HomeMy WebLinkAbout13 - Lecture Hall Building - Amendment to MOU; and Dissolving the Newport Beach Library Lecture Hall Design - CorrespondenceReceived After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Summerhill, Yolanda
To: Jerold Kaooel; Marilyn Krahe; Mireva Llaurado; kevin.barlow(i amail.com
Cc: Blom, Noah; Kleiman, Lauren; Leung, Grace; Webb, Dave (Public Works)
Subject: Lecture Hall Term Sheet [IMAN-CAO.FID285407]
Date: December 07, 2023 8:35:00 AM
Attachments: Lecture Hall MOU Amendment Term Sheet 12.7.23(3245988.1).docx
Good morning,
In preparation for Monday's meeting, attached is the term sheet prepared by the City for purposes
of amending the MOU.
Best,
Yolanda
December 7, 2023
Lecture Hall Proposal
1) The Foundation to place $10,000,000 in escrow account the Friday prior to City Council
meeting where Council considers awarding the construction contract.
2) The Foundation's additional funding obligations of $1.7 million shall be provided to the
City by Foundation within 3 months of construction commencement.
3) Change Orders are within the sole discretion of the City.
4) Remove the NBPL Policy 15 re: priority of use from MOU and designate the Lecture
Hall as a City facility.
5) The Foundation is responsible for the cost of all FF&E.
6) Facility use fees.
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Summerhill, Yolanda
To: kevin.barlowCalamail.com; ikaooel(ftbDlf.foundation; Marilyn Krahe; Mireya Llaurado
Cc: Blom, Noah; Kleiman, Lauren; Webb. Dave (Public Works)
Subject: MOU Third Amendment --Proposed 12.15.23 rev. (3238302.1)(3248242.1).docx [IMAN-CAO.FID285407]
Date: December 15, 2023 11:15:51 AM
Attachments: MOU Third Amendment--Pr000sed 12.15.23 rev. (3238302.1)(3248242.1).docx
Good afternoon,
Thank you for your time on Monday. Attached is the proposed Third Amendment to the MOU based
upon our discussion. We look forward to meeting with your team on Tuesday.
Best,
Yolanda
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH
PUBLIC LIBRARY FOUNDATION RELATED TO FUNDRAISING FOR THE
LECTURE HALL PROJECT
This Third Amendment to Memorandum of Understanding ("Third Amendment")
is entered into as of the day of , 2024 ("Effective Date") by and between
the City of Newport Beach, a California municipal corporation and charter city ("City")
and the Newport Beach Public Library Foundation, a California nonprofit public benefit
corporation ("Foundation"). City and Foundation are at times individually referred to
herein as "Party" and collectively as "Parties."
I_»aINlfklq W
A. The Foundation and City are Parties to that certain Memorandum of
Understanding entered into as of November 30, 2021 which was amended by
First Amendment to Memorandum of Understanding entered into as of
September 12, 2022, and further amended by Second Amendment to
Memorandum of Understanding entered into as of November 15, 2022
(collectively referred to herein as, the "MOU").
B. As contemplated in Section 2.4 of the MOU, the Project was competitively bid
in September 2023 and the Estimated Project Costs based upon the lowest
responsible bid and other expenses already incurred has nearly doubled.
C. To complete the Project, the City's Commitment and Foundation's Commitment
must increase from Six Million Five Hundred Thousand Dollars and 00/100
($6,500,000.00) to Eleven Million Seven Hundred Nineteen Thousand Four
Hundred Sixty -Eight and 00/100 Dollars ($11,719,468.00) respectively.
D. The City has expended approximately Seven Hundred Fifty -Eight Thousand
Seven Hundred Dollars and 00/100 ($758,700.00) on design, environmental
and permitting for the Project. Additionally, to complete the Project, the City
must enter a construction contract without the Foundation's Commitment fully
secured.
E. As a result, the Foundation and City acknowledge and agree to amend the terms
of the MOU to complete the Project, as provided herein, including but not limited
to, designation from the Library Lecture Hall to redesignation as a City facility
and hereinafter referred to as the Lecture Hall ("Lecture Hall") along with
changes to the priority of use.
F. The City and Foundation have conferred as contemplated by the MOU and have
concluded that the Low Bid should be accepted and the MOU should be
amended to (i) increase the Foundation Commitment and City Commitment in
order to fully fund the Project and (ii) reflect the willingness of the City to award
the Construction Contract and proceed with construction of the Project subject
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 1
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
to the Foundation raising additional funds until the Foundation has met its
revised Foundation Commitment and other amendments provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
set forth herein, the City and the Foundation do hereby agree as follows:
Section 1.1.2 shall be amended in its entirety to read as follows:
"2. Furniture, fixtures and equipment ino'i idiRg b it pet which is limited to
chairs, a podiums, audio-visual equipment, tables and physical items identified in the
construction drawings as of the effective date of this Third Amendment ("FF&E")."
2. Section 1.3 of the MOU shall be amended in its entirety to read as follows:
"1.3 Project Costs. The Parties agree that the total Project costs based upon the
Conceptual Design prepared by RCA and approved by the City Council is estimated
to be Twenty -Three Million Four Hundred Thirty -Eight Thousand Nine Hundred
Thirty -Five and 00/100 Dollars ($23,438,935.00) (the "Estimated Project Cost"). The
Estimated Project Cost includes all design related costs, including but not limited to
the costs of Phases I -IV, and all anticipated costs of obtaining permits, construction
of the Project based upon the lowest responsible bid of Nineteen Million Sixty -Eight
Thousand Dollars and 00/100 ($19,068,000.00) (the "Low Bid") received from AMG &
Associates ("Low Bidder"), management of construction, inspections, other soft costs,
FF&E and a contingency of One Million Nine Hundred Six Thousand Eight Hundred
Dollars and 00/100 ($1,906,800.00) representing ten percent (10%) of the Low Bid
for construction of the Project." a low bed from /�
"Low Bidder") te-GGRStrUfG DreieGt ORtheamount of $ (the
asLow a
) and also ORGludes all design related e
ORGluding but net limited to the
/Gosts of Phases 1_IV above and all anticipatedd costs of ehtainiRg permits
IV above,
Gonstn lotion of the Drejente i imanagement of nonstrntion inspections other soft
e e
GOStS FF&E and a o� nting f $ for UnexpeGted additieRalGOStS-,
representing terPer6ent (100 ) of the Lew Rwv Bid. The rPaaftie�Qerst d and agree
that the Estimated PrelefGt (west is ap estimate based i Ipen the hest available
mTuica-�Tv7cccw.T�r�urrc�mTrcrcc�us
i RfOrmatiOR kROWR te the Parties as of the date of this ThiFd AmGRdmeRt and that the
anti gal Dreient nest which is defined as the anti ial nest ef'desigpipg the Dreient
>ebtaiRiRg permits,
e e
ether SEA Gests and
CCQC fer the enStFantien of the e "` (the iDreier+} (the 0°A`G I Dreent rest") may Mani based
but net limited te GhaRgeS te the design ef the ,
unfereseen nenrditiens e unfereseen rdefiniennies in the plans , unavailability of
materials andier innreases ip the nest of materials and/er laher "
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 2
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
3. Section 1.4 is hereby deleted in its entirety.
4. Section 1.5 shall be amended in its entirety to read as follows:
1.5 Change Orders. The City may unilaterally approve of -change orders
thatarerelated to construction issues at the Project that occur during construction and
that the City deems necessary (a "Necessary Change Order"). If any Necessary
Change Order exceeds the Estimated Project Cost, the Parties shall share evenly in
the cost of the Necessary Change Order. If the City or the Foundation desire change
orders to the design of the Library Lecture Hall or FF&E beyond what is identified in
the construction drawings as of the effective date of this Third Amendment (an
"Optional Change Order"), the Party requesting the Optional Change Order eachshall
notify the non -requesting Gfher-Party of such desired change and shall immediately
provide all additional funds necessary to implement the Optional Change Order over
and above the requesting Party's financial commitment set forth in Sections 2.1 and
3.1 respectively." the Pa4mes shall moot and GE)RfeF in rood faith to discuss the
Ordersproposed GhaRge order and the reaSeRS therefor provided the Fneet and GGRfeF PFE)Gess
Rthe aggregate
• re
hr +�,,, ttt�� /� ,
ge—Oi Orders") the Contingency, aRa--Gt mO� �n plus the
GE)RtiRgeRGY plus the amount of the GhaRge Orders ever the GGRtiRgeRGY exGeed
e e e
the Pai4ies shall Fneet as requested by either
5. Section 2.1 shall be amended in its entirety to read as follows:
"2.1 The Foundation Commitment.
use host efforts to --collect donations it
Estimated Project Cost or
Thousand Four Hundred Si
The Foundation expressly agrees that it shall
the amount of fifty percent (50%) of the
Eleven Million Seven Hundred Nineteen
Eight Dollars and 00/100 Dollars ($
($11,719,468.00), whichever is rg eaterless (the "Foundation Commitment") te—pay
toward or the Project.
The Foundation INSERT AMOUNT CURRENTLY RAISED, FUNDS
AVAILABLE AND REMAINING PAYMENT SCHEDULE HERE."
6. Section 2.4 shall be amended in its entirety to read as follows:
"2.4 Bidding; Payment of Donations. The City completed
construction drawings, an-d-obtained required permits tH� for thin Project the City shall
p-ut Ip aced the Project out to bid as a public works projectL. The wit " shall notifiedy the
Foundation of the date, time and place that the bids received for the Project will bewere
opened by the City, invited and representatives of the Foundation shall he invited to
attend the bid opening, notified the Foundation of the City Council study session held
on November 14. 2023. and the January -. 2023. meetina wherein the Citv Council will
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
consider award of the construction contract to the lowest responsible bidder. —_UpGn
M8etiRg shall RGt OGG61F earlier thaR fifteeR (15) days after the FeuRdatieR is giveR SuGh
RGtiGe of the date Of S„Gh Gity GOURGil MeetiRg The Foundation shall place INSERT
AMOUNT and 00/100 Dollars ($ ,000,000.00)-^Re hURdFed PeFGe„t (100 ) of the
Foundation Commitment into an escrow account at First American Title Company in
Santa Ana, CA or other escrow company agreed to between the Parties ("Escrow
Holder") not later than the Friday before said r ity CGURG01 Meet the January , 2023,
City Council meeting so long as the agenda item remains on the City Council's agenda
for such meeting (i.e., the matter has not theretofore been removed from the City
Council's agenda). At such time as the City (i) thereafter demonstrates to the
Foundation that the City has appropriated the City's Commitment set forth in Section
3.1 and (ii) has awarded the contract, finalized negotiations with the contractor and
entered into a construction agreement for the Project wherein the City is legally bound
to pay for and construct the Project (the "Release of Funds Conditions"), the Escrowed
Funds shall be disbursed to the City. Upon the occurrence of the Release of Funds
Conditions, Foundation agrees to promptly execute instructions if requested by Escrow
Holder as a condition to the disbursement of the Escrowed Funds to the City.
