Community Center (04-227)

REPORT IN BRIEF
This report reviews and discusses a proposed agreement between the City and the Sunnyvale Historical Society and Museum Association for a future Heritage Museum at the Community Center’s Sunnyvale Heritage Center. The proposed agreement memorializes previous Council actions supporting the concept of developing a historical museum at this site and spells out the specific duties and obligations of both the City and the Society with regard to design, development, operation and maintenance of the museum. In accordance with Council’s Relationships With Outside Groups Policy (Attachment B), the proposed fifty (50) year agreement would cover all aspects of the City’s relationship with the Sunnyvale Historical Society and Museum Association and replace the City’s previous "co-sponsorship" of the Society.

BACKGROUND
For many years, the Sunnyvale Historical Society and Museum Association (Society) has operated a small museum in a room located within Murphy Park’s multi-purpose building. The Society has always felt this room was too small to operate a first-class museum and has repeatedly approached the City in an attempt to find a larger space. On September 18, 2001, City Council considered a request from the Sunnyvale Historical Society and Museum Association (Society) for a substantial commitment from the City to purchase a proposed "heritage home" and properties located at 161 and 167 North Sunnyvale Avenue for the purpose of developing a historical museum for the City. Council requested further information.

Subsequently, staff and the Historical Society presented to Council their recommendation not to pursue the development of a historical museum at 161 and 167 North Sunnyvale Avenue in a Joint Council Study Session with the Parks and Recreation and Heritage Preservation Commissions on January 16, 2002. Primary concerns revolved around the site’s location and lack of available parking. Instead, Council authorized staff’s recommendation to further study a related option of moving the house from 161 North Sunnyvale Avenue to the Community Center at a location adjacent to the existing Arboretum building (now called Sunnyvale Heritage Center) in Orchard Heritage Park.

The primary motivation throughout the ensuing study was to permanently site a quality local historical museum in Sunnyvale where it would be readily accessible to the community. Council concluded that the City and the Historical Society should partner together in any venture to establish a historical museum, with primary responsibility for developing, operating and maintaining the museum falling to the Historical Society. It was further concluded that siting a historical museum at Orchard Heritage Park adjacent to the Arboretum would provide an accessible and synergistic locale by taking advantage of existing Community Center amenities as well as the Orchard Heritage Park Interpretive Exhibit and heritage orchard.

Two main options for establishing a first-class historical museum at Orchard Heritage Park were explored. The first option was to move the house from 161 North Sunnyvale Avenue to Orchard Heritage Park and to renovate the house to serve as a historical museum. The resulting museum would have the appeal of an historic, older structure. However, no official listing of the property had occurred. Staff believed that a developer would be the most likely purchaser, and that the City could likely successfully negotiate with that eventual purchaser to acquire and re-site the structure at 161 North Sunnyvale, in a move that would benefit both the City and the developer. Moving and re-siting the structure from 161 North Sunnyvale Avenue to the Community Center would require a significant outlay of money, not only to complete the physical move but also to renovate the structure.

The second option would involve building a new structure at Orchard Heritage Park, consistent with the concept of a heritage-based historical center and compatible with the site and existing neighborhood. From an overall cost perspective, this alternative offered great advantages as compared to moving and renovating the structure from 161 N. Sunnyvale Avenue. However, while a new building could be given architectural elements and materials that would suggest an older building, it would obviously not be old, which was part of the great emotional appeal of the alternative of utilizing the structure from 161 N. Sunnyvale. Within each of these options, multiple scenarios were explored.

On May 14, 2002, (RTC 02-151) staff presented a follow-up report to this subject and Council took the following actions:

• Approved Orchard Heritage Park as an appropriate site for a Sunnyvale Historical Museum and incorporated such a facility into current Master Planning efforts.
• Directed staff to work closely with the Sunnyvale Historical Society and Museum Association to develop detailed plans and cost estimates for building a new facility at Orchard Heritage Park to serve as a Sunnyvale Historical Museum.
• Limited the City’s contribution to the museum project to $500,000 and directed staff to apply for Proposition 40 and or Proposition 12 funds to finance the City’s contribution (should such an application fail, the City would contribute via the General Fund).
• Directed staff to replace Council’s "co-sponsorship" of the Sunnyvale Historical Society and Museum Association with a comprehensive agreement with the Society for design, development, operation and maintenance of a Sunnyvale museum (agreement to reflect primary responsibility for operating and maintaining the museum to be that of the Society).

This report (and attached agreement) represents staff’s completion of the Council directive identified in bold above.

EXISTING POLICY
The following policy statements support study of this issue.

DISCUSSION
Staff and the Sunnyvale Historical Society and Museum Association have worked very closely for several months to prepare the attached agreement for Council’s consideration. This collaborative approach has resulted in an agreement, which both staff and the Society endorse and which both parties feel reflects the general direction provided by City Council.

• Incorporates all aspects of the City’s relationship with the Society, replacing the City’s previous "co-sponsorship" of the Society with a comprehensive agreement.

• Calls for a fifty (50) year agreement between the two parties.

• Museum is to be located within that portion of Orchard Heritage Park named by City Council as the "Sunnyvale Heritage Center."