Notwithstanding the foregoing, fin the event of the termination or expiration of this
Agreement prior to the City entering into a construction contract for construction of the
Project, the Escrowed Funds minus fifty percent (50%) of the Actual Protect Costs
incurred by the City as of the termination date shall be returned to Foundation. Upon
such termination or expiration of this Agreement, the City agrees to promptly execute
instructions if requested by Escrow Holder as a condition to the disbursement of the
Escrowed Funds to the Foundation. Escrow fees of Escrow Holder shall be paid out
of the Escrowed Funds."
7. Section 2.5 shall be amended in its entirety to read as follows
"2.5 Future Project Enhancements. In the event the Foundation believes
that certain enhancements or upgrades of the Lecture Hall or Bamboo Courtyard would
be worthy of financial support of the Foundation On future yearsfollowing the
Foundation's full payment of the entire Foundation Commitment, the City will work with
the Foundation to implement those enhancements or upgrades desired by the
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 4
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Foundation that are reasonably acceptable to the City provided the Foundation pays
the entire cost of any project enhancement.2
8. Section 3.1 shall be amended in its entirety to read as follows:
"3.1 ThA City's Commitment. The City has earmarked, and through this
Agreement commits to pay up to a maximum of fifty percent (50%) of the Estimated
Project Cost or Eleven Million Seven Hundred Nineteen Thousand Four Hundred
Sixty -Eight and 00/100 Dollars {$($11,719,468.00) `
whichever is less (the "City's Commitment") towards GOsts effor the Project."
9. Section 3.6 shall be amended in its entirety to read as follows:
"3.6 Use of Lecture Hall. The Lecture Hall shall be owned and
controlled by the City. Notwithstanding the foregoing, the Foundation shall have a right
of first refusal to use the Lecture Hall for forty (40) days each fiscal year which may be
exercised by providing the City with one (1) year prior written notice prior to each fiscal
year of the proposed schedule. Any additional days requested by the Foundation will
be evaluated by the City in coordination with all other requested uses and events. The
use of the Lecture Hall shall be subject to user fees in accordance with the cost study
to be prepared on behalf of the City and approved by the City Council. Te the extep+
the City GORtFOIS the use of the Library LeGture Hall, the FeURdatieR shall have the righ
te the use of the Library LeGtWre Hall OR aGGE)FdaRGe with the -Beard ef LibFary Trustees
D Iini 1�IRDI 15 attaGhed Hereto 'v and nT�rnrpvrai�ca r'Te eii. asrExhiih�o". "
10. Section 13.1 shall be amended in its entirety to read as follows
"13.1 Compliance With all Laws. Foundation shall at its own cost and expense
ensure the MOU and any amendments comply with all applicable statutes including,
but not limited to, California Business and Professions Code Section 17510.8 or other
statutes related to charitable contributions, ordinances, regulations and requirements
of all geyernmeRtal eRtitiesfederal, state, county or municipal entities including, but not
limited to any interpretations or approvals by the California Attorney General Charitable
Trust Division, whether, now in force or hereinafter enacted -related to its obligations
under this Agreement_."iRGludiRg federal, state, GO Rty „r mcther, 4
ferGe or hereinafter eRaGted
11. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
12. This Third Amendment may be executed in two (2) or more counterparts, each of
which shall be deemed an original and all of which together shall constitute the same
instrument.
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
ATTEST:
Date:
2024
FOUNDATION:
Newport Beach Public Library
Foundation, a California Nonprofit
Corporation
Date:
Leilani I. Brown Jerold D Kappel
City Clerk Chief Executive Officer
2024
Date: 2024
By:
Marilyn Krahe
Secretary
[END OF SIGNATURES]
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 7
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Webb. Dave (Public Works)
To: Summerhill, Yolanda; kevin.barlow(abamail.com; ikaooel(anbDlf.foundation; Marilyn Krahe; Mireva Llaurado
Cc: Blom, Noah; Kleiman, Lauren
Subject: RE: MOU Third Amendment --Proposed 12.15.23 rev. (3238302.1)(3248242.1).docx [IMAN-CA0.FID285407]
Date: December 15, 2023 12:38:26 PM
Attachments: LLH - Detail Runnina Cost Summary.docx
image001.pnno
Good Afternoon all. Attached is the detailed running project cost summary as requested. Projected
costs are in Bold Text.
Best,
David Webb
Director of Public Works
Public Works Department
100 Civic Center Drive
Newport Beach, CA 92660
Office: 949-644-3311
From: Summerhill, Yolanda <Yuummerhill@newportbeachca.gov>
Sent: December 15, 2023 11:16 AM
To: kevin.barlow@gmail.com; jkappel@nbplf.foundation; Marilyn Krahe <krahe_home@fkaild.com>;
Mireya Llaurado <mllaurado@calljensen.com>
Cc: Blom, Noah <NBlom@newportbeachca.gov>; Kleiman, Lauren <Ikleiman@newportbeachca.gov>;
Webb, Dave (Public Works) <DAWebb@newportbeachca.gov>
Subject: MOU Third Amendment --Proposed 12.15.23 rev. (3238302.1)(3248242.1).docx [IMAN-
CAO.FID285407]
Good afternoon,
Thank you for your time on Monday. Attached is the proposed Third Amendment to the MOU based
upon our discussion. We look forward to meeting with your team on Tuesday.
Best,
Yolanda
Library Lecture Hall Building Budget and Cost Worksheet
ACTUAL
ACTUAL COST
DETAIL
TOTAL
COST
[as of 10123]
TASK DESCRIPTION
COMMENTS
1
CONCEPTUAL DESIGNIPERMITTING RCA
I $ 215,635
Complete
a
Building - Phase 1-2
$ 215,635
2
SOFT COSTS
$ 2,222,500
a
DESIGN RCA
Buildin - Phase
Amend 1- Chan es to Concept
Amend 2 - Si na e
$ 407,035
$ 35,000
$ 9,465
$ 451,500
Complete
b
GEOTECHNICALI
$ 249,000
Ge000n West
Soils Testing, Material Testing,
$ 249,000
de ut 'S eoial Ins eotion, Final Report
$ 445,000
Coffee October 23
o
CONSTRUCTION ADMINISUPPORT
Architect - RCA
$ 1,312,000
_
Construction Manager _�
$ 680,000
_
Griffin - awarded 9?27?22
$ 187,000
Add Service 21 month construction
d
UTILITY COMPANY CONNECTION SERVICES AND FEES
$ 25,000
SCE and SOCAL Gas
$ 25,000
e
CITY OF NEWPORT BEACHIOTHER AGENICIES FEE
$ 25,000
OC Sanitation, Newport -Mesa SID, Green, Seismic Fees
$ 25,000
f_
TESTING
# 75,000
AV and misc.
S 75,000
g
MISCELLEANOUS COSTIFEES
$ 85,000
RCA
Geoteoh Contingency
S 20,000
Otherllnoidentals
$ 65,000
3
HARD COSTS
$ 20,964,900
LLH Project
a
Building
$ 19,059,000
AMG Bid 10112123 w10 Pollution Lib.
b
Contingency (10% bid)
$ 1,905,900
Insurance
4
FIXTURES, FURNISHINGS, & EQUIPMENT (FF&E)
t 75,000
a
FF&E
$ 60,000
b
Computers, Phones, Servers, Scanners, Copiers
t 15,000
PROJECT TOTAL
I* 23,478,035
Delta from $ (10,478,035)
FY23-24 Approved Budget Budget
Contribution $ 6,500,000
FFP $ 6,500,000 Bold indicates estimated costs
Total S 13,000,000
Lars Uoda sod 10-16-23_PTCM1Y...hPfM'.4NPrr�+IAL..+M1Mi.....FR1Yi.i...hlX.If+.4fi C..I..I.P.II..N9Yf RYfILi51LLN M..I.. P.i..1111f if..I..MPl4 M+.I.. P.i..
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
Fmm:
Summerhill Yolanda
To:
Karen Clark
Cc:
]erdd Kaouel: Kevin Badow''Kcahe Home" Min va llaurado
Subject
RE: Meebrg today re: WRte l re Hall [D1ANfAO.FlD2a5901J
Date:
December 19, 20D 10:M:M AM
Thank you Karen. I have forwarded your email to the ad hoc committee and we can discuss at this
afternoon's meeting. Best, Yolanda
From: Karen Clark <karen.h.clark@gmail.com>
Sent: December 19, 2023 9:58 AM
To: Summerhill, Yolanda <YSummerhill@newpord eachca.gov>
Cc: Jerold Kappel <Ikappel@nbplf.foundation>; Kevin Barlow <kevin.barlow@gmaiLcom>;'Krahe
Home' <Krahe_home@fkaild.com>; Mireya Llaurado <mllaurado@calljensen.com>
Subject: Meeting today re: Witte Lecture Hall
Yolanda: Thank you for the revised proposed MOLL Amendment which we
have now had a chance to review.
We note that the proposed Amendment dramatically changes majorterms in the
existing MOU agreement between the City and the Foundation. Based on last
Mondays workgroup meeting, we did not expect such major revisions. The existing
MOU has governed this project for almost two years. It was negotiated in good faith
and has been the basis for the many months of hard work and substantial
expenditures by both parties. As we expect you may have anticipated, it would be
legally and financially impossible for the Foundation to agree to these new and
unexpected terms proposed by the City.
We are sending you a revision to the City's proposed amendment, red -lined (actually
blueTined) to show changes that we propose plus a clean copy.
Please note that all our major donors will have to sign off on this Amendment before
the Foundation is able to sign; this is because the existing MOU is incorporated by
reference into their gift agreements. In fact, the City is a party to all of those gift
agreements concerning naming rights. These gift agreements state that the gifts are
specifically for the "Library Lecture Hall" and even specifically reference sections of
the existing MOU which would be revised under the new Amendment. If these
donors do not agree with these revisions, they will have the right to withdraw their
gift commitments. In addition, the MOU Amendment will require the approval of
the Foundation Board of Directors.
The following is a brief outline of why the Foundation is unable to agree to some of
the Citys proposed revisions. Much of this was discussed at last Monday's
workgroup meeting, and the Foundation previously explained its issues in writing in
response to the City's December 7 term sheet.
Please note:
1. The Foundation's legally established mission is to support the Library. If the
lecture hall is no longer a intended to primarily benefit the library, the Foundation
cannot legally fund it. We believe our proposed Recital F would solve that problem.
2. The ability of the Foundation to use the new hall must be clear and substantial, as
our donors have been assured that the Foundation would have meaningful rights of
use of the building. The Foundation suggests a 50 use commitment and a three
month prior notice to the City of requested usage; any requirement of a longer
notice would not be workable based on our existing scheduling practice.
3. The Foundation's legal and fiduciary obligations will not permit an agreement to
provide uncapped and undefined obligations to fund the building, including funding
any portion of Change Orders in excess of the Foundation Commitment. Nor can it
agree to uncapped and undefined payments for Foundation use of the building.
4. Two previously undiscussed new demands are contained in the City's proposed
MOU amendment: first that the Foundation provide assurance that every obligation
in the agreement complies with all laws, which is essentially a legal opinion which
the Foundation is not qualified to, and cannot, provide; and second an agreement
to pay half of all City expenses related to this project if the construction contracts are
not signed. These two additions are not acceptable and agreeing to either would
likely violate the Foundation's legal and fiduciary obligations.
We look forward to discussing these issues with you and the City representatives
today with the goal to reach agreement that will confirm the City Council's decision
to move forward with this signficant project - one that benefits the City and its
citizens and enjoys so much support from the community.
Kevin Barlow, Chair, Newport Beach Public Library Foundation
Karen Heath Clark, Immediate Past Chair, Newport Beach Public Library Foundation
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Karen Clark
To: Summerhill, Yolanda
Cc: Jerold Kaooel; Kevin Barlow; "Krahe Home"; Mireya Llaurado
Subject: Meeting today re: Witte Lecture Hall
Date: December 19, 2023 9:58:54 AM
Attachments: MOU Third Amendment --Foundation revisions. clean.docx
MOU Third Amendment --Foundation revisions, redlined as of December 18. 2023.docx
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
content is safe.
Yolanda: Thank you for the revised proposed MOU Amendment which we
have now had a chance to review.
We note that the proposed Amendment dramatically changes major terms in the
existing MOU agreement between the City and the Foundation. Based on last
Monday's workgroup meeting, we did not expect such major revisions. The
existing MOU has governed this project for almost two years. It was negotiated
in good faith and has been the basis for the many months of hard work and
substantial expenditures by both parties. As we expect you may have
anticipated, it would be legally and financially impossible for the Foundation to
agree to these new and unexpected terms proposed by the City.
We are sending you a revision to the City's proposed amendment, red -lined
(actually blue -lined) to show changes that we propose plus a clean copy.
Please note that all our major donors will have to sign off on this Amendment
before the Foundation is able to sign; this is because the existing MOU is
incorporated by reference into their gift agreements. In fact, the City is a party
to all of those gift agreements concerning naming rights. These gift agreements
state that the gifts are specifically for the "Library Lecture Hall" and even
specifically reference sections of the existing MOU which would be revised
under the new Amendment. If these donors do not agree with these revisions,
they will have the right to withdraw their gift commitments. In addition, the
MOU Amendment will require the approval of the Foundation Board of
Directors.
The following is a brief outline of why the Foundation is unable to agree to
some of the City's proposed revisions. Much of this was discussed at last
Monday's workgroup meeting, and the Foundation previously explained its
issues in writing in response to the City's December 7 term sheet.
Please note:
1. The Foundation's legally established mission is to support the Library. If
the lecture hall is no longer a intended to primarily benefit the library, the
Foundation cannot legally fund it. We believe our proposed Recital F would
solve that problem.
2. The ability of the Foundation to use the new hall must be clear and
substantial, as our donors have been assured that the Foundation would have
meaningful rights of use of the building. The Foundation suggests a 50 use
commitment and a three month prior notice to the City of requested usage; any
requirement of a longer notice would not be workable based on our existing
scheduling practice.
3. The Foundation's legal and fiduciary obligations will not permit an
agreement to provide uncapped and undefined obligations to fund the building,
including funding any portion of Change Orders in excess of the Foundation
Commitment. Nor can it agree to uncapped and undefined payments for
Foundation use of the building.
4. Two previously undiscussed new demands are contained in the City's
proposed MOU amendment: first that the Foundation provide assurance that
every obligation in the agreement complies with all laws, which is essentially a
legal opinion which the Foundation is not qualified to, and cannot, provide;
and second an agreement to pay half of all City expenses related to this project
if the construction contracts are not signed. These two additions are not
acceptable and agreeing to either would likely violate the Foundation's legal and
fiduciary obligations.
We look forward to discussing these issues with you and the City
representatives today with the goal to reach agreement that will confirm the
City Council's decision to move forward with this signficant project - one that
benefits the City and its citizens and enjoys so much support from the
community.
Kevin Barlow, Chair, Newport Beach Public Library Foundation
Karen Heath Clark, Immediate Past Chair, Newport Beach Public Library
Foundation
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH
PUBLIC LIBRARY FOUNDATION RELATED TO FUNDRAISING FOR THE
LECTURE HALL PROJECT
This Third Amendment to Memorandum of Understanding ("Third Amendment")
is entered into as of the day of , 2024 ("Effective Date") by and between
the City of Newport Beach, a California municipal corporation and charter city ("City")
and the Newport Beach Public Library Foundation, a California nonprofit public benefit
corporation ("Foundation"). City and Foundation are at times individually referred to
herein as "Party" and collectively as "Parties."
I_»aINlfklq W
A. The Foundation and City are Parties to that certain Memorandum of
Understanding entered into as of November 30, 2021 which was amended by
First Amendment to Memorandum of Understanding entered into as of
September 12, 2022, and further amended by Second Amendment to
Memorandum of Understanding entered into as of November 15, 2022
(collectively referred to herein as, the "MOU").
B. As contemplated in Section 2.4 of the MOU, the Project was competitively bid
in September 202 3 based upon construction drawings prepared by RCA (the
"Construction Drawings") and the Estimated Project Costs based upon the
lowest responsible bid and other expenses already incurred has nearly doubled.
C. To complete the Project, the City's Commitment and Foundation's Commitment
must increase from Six Million Five Hundred Thousand Dollars and 00/100
($6,500,000.00) to Eleven Million Seven Hundred Nineteen Thousand Four
Hundred Sixty -Eight and 00/100 Dollars ($11,719,468.00) respectively.
D. The City has expended approximately Seven Hundred Fifty -Eight Thousand
Seven Hundred Dollars and 00/100 ($758,700.00) on design, environmental
and permitting for the Project. Additionally, to complete the Project, the City
must enter a construction contract without the Foundation's Commitment fully
secured.
E. As a result, the Foundation and City acknowledge and agree to amend the
terms of the MOU to complete the Project, as provided herein.
F. In addition, the parties desire to reconfirm that the Library Lecture Hall will be a
City owned facility and that it will host a variety of other users in addition to the
Foundation programming and the Newport Beach Public Library ("Library") and
therefore it will hereinafter be referred to as the Lecture Hall ("Lecture Hall").
The Foundation further confirms that the priority of users of the Lecture Hall,
other than uses by the Foundation, is not a matter over which the Foundation
will have any control. Both parties also acknowledge and confirm that they have
agreed that, regardless of its name, the Lecture Hall is being constructed
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 1
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
primarily for the benefit of the Library and Library uses, including Foundation
use, notwithstanding its secondary use by outside parties not related to the
Library. The parties acknowledge that the Foundation has solicited funds from
donors on the basis of this understanding between the City and the Foundation.
G. The City and Foundation have conferred as contemplated by the MOU and have
concluded that the Low Bid should be accepted and the MOU should be
amended to (i) increase the Foundation Commitment and City Commitment in
order to fully fund the Project and (ii) reflect the willingness of the City to award
the Construction Contract and proceed with construction of the Project subject
to the Foundation raising additional funds until the Foundation has met its
revised Foundation Commitment and other amendments provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
set forth herein, the City and the Foundation do hereby agree as follows:
1. Section 1.1.2 shall be amended in its entirety to read as follows:
"2. Furniture, fixtures and equipment, such as chairs, a podium, audio-
visual equipment, and other physical items identified in the Construction Drawings
("FF&E")."
2. Section 1.3 of the MOU shall be amended in its entirety to read as follows:
"1.3 Project Costs. The Parties agree that the total Project costs based upon
the Conceptual Design prepared by RCA and approved by the City Council is
estimated to be Twenty -Three Million Four Hundred Thirty -Eight Thousand Nine
Hundred Thirty -Five and 00/100 Dollars ($23,438,935.00) (the "Estimated Project
Cost"). The Estimated Project Cost includes all design related costs, including but not
limited to the costs of Phases I -IV, and all anticipated costs of obtaining permits,
construction of the Project based upon the lowest responsible bid of Nineteen Million
Sixty -Eight Thousand Dollars and 00/100 ($19,068,000.00) (the "Low Bid") received
from AMG & Associates ("Low Bidder"), management of construction, inspections,
other soft costs, FF&E and a contingency of One Million Nine Hundred Six Thousand
Eight Hundred Dollars and 00/100 ($1,906,800.00) representing ten percent (10%) of
the Low Bid for construction of the Project."
3. Section 1.4 is hereby deleted in its entirety.
4. Section 1.5 shall be amended in its entirety to read as follows:
"1.5 Change Orders. The City may unilaterally approve change orders
related to construction issues at the Project that occur during construction and that the
City deems necessary to complete the Lecture Hall (a "Change Order") so long as the
increased cost of the Change Order does not exceed the Estimated Project Costs. If
the City or the Foundation desire change orders to the design of the Lecture Hall or
FF&E beyond what is identified in the Construction Drawings as of the effective date
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 2
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
of this Third Amendment and which would create a cost in excess of the Estimated
Project Cost, the Party requesting the Change Order shall notify the non -requesting
Party of such desired change and shall immediately provide all additional funds
necessary to implement the Change Order over and above the requesting Party's
financial commitment set forth in Sections 2.1 and 3.1 respectively."
5. Section 2.1 shall be amended in its entirety to read as follows:
"2.1 The Foundation Commitment. The Foundation expressly agrees that it shall
use best efforts to collect donations in the amount of fifty percent (50%) of the
Estimated Project Cost or Eleven Million Seven Hundred Nineteen Thousand Four
Hundred Sixty -Eight Dollars and 00/100 Dollars ($11,719,468.00), whichever is less
(the "Foundation Commitment") for the Project.
The Foundation has currently raised in cash the sum of $2,964,293.34 and
has been pledged an additional sum of $4,275,000.00 in irrevocable gift agreements
"Pledges"). The remainder of the Foundation Commitment shall be paid to the City
by cash within ten (10) business days of receipt by the Foundation. The Foundation
agrees that it shall take appropriate legal action to collect all outstanding Pledges.
6. Section 2.4 shall be amended in its entirety to read as follows:
"2.4 Bidding; Payment of Donations. The City completed construction
drawings, obtained required permits, placed the Project out to bid as a public works
project, notified the Foundation of the date, time and place that the bids received for
the Project were opened by the City, invited representatives of the Foundation to attend
the bid opening, notified the Foundation of the City Council study session held on
November 14, 2023, and the January , 2023, meeting wherein the City Council will
consider award of the construction contract to the lowest responsible bidder. The
Foundation shall place the amount of current cash donations ("Escrowed Funds") the
Foundation Commitment into an escrow account at First American Title Company in
Santa Ana, CA or other escrow company agreed to between the Parties ("Escrow
Holder") not later than the Friday before the January , 2023, City Council meeting so
long as the agenda item remains on the City Council's agenda for such meeting (i.e.,
the matter has not theretofore been removed from the City Council's agenda). At such
time as the City (i) thereafter demonstrates to the Foundation that the City has
appropriated the City's Commitment set forth in Section 3.1 and (ii) has awarded the
contract, finalized negotiations with the contractor and entered into a construction
agreement for the Project wherein the City is legally bound to pay for and construct the
Project (the "Release of Funds Conditions"), the Escrowed Funds shall be disbursed
to the City. Upon the occurrence of the Release of Funds Conditions, Foundation
agrees to promptly execute instructions if requested by Escrow Holder as a condition
to the disbursement of the Escrowed Funds to the City.