• Total square footage of the two-story building shall not exceed 8,500 square feet; first-story footprint shall not exceed 4,700 square feet.

• Final plans shall have been approved by the Director of Parks and Recreation (conceptually) and by the Department of Community Development (under miscellaneous plan permit).

• Final plans shall bear a resemblance to (but not necessarily replicate) the old Murphy Bayview Ranch house.

• Purpose of the museum shall be to commemorate the history of the City of Sunnyvale and the local region.

• Construction to commence no later than June 30, 2008, with completion no later than June 30, 2010.

• City to waive all fees normally connected with review and processing of such a project.

• Society permitted to install interpretive, informational, and directional signage pertaining to Orchard Heritage Park.

• City to list the Society and the Museum as well as museum's hours of operation, in its Recreation Activity Guides at no cost to the Society.

• No fee to be charged the public for entering the museum (donations requested by Society). Neither party to charge public admission without the consent of the other party, which cannot be unreasonably withheld.

• Museum to be open to the general public a minimum of 3 days per week, 3 hours per day, including at least one weekend day each week. Museum shall close by no later than 10 p.m. each evening unless otherwise permitted by City. Hours of operation to be clearly posted on exterior of museum.

• City to provide Society free use of outdoor areas adjacent to the museum several times each year for the purpose of fund-raising and for educating local elementary school children.

• Society to pay all costs, both capital and operating, with the exception of City’s obligation to pay capital contribution of $500,000. (Please reference Fiscal Impact Section.)

• Upon completion of construction, ownership of the museum shall vest with the City. (Museum contents shall remain the property of the Society.)

• Society to be allowed some storage space at Murphy Park until such time as needed by the City.

FISCAL IMPACT
The approval of the attached agreement (Attachment A) would have minimal fiscal impact. The agreement does memorialize Council’s commitment to make a one-time capital contribution of $500,000 to the Society’s museum project, but this obligation is already incorporated in the City’s ten-year plan. In addition, there are no charges for building permit fees for construction of City facilities on City property; however, if the Society were to construct a similar facility on similar, but private property, the estimated revenue to the City for building permits fees would have been approximately $22,500.

The terms of the attached agreement (consistent with previous Council action) dictate that almost all other costs, both from design to construction to operations and maintenance, be borne by the Society. The Parks and Recreation Commission, however, recommends that the City pay all utility costs associated with the first five (5) years of the museum’s operation, at a maximum amount of $3,500 per year, with the Society assuming all related costs in subsequent years. (Utility costs were estimated by the Society at $4,000 per year and slightly higher by staff, although neither party can estimate with any certainty without the benefit of a specific design.)

The City's Art in Public Places (AIPP) policy will also apply to this project. The Society is hoping a contribution from their existing artwork collection may meet the policy's requirements, but there is ample time to consider this and other options when the project goes through the AIPP process.

PUBLIC CONTACT
Public contact was made through posting of the Parks and Recreation Commission and Council agendas on the City’s official notice bulletin board, posting of the agendas and report on the City’s web page, publication of the Council agenda in the San Jose Mercury News, and the availability of the report in the City Clerk’s office, Library, Parks and Recreation Administration, Community Center, and Senior Center.

Copies of this report have been distributed to the Sunnyvale Historical Society and Museum Association.

1. Council approves the attached Agreement between City of Sunnyvale and Sunnyvale Historical Society and Museum Association for the Design, Development, Operation and Maintenance of a Heritage Museum at Sunnyvale Heritage Center at the Sunnyvale Community Center and authorizes the City Manager to enter into the agreement.
2. Council does not approve the attached Agreement between City of Sunnyvale and Sunnyvale Historical Society and Museum Association for the Design, Development, Operation and Maintenance of a Heritage Museum at Sunnyvale Heritage Center at the Sunnyvale Community Center and does not authorize the City Manager to enter into the agreement.
3. Other option as directed by Council.

RECOMMENDATION
Staff recommends Alternative No. 1.

The Parks and Recreation Commission held a public hearing and reviewed this report on May 26, 2004. The Commission recommends Alternative No. 1 with the following amendment to SECTION 9 (b): "Upon completion of the project and acceptance of it by CITY, the City pay all utility costs associated with the first five (5) years of the museum’s operation, at a maximum amount of $3,500 per year, with the Society assuming all related costs in subsequent years. SOCIETY shall become responsible after 5 years for furnishing all utilities at no cost or expense to CITY. SOCIETY shall be responsible for the cost and expense of cable, computer and/or telephone bills." The Commission felt that upon completion of the museum it would be fair to allow the Society an additional five years to prepare to assume annual utility costs.

Prepared by:
Robert A. Walker
Director, Parks and Recreation

Reviewed by:
Mary J. Bradley
Director, Finance

Reviewed by:
Marvin A. Rose
Director, Public Works

Reviewed by:
Robert Paternoster
Director, Community Development

Approved by:
Amy Chan
City Manager

Attachments

1. Agreement between City of Sunnyvale and Sunnyvale Historical Society and Museum Association for the Design, Development, Operation and Maintenance of a Heritage Museum at Sunnyvale Heritage Center at the Sunnyvale Community Center
2. Council Policy 7.2.6: Relationships with Outside Groups Policy (.pdf format)