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 3
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
In the event of the termination or expiration of this Agreement prior to the City entering
into a construction contract for construction of the Project, the Escrowed Funds and
assigned pledges shall be returned to Foundation without offset or deduction. Upon
such termination or expiration of this Agreement, the City agrees to promptly execute
instructions if requested by Escrow Holder as a condition to the disbursement of the
Escrowed Funds to the Foundation. Escrow fees of Escrow Holder shall be paid out
of the Escrowed Funds."
7. Section 2.5 shall be amended in its entirety to read as follows:
"2.5 Future Project Enhancements. In the event the Foundation believes that
certain enhancements or upgrades of the Lecture Hall or Bamboo Courtyard would be
worthy of financial support of the Foundation following the Foundation's full payment
of the entire Foundation Commitment, the City will work with the Foundation to
implement those enhancements or upgrades desired by the Foundation that are
reasonably acceptable to the City provided the Foundation pays the entire cost of any
project enhancement."
8. Section 3.1 shall be amended in its entirety to read as follows:
"3.1 City's Commitment. The City has earmarked, and through this Agreement
commits to pay up to a maximum of fifty percent (50%) of the Estimated Project Cost
or Eleven Million Seven Hundred Nineteen Thousand Four Hundred Sixty -Eight and
00/100 Dollars ($11,719,468.00) whichever is less (the "City's Commitment") for the
Project."
9. Section 3.6 shall be amended in its entirety to read as follows:
"3.6 Use of Lecture Hall. The Lecture Hall shall be owned and controlled by
the City. Notwithstanding the foregoing, the Foundation shall have a right of first use
of the Lecture Hall for fifty (50) days each fiscal year which may be exercised by
providing the City with not less than three (3) months written notice prior to the date of
the requested usage. The Foundation will use its best efforts to notify the City of
requested usage dates as early as possible, and in any event within ten (10) business
days of confirming any such dates with the applicable provider. Any additional days
requested by the Foundation will be evaluated by the City in coordination with all other
requested uses and events. The use of the Lecture Hall shall be subject to user fees
in accordance with a cost study to be prepared periodically on behalf of the City and
approved by the City Council. There shall be no amounts charged to the Foundation
for use of the Lecture Hall in recognition of the payment of the Foundation Commitment
other than reasonable costs incurred by specific individual uses of the Lecture Hall by
the Foundation.
10. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 4
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
11. This Third Amendment may be executed in two (2) or more counterparts, each of
which shall be deemed an original and all of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
ATTEST:
Date: 2024
By:
FOUNDATION:
Newport Beach Public Library
Foundation, a California Nonprofit
Corporation
Date: 2024
By:
Leilani I. Brown Jerold D Kappel
City Clerk Chief Executive Officer
Date: 2024
By:
Marilyn Krahe
Secretary
[END OF SIGNATURES]
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 5
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH
PUBLIC LIBRARY FOUNDATION RELATED TO FUNDRAISING FOR THE
LECTURE HALL PROJECT
This Third Amendment to Memorandum of Understanding ("Third Amendment")
is entered into as of the day of , 2024 ("Effective Date") by and between
the City of Newport Beach, a California municipal corporation and charter city ("City")
and the Newport Beach Public Library Foundation, a California nonprofit public benefit
corporation ("Foundation"). City and Foundation are at times individually referred to
herein as "Party" and collectively as "Parties."
I_»aINlfklq W
A. The Foundation and City are Parties to that certain Memorandum of
Understanding entered into as of November 30, 2021 which was amended by
First Amendment to Memorandum of Understanding entered into as of
September 12, 2022, and further amended by Second Amendment to
Memorandum of Understanding entered into as of November 15, 2022
(collectively referred to herein as, the "MOU").
B. As contemplated in Section 2.4 of the MOU, the Project was competitively bid
in September 202_3 based upon construction drawings prepared by RCA (the
"Construction Drawings") and the Estimated Project Costs based upon the
lowest responsible bid and other expenses already incurred has nearly doubled.
C. To complete the Project, the City's Commitment and Foundation's Commitment
must increase from Six Million Five Hundred Thousand Dollars and 00/100
($6,500,000.00) to Eleven Million Seven Hundred Nineteen Thousand Four
Hundred Sixty -Eight and 00/100 Dollars ($11,719,468.00) respectively.
D. The City has expended approximately Seven Hundred Fifty -Eight Thousand
Seven Hundred Dollars and 00/100 ($758,700.00) on design, environmental
and permitting for the Project. Additionally, to complete the Project, the City
must enter a construction contract without the Foundation's Commitment fully
secured.
E. As a result, the Foundation and City acknowledge and agree to amend the
terms of the MOU to complete the Project, as provided herein.
9-. ;In addition, the parties desire to reconfirm that the-i
designation from the Library Lecture Hall will be a City owned facility and that
it will host a variety of other users in addition to the Foundation programming
and the Newport Beach Public Library ("Library") and therefore itto
re designation as a remit„ facility aRC will hereinafter be referred to as the Lecture
Hall ("Lecture Hall"). The Foundation further confirms that- the priority of users
of the Lecture Hall, other than uses by the Foundation, is not a matter over
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 1
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
which the Foundation will have any controlleng with nhanges to the prierity of
use. Both parties also acknowledge and confirm that they have agreed that,
regardless of its name, the Lecture Hall is being constructed primarily for the
benefit of the Library and Library uses, including Foundation use,
notwithstanding its secondary use by outside parties not related to the Library.
The parties acknowledge that the Foundation has solicited funds from donors
on the basis of this understandina between the Citv and the Foundation.
G. The City and Foundation have conferred as contemplated by the MOU and have
concluded that the Low Bid should be accepted and the MOU should be
amended to (i) increase the Foundation Commitment and City Commitment in
order to fully fund the Project and (ii) reflect the willingness of the City to award
the Construction Contract and proceed with construction of the Project subject
to the Foundation raising additional funds until the Foundation has met its
revised Foundation Commitment and other amendments provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
set forth herein, the City and the Foundation do hereby agree as follows:
1. Section 1.1.2 shall be amended in its entirety to read as follows:
"2. Furniture, fixtures and equipment, such as `"'hiGh is limited to chairs, a
podium, audio-visual equipment, and other physical items identified in the
Construction D rawings as of the offontiye dote of this Third AmeRdmont ("FF&E")."
2. Section 1.3 of the MOU shall be amended in its entirety to read as follows-
" 1. 3 Project Costs. The Parties agree that the total Project costs based upon
the Conceptual Design prepared by RCA and approved by the City Council is
estimated to be Twenty -Three Million Four Hundred Thirty -Eight Thousand Nine
Hundred Thirty -Five and 00/100 Dollars ($23,438,935.00) (the "Estimated Project
Cost"). The Estimated Project Cost includes all design related costs, including but not
limited to the costs of Phases I -IV, and all anticipated costs of obtaining permits,
construction of the Project based upon the lowest responsible bid of Nineteen Million
Sixty -Eight Thousand Dollars and 00/100 ($19,068,000.00) (the "Low Bid") received
from AMG & Associates ("Low Bidder"), management of construction, inspections,
other soft costs, FF&E and a contingency of One Million Nine Hundred Six Thousand
Eight Hundred Dollars and 00/100 ($1,906,800.00) representing ten percent (10%) of
the Low Bid for construction of the Project."
3. Section 1.4 is hereby deleted in its entirety.
4. Section 1.5 shall be amended in its entirety to read as follows:
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 2
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
"1.5 Change Orders. The City may unilaterally approve change orders
related to construction issues at the Project that occur during construction and that the
City deems necessary to complete the Lecture Hall (a "Necessary Change Order") so
long as.. '�ythe increased cost of the Necessary Change Order does not exceeds
the Estimated Project Costs, the Parties shall share eyeRl i in the nest of the NeGessary
Change Order. If the City or the Foundation desire change orders to the design of the
Lecture Hall or FF&E beyond what is identified in the Cconstruction D rawings as of
the effective date of this Third Amendment_ and which would create a cost in excess
of the Estimated Project CostTa;TOn+;en�I rh�n^,� the Party requesting the
(in+Change Order shall notify the non -requesting Party of such desired change
and shall immediately provide all additional funds necessary to implement the OptiGRal
Change Order over and above the requesting Party's financial commitment set forth in
Sections 2.1 and 3.1 respectively."
5. Section 2.1 shall be amended in its entirety to read as follows:
"2.1 The Foundation Commitment. The Foundation expressly agrees that it shall
use best efforts to collect donations in the amount of fifty percent (50%) of the
Estimated Project Cost or Eleven Million Seven Hundred Nineteen Thousand Four
Hundred Sixty -Eight Dollars and 00/100 Dollars ($11,719,468.00), whichever is
lessgfeater (the "Foundation Commitment") for the Project.
The Foundation has currently raised in cash the sum of $2,964,293.34 and
has been pledged an additional sum of $4,275,000.00 in irrevocable gift agreements
"Pledges"). The remainder of the Foundation Commitment shall be paid to the City
by cash within ten (10) business days of receiDt by the Foundation. '"�T
PAYMENT SCHEDULE E HERE. —"The Foundation agrees that it shall take appropriate
legal action to collect all outstanding Pledges.
6. Section 2.4 shall be amended in its entirety to read as follows:
"2.4 Bidding; Payment of Donations. The City completed construction
drawings, obtained required permits, placed the Project out to bid as a public works
project, notified the Foundation of the date, time and place that the bids received for
the Project were opened by the City, invited representatives of the Foundation to attend
the bid opening, notified the Foundation of the City Council study session held on
November 14, 2023, and the January , 2023, meeting wherein the City Council will
consider award of the construction contract to the lowest responsible bidder. The
Foundation shall place the amount of current cash donations ("Escrowed Funds")
INSERT Annul NT llars ($ nnn nnn 00) f +
„����,��� e,--the Foundation
Commitment into an escrow account at First American Title Company in Santa Ana,
CA or other escrow company agreed to between the Parties ("Escrow Holder") not later
than the Friday before the January , 2023, City Council meeting so long as the agenda
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 3
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
item remains on the City Council's agenda for such meeting (i.e., the matter has not
theretofore been removed from the City Council's agenda). At such time as the City
(i) thereafter demonstrates to the Foundation that the City has appropriated the City's
Commitment set forth in Section 3.1 and (ii) has awarded the contract, finalized
negotiations with the contractor and entered into a construction agreement for the
Project wherein the City is legally bound to pay for and construct the Project (the
"Release of Funds Conditions"), the Escrowed Funds shall be disbursed to the City.
Upon the occurrence of the Release of Funds Conditions, Foundation agrees to
promptly execute instructions if requested by Escrow Holder as a condition to the
disbursement of the Escrowed Funds to the City.
Notwithstanding -the foregeing-,41n the event of the termination or expiration of this
Agreement prior to the City entering into a construction contract for construction of the
Project, the Escrowed Funds and assigned pledges c mini is fifty PerGeRt (50 ) of the
AGtual DrejeGt GeStSOnGU red by the Git„ as the termiRatieR d shall be returned
to Foundation without offset or deduction. Upon such termination or expiration of this
Agreement, the City agrees to promptly execute instructions if requested by Escrow
Holder as a condition to the disbursement of the Escrowed Funds to the Foundation.
Escrow fees of Escrow Holder shall be paid out of the Escrowed Funds."
7. Section 2.5 shall be amended in its entirety to read as follows:
"2.5 Future Project Enhancements. In the event the Foundation believes that
certain enhancements or upgrades of the Lecture Hall or Bamboo Courtyard would be
worthy of financial support of the Foundation following the Foundation's full payment
of the entire Foundation Commitment, the City will work with the Foundation to
implement those enhancements or upgrades desired by the Foundation that are
reasonably acceptable to the City provided the Foundation pays the entire cost of any
project enhancement."
8. Section 3.1 shall be amended in its entirety to read as follows:
"3.1 City's Commitment. The City has earmarked, and through this Agreement
commits to pay up to a maximum of fifty percent (50%) of the Estimated Project Cost
or Eleven Million Seven Hundred Nineteen Thousand Four Hundred Sixty -Eight and
00/100 Dollars ($11,719,468.00) whichever is less (the "City's Commitment") for the
Project."
9. Section 3.6 shall be amended in its entirety to read as follows:
"3.6 Use of Lecture Hall. The Lecture Hall shall be owned and controlled by
the City. Notwithstanding the foregoing, the Foundation shall have a right of first
refusal oo use of the Lecture Hall for fifft (540) days each fiscal year which may be
exercised by providing the City with not less than three (3) monthso^e(t' ear r,ri^r
written notice prior to the date of the requested usageeaGh fiSGal year of the proposed
^hie. The Foundation will use its best efforts to notifv the Citv of reauested usaae
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 4
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
dates as early as possible, and in any event within ten (10) business days of confirming
any such dates with the applicable provider. Any additional days requested by the
Foundation will be evaluated by the City in coordination with all other requested uses
and events. The use of the Lecture Hall shall be subject to user fees in accordance
with a*e cost study to be prepared periodically on behalf of the City and approved by
the City Council._ " There shall be no amounts charged to the Foundation for use of
the Lecture Hall in recognition of the payment of the Foundation Commitment other
than reasonable costs incurred by specific individual uses of the Lecture Hall by the
Foundation.
M Rem
101. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
12. This Third Amendment may be executed in two (2) or more counterparts, each of
which shall be deemed an original and all of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
ATTEST: FOUNDATION:
Date: 2024
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
101. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
12. This Third Amendment may be executed in two (2) or more counterparts, each of
which shall be deemed an original and all of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
ATTEST: FOUNDATION:
Date: 2024
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Newport Beach Public Library
Foundation, a California Nonprofit
Corporation
Date:
By: By:
Leilani I. Brown Jerold D Kappel
City Clerk Chief Executive Officer
Date:
By:
Marilyn Krahe
Secretary
[END OF SIGNATURES]
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
I1lyzl
aim
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Summerhill, Yolanda
To: kevin.barlow(aamail.com; "karen.h.clark(iamail.com"; Marilyn Krahe; Mireva Llaurado; Jerold Kaooel
Cc: Blom, Noah; Kleiman, Lauren; Webb. Dave (Public Works)
Subject: Third Amendment to Lecture Hall MOU [IMAN-CAO.FID285407]
Date: December 21, 2023 12:52:31 PM
Attachments: Third Amendment MOU 12.21.23 clean(3253645.1).docx
Third Amendment MOU 12.21.23 redline(3253642.1).docx
Good afternoon,
Attached are revised redline and clean versions of the Third Amendment to the Lecture Hall MOU
following our meeting Tuesday. Please note that City Hall will be closed next week for the holidays
and will reopen on Tuesday, January 2, 2024. We will be available to answer some questions next
week but given the different travel and holiday plans, we will likely be able to have a meaningful
discussion to tie up loose ends when everyone is back in the office on January 2nd
Wishing you all a very happy holiday!
Best,
Yolanda
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH
PUBLIC LIBRARY FOUNDATION RELATED TO FUNDRAISING FOR THE
LECTURE HALL PROJECT
This Third Amendment to Memorandum of Understanding ("Third Amendment")
is entered into as of the day of , 2024 ("Effective Date") by and between
the City of Newport Beach, a California municipal corporation and charter city ("City")
and the Newport Beach Public Library Foundation, a California nonprofit public benefit
corporation ("Foundation"). City and Foundation are at times individually referred to
herein as "Party" and collectively as "Parties."
I_»aINlfklq W
A. The Foundation and City are Parties to that certain Memorandum of
Understanding entered into as of November 30, 2021, which was amended by
First Amendment to Memorandum of Understanding entered into as of
September 12, 2022, and further amended by Second Amendment to
Memorandum of Understanding entered into as of November 15, 2022,
(collectively referred to herein as, the "MOU").
B. As contemplated in Section 2.4 of the MOU, the Project was competitively bid
in September 2023 based upon construction drawings prepared by RCA (the
"Construction Drawings") and the Estimated Project Costs based upon the
lowest responsible bid and other expenses already incurred has nearly doubled.
C. To complete the Project, the City's Commitment and Foundation's Commitment
must increase from Six Million Five Hundred Thousand Dollars and 00/100
($6,500,000.00) to Eleven Million Seven Hundred Forty -Three Thousand Nine
Hundred Sixty -Eight Dollars and 00/100 ($11,743,968.00) respectively.
D. The City has expended approximately Seven Hundred Fifty -Eight Thousand
Seven Hundred Dollars and 00/100 ($758,700.00) on design, environmental
and permitting for the Project. Additionally, to complete the Project, the City
must enter a construction contract without the Foundation's Commitment fully
secured.
E. As a result, the Foundation and City acknowledge and agree to amend the terms
of the MOU to complete the Project, as provided herein.
F. The Parties desire to reconfirm that the Library Lecture Hall will be a City owned
facility and that it will host a variety of users including the Foundation
programming consistent with the Foundation's mission statement and therefore
it will hereinafter be referred to as the Lecture Hall ("Lecture Hall"). The
Foundation further confirms that the priority of users of the Lecture Hall, other
than uses by the Foundation, is not a matter over which the Foundation will have
any control other than the Foundation's use of the Lecture Hall as provided in
Section 3.6.
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 1
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
G. The City and Foundation have conferred as contemplated by the MOU and have
concluded that the Low Bid should be accepted and the MOU should be
amended to (i) increase the Foundation Commitment and City Commitment in
order to fully fund the Project and (ii) reflect the willingness of the City to award
the Construction Contract and proceed with construction of the Project subject
to the Foundation raising additional funds until the Foundation has met its
revised Foundation Commitment and other amendments provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
set forth herein, the City and the Foundation do hereby agree as follows:
1. Section 1.1.2 shall be amended in its entirety to read as follows:
"2. Furniture, fixtures and equipment which is limited to chairs, a podium,
audio-visual equipment, and physical items identified in the Construction Drawings
("FF&E")."
2. Section 1.3 of the MOU shall be amended in its entirety to read as follows:
"1.3 Project Costs. The Parties agree that the total Project costs based upon
the Conceptual Design prepared by RCA and approved by the City Council is
estimated to be Twenty -Three Million Four Hundred Eighty -Seven Thousand Nine
Hundred Thirty -Five Dollars and 00/100 ($23,487,935.00) (the "Estimated Project
Cost"). The Estimated Project Cost includes all design related costs, including but not
limited to the costs of Phases I -IV, and all anticipated costs of obtaining permits,
construction of the Project based upon the lowest responsible bid of Nineteen Million
Sixty -Eight Thousand Dollars and 00/100 ($19,068,000.00) (the "Low Bid") received
from AMG & Associates ("Low Bidder"), management of construction, inspections,
other soft costs, FF&E and a contingency of One Million Nine Hundred Six Thousand
Eight Hundred Dollars and 00/100 ($1,906,800.00) representing ten percent (10%) of
the Low Bid for construction of the Project."
3. Section 1.4 is hereby deleted in its entirety.
4. Section 1.5 shall be amended in its entirety to read as follows:
"1.5 Change Orders. The City may unilaterally approve change orders
related to construction issues at the Project that occur during construction and that the
City deems necessary (a "Necessary Change Order"). If the City or the Foundation
desire change orders to the design of the Lecture Hall or FF&E beyond what is
identified in the Construction Drawings as of the effective date of this Third Amendment
and which would create a cost in excess of the Estimated Project Cost, the Party
requesting the Change Order shall notify the non -requesting Party of such desired
change and shall provide all additional funds necessary to implement the Change
Order over and above the requesting Party's financial commitment set forth in Sections
2.1 and 3.1 respectively within seven (7) calendar days."
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 2
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
5. Section 2.1 shall be amended in its entirety to read as follows:
"2.1 The Foundation Commitment. The Foundation expressly agrees that it shall
collect donations in the amount of fifty percent (50%) of the Estimated Project Cost or
Eleven Million Seven Hundred Forty -Three Thousand Nine Hundred Sixty -Eight
Dollars and 00/100 ($11,743,968.00), whichever is less (the "Foundation
Commitment") for the Project.
The Foundation shall place Seven Million One Hundred Thousand Dollars and
00/100 in escrow on the date set forth in Section 2.4 below. The remainder of the
Foundation Commitment in the amount of Four Million Six Hundred Forty -Three
Thousand Nine Hundred Sixty -Eight Dollars and 00/100 ($4,643,968.00) ("Remainder
of Foundation Commitment") shall be paid to the City within two (2) years of Effective
Date of this Third Amendment or prior to the City Council adoption of the notice of
completion of construction of the Lecture Hall in accordance with California Civil Code
Section 9200 et seq. ("Remainder of Foundation Commitment Final Payment"),
whichever occurs later. The Foundation agrees that it shall take appropriate legal
action to collect all outstanding Pledges."
6. Section 2.4 shall be amended in its entirety to read as follows:
"2.4 Bidding; Payment of Donations. The City completed construction
drawings, obtained required permits, placed the Project out to bid as a public works
project, notified the Foundation of the date, time and place that the bids received for
the Project were opened by the City, invited representatives of the Foundation to attend
the bid opening, notified the Foundation of the City Council study session held on
November 14, 2023, and the January 9, 2023, meeting wherein the City Council will
consider award of the construction contract to the lowest responsible bidder. The
Foundation shall place Seven Million One Hundred Thousand Dollars and 00/100
("Escrowed Funds") the Foundation Commitment into an escrow account at First
American Title Company in Santa Ana, CA or other escrow company agreed to
between the Parties ("Escrow Holder") not later than the Friday following the January
9, 2023, City Council meeting. At such time as the City (i) thereafter demonstrates to
the Foundation that the City has appropriated the City's Commitment set forth in
Section 3.1 and (ii) has awarded the contract, finalized negotiations with the contractor
and entered into a construction agreement for the Project wherein the City is legally
bound to pay for and construct the Project (the "Release of Funds Conditions"), the
Escrowed Funds shall be disbursed to the City. Upon the occurrence of the Release
of Funds Conditions, Foundation agrees to promptly execute instructions if requested
by Escrow Holder as a condition to the disbursement of the Escrowed Funds to the
City.
Notwithstanding the foregoing, in the event of the termination or expiration of this
Agreement prior to the City entering into a construction contract for construction of the
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 3
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Project, the Escrowed Funds shall be returned to Foundation. Upon such termination
or expiration of this Agreement, the City agrees to promptly execute instructions if
requested by Escrow Holder as a condition to the disbursement of the Escrowed Funds
to the Foundation. Escrow fees of Escrow Holder shall be paid out of the Escrowed
Funds."
7. Section 2.5 shall be amended in its entirety to read as follows:
"2.5 Future Project Enhancements. In the event the Foundation believes that
certain enhancements or upgrades of the Lecture Hall or Bamboo Courtyard would be
worthy of financial support of the Foundation following the Foundation's full payment
of the entire Foundation Commitment, the City will work with the Foundation to
implement those enhancements or upgrades desired by the Foundation that are
reasonably acceptable to the City provided the Foundation pays the entire cost of any
project enhancement."
8. Section 3.1 shall be amended in its entirety to read as follows:
"3.1 City's Commitment. The City has earmarked, and through this Agreement
commits to pay up to a maximum of fifty percent (50%) of the Estimated Project Cost
or Eleven Million Seven Hundred Forty -Three Thousand Five Hundred Sixty -Eight
Dollars and 00/100 ($11,743,968.00) whichever is less (the "City's Commitment") for
the Project."
9. Section 3.6 shall be amended in its entirety to read as follows:
"3.6 Use of Lecture Hall. The Lecture Hall shall be owned and controlled by
the City. Notwithstanding the foregoing, the Foundation shall have a right of first use
of the Lecture Hall not to exceed fifty (50) days each fiscal year which may be exercised
by providing the City with not less than six (6) months prior written notice bi-annually
on July 1 and January 1. Any additional days requested by the Foundation will be
evaluated by the City in coordination with all other requested uses and events. In the
event of default in paying the Remainder of Foundation Commitment Final Payment
by the deadline set forth in Section 2.1, the right of first use provided herein shall be
suspended until the Remainder of Final Payment of Foundation Commitment is paid
in full ("Cure Period"). During the Cure Period, the Foundation's annual endowment
shall be paid to the City towards the Remainder of Final Payment of Foundation
Commitment until the Foundation Commitment is paid in full. The use of the Lecture
Hall shall be subject to user fees in accordance with a cost study to be prepared
periodically on behalf of the City and approved by the City Council."
10. Section 12.3 shall be amended in its entirety to read as follows:
"Other Naming Opportunities. In addition to the naming rights of the Named
Donor, the City agrees that the Foundation may offer naming rights to the Bamboo
Courtyard, the lobby, the green room, audience seats, and a donor wall subject to prior
review and approval of the City Council and execution of a Named Donor Agreement."
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 4
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
11. Section 13.1 shall be amended in its entirety to read as follows:
13.1 Compliance With all Laws. Foundation shall at its own cost and expense
ensure that the Foundation entering into the MOU and any amendments comply with
its obligations under all applicable statutes including, but not limited to, California
Business and Professions Code Section 17510.8 or other statutes related to charitable
contributions, ordinances, regulations and requirements of all federal, state, county or
municipal entities including, but not limited to any interpretations or approvals by the
California Attorney General Charitable Trust Division, whether, now in force or
hereinafter enacted related to its obligations under this Agreement."
12. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
13. This Third Amendment may be executed in two (2) or more counterparts, each of
which shall be deemed an original and all of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
ATTEST: FOUNDATION:
Newport Beach Public Library
Date: 2024 Foundation, a California Nonprofit
Corporation
Date: 2024
By: By:
Leilani I. Brown Jerold D Kappel
City Clerk Chief Executive Officer
Date:
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
K1 . "
5
By:
Marilyn Krahe
Secretary
[END OF SIGNATURES]
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH
PUBLIC LIBRARY FOUNDATION RELATED TO FUNDRAISING FOR THE
LECTURE HALL PROJECT
This Third Amendment to Memorandum of Understanding ("Third Amendment")
is entered into as of the day of , 2024 ("Effective Date") by and between
the City of Newport Beach, a California municipal corporation and charter city ("City")
and the Newport Beach Public Library Foundation, a California nonprofit public benefit
corporation ("Foundation"). City and Foundation are at times individually referred to
herein as "Party" and collectively as "Parties."
I_»aINlfklq W
A. The Foundation and City are Parties to that certain Memorandum of
Understanding entered into as of November 30, 2021, which was amended by
First Amendment to Memorandum of Understanding entered into as of
September 12, 2022, and further amended by Second Amendment to
Memorandum of Understanding entered into as of November 15, 2022z
(collectively referred to herein as, the "MOU").
B. As contemplated in Section 2.4 of the MOU, the Project was competitively bid
in September 202 3 based upon construction drawings prepared by RCA (the
"Construction Drawings") and the Estimated Project Costs based upon the
lowest responsible bid and other expenses already incurred has nearly doubled.
C. To complete the Project, the City's Commitment and Foundation's Commitment
must increase from Six Million Five Hundred Thousand Dollars and 00/100
($6,500,000.00) to Eleven Million Seven Hundred "'o�RForty-Three
Thousand F-e4rNine Hundred Sixty -Eight Dollars and 00/100 Dollars
($11,719,468743,968.00) respectively.
D. The City has expended approximately Seven Hundred Fifty -Eight Thousand
Seven Hundred Dollars and 00/100 ($758,700.00) on design, environmental
and permitting for the Project. Additionally, to complete the Project, the City
must enter a construction contract without the Foundation's Commitment fully
secured.
E. As a result, the Foundation and City acknowledge and agree to amend the terms
of the MOU to complete the Project, as provided herein.
F. in addition th���esThe Parties desire to reconfirm that the Library Lecture
Hall will be a City owned facility and that it will host a variety of other users in
addition t$including the Foundation programming andconsistent with the
Newport Beach P��Library i"LI-b Foundation's mission statement and
therefore it will hereinafter be referred to as the Lecture Hall ("Lecture Hall").
The Foundation further confirms that the priority of users of the Lecture Hall,
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 1
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
other than uses by the Foundation, is not a matter over which the Foundation
WrOMM
other than the Foundation's use of the Lecture Hall as provided in Section 3.6.
G. The City and Foundation have conferred as contemplated by the MOU and have
concluded that the Low Bid should be accepted and the MOU should be
amended to (i) increase the Foundation Commitment and City Commitment in
order to fully fund the Project and (ii) reflect the willingness of the City to award
the Construction Contract and proceed with construction of the Project subject
to the Foundation raising additional funds until the Foundation has met its
revised Foundation Commitment and other amendments provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
set forth herein, the City and the Foundation do hereby agree as follows:
Section 1.1.2 shall be amended in its entirety to read as follows:
"2. Furniture, fixtures and equipment, suG which is limited to chairs, a
podium, audio-visual equipment, and physical items identified in the
Construction Drawings ("FF&E")."
2. Section 1.3 of the MOU shall be amended in its entirety to read as follows-
" 1. 3 Project Costs. The Parties agree that the total Project costs based upon
the Conceptual Design prepared by RCA and approved by the City Council is
estimated to be Twenty -Three Million Four Hundred Thirty ,htEighty-Seven
Thousand Nine Hundred Thirty -Five Dollars and 00/100 Dollars ($23,439487,935.00)
(the "Estimated Project Cost"). The Estimated Project Cost includes all design related
costs, including but not limited to the costs of Phases I -IV, and all anticipated costs of
obtaining permits, construction of the Project based upon the lowest responsible bid of
Nineteen Million Sixty -Eight Thousand Dollars and 00/100 ($19,068,000.00) (the "Low
Bid") received from AMG & Associates ("Low Bidder"), management of construction,
inspections, other soft costs, FF&E and a contingency of One Million Nine Hundred Six
Thousand Eight Hundred Dollars and 00/100 ($1,906,800.00) representing ten percent
(10%) of the Low Bid for construction of the Project."
3. Section 1.4 is hereby deleted in its entirety.
4. Section 1.5 shall be amended in its entirety to read as follows:
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
"1.5 Change Orders. The City may unilaterally approve change orders
related to construction issues at the Project that occur during construction and that the
City deems necessary to ^omnlete the I eGt ire Hall (a "Change (biter") so Inns asthe
0nnreased r+ost of the Change Order does not eVneed the Estimator! Droient (posts (a
"Necessary Change Order"). If the City or the Foundation desire change orders to the
design of the Lecture Hall or FF&E beyond what is identified in the Construction
Drawings as of the effective date of this Third Amendment and which would create a
cost in excess of the Estimated Project Cost, the Party requesting the Change Order
shall notify the non -requesting Party of such desired change and shall immediately
provide all additional funds necessary to implement the Change Order over and above
the requesting Party's financial commitment set forth in Sections 2.1 and 3.1
respectively." within seven (7) calendar days."
5. Section 2.1 shall be amended in its entirety to read as follows:
"2.1 The Foundation Commitment. The Foundation expressly agrees that it shall
use hest efforts to collect donations in the amount of fifty percent (50%) of the
Estimated Project Cost or Eleven Million Seven Hundred NeteenForty-Three
Thousand F-GwNine Hundred Sixty -Eight Dollars and 00/100 Dellars
($11,719,469743,968.00), whichever is less (the "Foundation Commitment") for the
Project.
The Foundation has nurrently raiserlshall place Seven Million One Hundred
Thousand Dollars and 00/100 in Eas_hescrow on the snof $`' 964 293.34-and has
beenedged —an additional su rn of $4 27F 000 00 date set forth in irrrrreVOGahlvTc-Qi#
agreements "Pledges"`.Section 2.4 below. The remainder of the Foundation
Commitment in the amount of Four Million Six Hundred Forty -Three Thousand Nine
Hundred Sixty -Eight Dollars and 00/100 ($4,643,968.00) ("Remainder of Foundation
Commitment") shall be paid to the City by-Ga&%within ten (10) business days. wo 2
years of reEeint by the Foundati„nEffective Date of this Third Amendment or prior to
the City Council adoption of the notice of completion of construction of the Lecture Hall
in accordance with California Civil Code Section 9200 et seg. ("Remainder of
Foundation Commitment Final Payment"), whichever occurs later. The Foundation
agrees that it shall take appropriate legal action to collect all outstanding Pledges ."
6. Section 2.4 shall be amended in its entirety to read as follows:
"2.4 Bidding; Payment of Donations. The City completed construction
drawings, obtained required permits, placed the Project out to bid as a public works
project, notified the Foundation of the date, time and place that the bids received for
the Project were opened by the City, invited representatives of the Foundation to attend
the bid opening, notified the Foundation of the City Council study session held on
November 14, 2023, and the January 9, 2023, meeting wherein the City Council will
consider award of the construction contract to the lowest responsible bidder. The
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 3
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Foundation shall place man eunt of Gurrent Gash denationsSeven Million One
Hundred Thousand Dollars and 00/100 ("Escrowed Funds") the Foundation
Commitment into an escrow account at First American Title Company in Santa Ana,
CA or other escrow company agreed to between the Parties ("Escrow Holder") not later
than the Friday beferefollowing the January 9, 2023, City Council meeting so long
the agenda itern remains on the City CeunGil's agenda fOr SUGh meeting (i.e., the matter
hoc Ret thorotefero boor, removed from the Gity Ge RGil's ageR lo\ _ At such time as
the City (i) thereafter demonstrates to the Foundation that the City has appropriated
the City's Commitment set forth in Section 3.1 and (ii) has awarded the contract,
finalized negotiations with the contractor and entered into a construction agreement for
the Project wherein the City is legally bound to pay for and construct the Project (the
"Release of Funds Conditions"), the Escrowed Funds shall be disbursed to the City.
Upon the occurrence of the Release of Funds Conditions, Foundation agrees to
promptly execute instructions if requested by Escrow Holder as a condition to the
disbursement of the Escrowed Funds to the City.
fRNotwithstanding the foregoing, in the event of the termination or expiration of this
Agreement prior to the City entering into a construction contract for construction of the
Project, the Escrowed Funds and assigned pledges shall be returned to Foundation
without offset „rdodUGti„R. Upon such termination or expiration of this Agreement, the
City agrees to promptly execute instructions if requested by Escrow Holder as a
condition to the disbursement of the Escrowed Funds to the Foundation. Escrow fees
of Escrow Holder shall be paid out of the Escrowed Funds."
7. Section 2.5 shall be amended in its entirety to read as follows:
"2.5 Future Project Enhancements. In the event the Foundation believes that
certain enhancements or upgrades of the Lecture Hall or Bamboo Courtyard would be
worthy of financial support of the Foundation following the Foundation's full payment
of the entire Foundation Commitment, the City will work with the Foundation to
implement those enhancements or upgrades desired by the Foundation that are
reasonably acceptable to the City provided the Foundation pays the entire cost of any
project enhancement."
8. Section 3.1 shall be amended in its entirety to read as follows:
"3.1 City's Commitment. The City has earmarked, and through this Agreement
commits to pay up to a maximum of fifty percent (50%) of the Estimated Project Cost
or Eleven Million Seven Hundred " Ii Forty -Three Thousand Five Hundred
Sixty -Eight Dollars and 00/100 Dollars ($11,719,468743,968.00) whichever is less
(the "City's Commitment") for the Project."
9. Section 3.6 shall be amended in its entirety to read as follows:
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 4
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
"3.6 Use of Lecture Hall. The Lecture Hall shall be owned and controlled by
the City. Notwithstanding the foregoing, the Foundation shall have a right of first use
of the Lecture Hall not to exceed fifty (50) days each fiscal year which may be
exercised by providing the City with not less than three 6) months rp for written
r notice prier the date of the T requested `fie The Foundatinn Willi use its best efforts
to _notify the Git y of requested usage dates as early as nessihlo bi-annually on July 1
and '— "Ily .—It within ten (10) business days Of Genfirming any SUGh dates with
annlinahle nre„i,derJanuary 1. Any additional days requested by the Foundation will be
evaluated by the City in coordination with all other requested uses and events. In the
event of default in paying the Remainder of Foundation Commitment Final Payment
by the deadline set forth in Section 2.1, the right of first use provided herein shall be
suspended until the Remainder of Final Payment of Foundation Commitment is paid
in full ("Cure Period"). During the Cure Period, the Foundation's annual endowment
shall be paid to the City towards the Remainder of Final Payment of Foundation
Commitment until the Foundation Commitment is paid in full. The use of the Lecture
Hall shall be subject to user fees in accordance with a cost study to be prepared
periodically on behalf of the City and approved by the City Council"There shall he
payment Gee R datien Gemmitment other than r�ena�e�SOR�rrrreed by
�i-r�.� crr�v ��urrT
snenifin individual i ices of the I enfi ire Hall by the Fei R datien 1p
4-010. Section 12.3 shall be amended in its entirety to read as follows:
"Other Namina ODDortunities. In addition to the namina riahts of the Named
Donor, the City agrees that the Foundation may offer naming rights to the Bamboo
Courtyard, the lobby, the green room, audience seats, and a donor wall subject to prior
review and aaaroval of the Citv Council and execution of a Named Donor Aareement."
11. Section 13.1 shall be amended in its entiretv to read as follows:
13.1 Compliance With all Laws. Foundation shall at its own cost and expense
ensure that the Foundation entering into the MOU and any amendments comply with
its obligations under all applicable statutes including, but not limited to, California
Business and Professions Code Section 17510.8 or other statutes related to charitable
contributions, ordinances, regulations and requirements of all federal, state, county or
municipal entities including, but not limited to any interpretations or approvals by the
California Attorney General Charitable Trust Division, whether, now in force or
hereinafter enacted related to its obliaations under this Aareement."
12. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
4213. This Third Amendment may be executed in two (2) or more counterparts, each
of which shall be deemed an original and all of which together shall constitute the same
instrument.
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
ATTEST:
Date: 2024
By:
FOUNDATION:
Newport Beach Public Library
Foundation, a California Nonprofit
Corporation
Date: 2024
By:
Leilani I. Brown Jerold D Kappel
City Clerk Chief Executive Officer
Date: 2024
By:
Marilyn Krahe
Secretary
[END OF SIGNATURES]
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 6
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Kevin Barlow
To: Summerhill, Yolanda
Cc: karen.h.clarKbarnail.com; Marilyn Krahe; Mireya Llaurado; Jerold Kaooel; Blom, Noah; Kleiman, Lauren; Webb.
Dave (Public Works)
Subject: Re: Third Amendment to Lecture Hall MOU [IMAN-CAO.FID285407]
Date: December 22, 2023 8:31:50 AM
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
kfe.
Hi Yolanda,
A quick thank you for all your hard work the week before the holidays on this. Overall, it
looks like the discussion items from Tuesday were well represented in the language. Karen
and Mireya are putting together a few comments and we will do our best to have them over
before the weekend.
Thanks,
Kevin.
On Thu, Dec 21, 2023 at 12:52 PM Summerhill, Yolanda
<YSummerhill&newportbeachca.gov> wrote:
Good afternoon,
Attached are revised redline and clean versions of the Third Amendment to the Lecture Hall
MOU following our meeting Tuesday. Please note that City Hall will be closed next week
for the holidays and will reopen on Tuesday, January 2, 2024. We will be available to
answer some questions next week but given the different travel and holiday plans, we will
likely be able to have a meaningful discussion to tie up loose ends when everyone is back in
the office on January 2nd
Wishing you all a very happy holiday!
Best,
Yolanda
Kevin Barlow
Kevin.Barlowna. email. com
(415) 235 8141
From: Jerold Kappel <Jkappel@nbplf.foundation>
Sent: December 24, 2023 10:54 AM
To: Kevin Barlow <kevin.barlow@gmail.com>; karen.h.clark@gmail.com
Cc: Summerhill, Yolanda <YSummerhill@newportbeachca.gov>; Krahe Home
<Krahe_home@fkaild.com>; Mireya Llaurado <mllaurado@calljensen.com>
Subject: RE: Third Amendment to MOU
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
;ontent is safe.
0000116
Yes, that was my estimation.
Jerold D Kappel, CEO
Newport Beach Public Library Foundation
1000 Avocado Ave
Newport Beach, CA 92660
949-717-3890
From: Kevin Barlow <kevin.barlow(@gmail.com>
Sent: Sunday, December 24, 2023 10:42 AM
To: karen.h.clark(@gmail.com
Cc: Summerhill, Yolanda <YSummerhill(@newportbeachca.gov>; Jerold Kappel
<JkappelCcDnbplf.foundation>; Krahe Home <Krahe_home(@fkaild.com>; Mireya Llaurado
<mllauradol@calljensen.com>
Subject: Re: Third Amendment to MOU
Hi all,
Here is the wording from our Investment Policy Statement regarding distributions
"The target goal of the Foundation is to distribute up to 5% of the market value of the
Endowment Fund to the Library annually. The market value of the Endowment Fund
shall be determined quarterly. One quarter of the 5% shall then be disbursed in the
quarter."
We can do it annually or quarterly at our discretion.
The value on 11/30 was 3,036,097.08 which means —150k annually.
Thanks,
Kevin
On Fri, Dec 22, 2023 at 3:17 PM Karen Clark <karen.h.clark(@gmail.com> wrote:
Yolanda: Thank you for your new draft. We appreciate how well it
incorporates the understandings reached at our meeting on Tuesday and
the obvious good faith efforts you made to incorporate those agreements.
Based on a quick review of the new amendment by several on our team
(some are simply unable to yet review this document), we have come up
with a few concerns that we want to get to you before EVERYONE has left
town. We are hopeful that these are not going to be big problems. I
can't promise there won't be some additional comments when our entire
team has been able to review the document, but I wanted to get something
to you today, and I hope these will be our only substantive comments.
1. Section 2.3 - It was our understanding that we could have a bit more
wiggle room on the date to deposit the funds into escrow, as we must
wrangle some of our donors who may not move as quickly as we would
like. It would help if we could have 7 business days - that's only two
more business days than the draft currently contemplates.
2. Section 3.6 - We want to make certain that already booked dates could
continue to be held during any Cure Period (which we obviously hope and
believe will not occur).
3. Section 3.6 - We had understood that the agreement reached was that
the Foundation would be required to pay only its "direct" costs for its
use of the Hall. That is not reflected in this draft.
4. Section 3.6 - The wording of the endowment language will need
tweeking and I'm looking to Jerry or Kevin for the wording. My
understanding is that what we can promise to pay is essentially S%
annually of the three year average of the funds in our endowment. I
believe this is what the law states as our fiduciary limitation.
S. Section 13.1- The new language is fine except for the inclusion of
future laws. We can't control changes that might be made by the
legislature or the California Attorney General and, unfortunately, don't
have that crystal ball we all would like.
While we'd love to have a response back quickly, we understand the
limits we all have as to timing. The Foundation team will be available
next week, but we understand that the City will likely be totally shut down.
Thanks again for all your efforts on this.
Karen
Kevin Barlow
Kevin.Barlow(@Rmail.com
(415) 235 8141
Received Aker Agenda Printed
January 9, 2024
Agenda Item No. 13
Fum: Summerhill Yolanda
To: JeMd K Pwl: Ke in BaHm Urm.h.dar Oail.mm
Cc: Krahe HomeMireya Haurado; Webb. O (Public Wods)
Subject R ThiNA ndmM to MOU[IMlW{ 0=285407]
Mate: January 02, M2411:28:47 M
Good morning,
Thank you for the comments and input. I've incorporated the majority of the revisions below into
the final version that is going out with the agenda packet. Please see the summary below in ALL
CAPS to each proposed change. Please note that I made one additional revision to the Term in
Section 4 so that the MOU terminates upon completion of the project and payment of the
Foundation Commitment.
I hope everyone had a nice holiday! Happy new year.
Best,
Yolanda
From: Jerold Kappel <Ikappel@nbpILfoundation>
Sent: December 24, 2023 10:54 AM
To: Kevin Barlow<kevin.barlow@gmail.com>; karen.h.clark@gmail.com
Cc: Summerhill, Yolanda <YSummerhill@newportbeachca.gov>; Krahe Home
<Krahe_home@fkaild.com>; Mireya Llaurado <mllaurado@calljenseo.com>
Subject: RE: Third Amendment to MOU
Yes, that was my estimation.
Jerold D Kappel, CEO
Newport Beach Public Library Foundation
1000 Avocado Ave
Newport Beach, CA 92660
949-717-3890
From: Kevin Barlow <kevin.barlow(@amail.com>
Sent: Sunday, December 24, 202310:42 AM
To: karen.h.clark(Warnail.com
Cc: Summerhill, Yolanda <YSummerhill(a)newoortbeachca.eov>; Jerold Kappel
<Jkaooel(dnbDlffoundation>; Krahe Home <Krahe home(dlfkaild.com>; Mireya Llaurado
<ml lau rado(dlca I I iensen.com>
Subject: Re: Third Amendment to MOU
Hi all,
Here is the wording from our Investment Policy Statement regarding distributions
"The target goal of the Foundation is to distribute up to 5% of the market value of the
Endowment Fund to the Library annually. The market value of the Endowment Fund
shall be determined quarterly. One quarter of the 5% shall then be disbursed in the
quarter."
We can do it annually or quarterly at our discretion.
The value on 11/30 was 3,036,097.08 which means —1501< annually.
Thanks,
Kevin
On Fri, Dec 22, 2023 at 3:17 PM Karen Clark <karen.h.clarkPgmail.com> wrote:
Yolanda: Thank you for your new draft. We appreciate how well it
incorporates the understandings reached at our meeting on Tuesday and
the obvious good faith efforts you made to incorporate those agreements.
Based on a quick review of the new amendment by several on our team
(some are simply unable to yet review this document), we have come up
with a few concerns that we want to get to you before EVERYONE has left
town. We are hopeful that these are not going to be big problems. I
can't promise there won't be some additional comments when our entire
team has been able to review the document, but I wanted to get something
to you today, and I hope these will be our only substantive comments.
1. Section 2.3 - It was our understanding that we could have a bit more
wiggle room on the date to deposit the funds into escrow, as we must
wrangle some of our donors who may not move as quickly as we would
like. It would help if we could have 7 business days - that's only two
more business days than the draft currently contemplates. INCORPORATED.
2. Section 3.6 - We want to make certain that already booked dates could
continue to be held during any Cure Period (which we obviously hope and
believe will not occur). INCORPORATED.
3. Section 3.6 - We had understood that the agreement reached was that
the Foundation would be required to pay only its "direct" costs for its
use of the Hall. That is not reflected in this draft.
4. Section 3.6 - The wording of the endowment language will need
tweeking and I'm looking to Jerry or Kevin for the wording. My
understanding is that what we can promise to pay is essentially 5%
annually of the three year average of the funds in our endowment. I
believe this is what the law states as our fiduciary limitation. REVISED TO REFLECT THE LANGUAGE
PROVIDED.
5. Section 13.1- The new language is fine except for the inclusion of
future laws. We can't control changes that might be made by the
legislature or the California Attorney General and, unfortunately, don't
have that crystal ball we all would like. REVISED.
While we'd love to have a response back quickly, we understand the
limits we all have as to timing. The Foundation team will be available
next week, but we understand that the City will likely be totally shut down.
Thanks again for all your efforts on this.
Karen
Kevin Barlow
Kevin. Barlow(@gmail.com
(415) 235 8141
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Karen Clark
To: Summerhill, Yolanda
Cc: Jerold Kaaaek Kevin Barlow; Blom, Noah; Kleiman, Lauren
Subject: Witte Hall MOU Amendment
Date: January 04, 2024 3:39:30 PM
Yolanda: Here is a suggestion for defining "direct costs," which is our biggest remaining
issue. This language also helps us tie the Hall more firmly to our mission as set forth in our
Article of Incorporation. I am also sending this email to the members of the City negotiating
committee.
"The Foundation shall be charged no fee for the use of the Hall other than associated "Direct
Costs", which are those that are directly related to the use of the Lecture Hall by the
Foundation, including staffing and necessary AN contractors if required. The Foundation
shall not be charged with indirect costs, namely costs that do not arise directly from the use by
the Foundation of the Hall, or any rental fee."
Frankly, as we expected might occur, there is concern among several of our biggest donors
that the hall tinder this MOU Amendment would no longer be associated with the library.
Their charitable intent is to donate for the benefit of the library. They are also concerned about
possible legal action by donors or the State based on an alleged violation of our Articles of
Incorporation. Thus, we do not yet know if all donors will agree to this change or will,
instead, ask that their contributions be returned.
We are concerned about the Foundation's fliture and the changes that may result from the Hall
being a City rather than a Library Hall. In addition to our over-all concern that our support
arguably may no longer fit into our mission as set forth in our Articles, we expect other
changes. For example, the Foundation may be unable to sponsor opening week events. When
the Central Library opened, the Foundation sponsored a week-long series of special events and
the Foundation has been planning the same for the Hall. However, if the hall is no longer
related to the library, this may not occur. One reason is that we had anticipated offering
sponsorships that would raise considerable finnding for a grand opening, but with no control by
the Foundation or the library over the Hall, and our role being reduced to limited usage and
finding, we would be unable to make promises necessary to attract sponsors. A grand opening
would be a great and joyfirl benefit for the City and the community.
Karen
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Newport Beach Public Library Foundation
To: Kleiman, Lauren
Subject: From the Desk of the CEO
Date: January 04, 2024 4:58:39 PM
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
content is safe.
W1
From the Desk Of
Jerold D Kappel, CEO
Newport Beach Public Library Foundation
An Urgent Request from Kevin Barlow,
Chair of Newport Beach Public Library Foundation
Dear Library Lecture Hall Supporter,
On Tuesday, January 9, at 4:30pm, the City Council meeting will consider the
Third Amendment of the Memorandum of Understanding with the Newport
Beach Public Library Foundation regarding the funding of the Lecture Hall, what
we anticipate is the final vote on the Lecture Hall's construction. We ask that you
please attend.
As you know, the cost of the Hall has increased dramatically over the original City
estimate, increasing the responsibility of the Foundation to raise 50% of the
needed funds to design and construct. Originally, the Hall was estimated to cost
$14 million dollars. After the initial bids and then the rebids, the cost of the Hall
with design, site preparation, and construction is estimated at $23,500,000, an
over 50% increase from the original estimate.
The Foundation has been negotiating with the City on the MOU, which is in the
final stages, and we are hopeful that the MOU will be approved by the City at the
January 9 Council meeting. However, it is critical that the Foundation have
significant Foundation member support at this meeting to show the Council that
the community is very supportive of having a lecture hall, now named Witte Hall,
that will serve the community as a real civic space.
Once the MOU is approved by both the Foundation and the City, the City will
approve the construction bid, and the groundbreaking, depending on weather
conditions and construction planning, should be within three months with a
proposed construction timeline of 21 months.
If you are unable to attend the Tuesday January 9 Council Meeting, we urge you to
write to your Council member if you are a Newport Beach resident to voice your
support for Witte Hall. City Council members and their emails can be found here
City Council I City of Newport Beach (newportbeachca.gov. Please contact
your Council Member today.
You can view the Council Agenda here Agendas & Minutes I City of Newport
Beach (newportbeachca.govI
OR
Kevin Barlow
Chair of the Board
Kevin.Barlow0gmail.com
Fx- I Fx- I F❑
Newport Beach Public Library Foundation 1 1000 Avocado Avenue, Newport Beach, CA 92660
Unsubscribe IkleimanCabnewportbeachca.gov
Update Profile I Constant Contact Data Notice
Sent by jkappel@nbplf.foundation
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From:
Kleiman, Lauren
To:
Sharon Turner
Subject:
Re: Witte Hall
Date:
January 04, 2024 6:57:37 PM
Dear Ms. Turner,
We are neighbors!
Thank you for reaching out to share your support for the lecture hall.
Happy new year!
Warmly,
Lauren
Logo
Lauren Kleiman
City Council District 6
W Office: 949-644-3004
100 Civic Center Drive
Newport Beach, CA 92660
Please note that email correspondence with the City of Newport Beach, along with
attachments, may be subject to the California Public Records Act, and therefore
may be subject to disclosure unless otherwise exempt.
On Jan 4, 2024, at 5:31 PM, Sharon Turner <sharonlandestumerngmail.com>
wrote:
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you
recognize the sender and know the content is safe.
Dear Ms. Kleiman,
My husband Robert and I have been residents and home owners in Newport
Beach/Corona Del Mar since 1995. For the past 9 years we have lived in Cameo
Highlands. We are also members of the Newport Beach Public Library
Foundation.
I am writing to urge you to vote for the MOU for the construction of Witte Hall.
We love attending lectures and events at the library but the existing hall is too
small and too flat. We believe that the proposed construction should go forward as
it will greatly benefit our community.
Thank you for your service as a member of the city council.
Sincerely,
Sharon Turner
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Karen Clark
To: Summerhill, Yolanda
Cc: Jerold Kaooel; Kevin Barlow; "Krahe Home"; Mireya Llaurado
Subject: proposal for usage by Foundation of the Lecture Hall
Date: January 05, 2024 1:27:34 PM
[EXTERNAL AIL] DO NOT CLICK links or attachmenra „nleac vn„ recnanize the sender and know the
content is safe.
Yolanda:
I have discussed our conversation of this morning at length with the Exec Comm of the Board
and our CEO Jerry.
What seems to make sense to all of us, and would be simple and not require any complex and
confusing analysis of direct/indirect costs, consideration of offsets for income to the City from
the Hall, etc, is to say that the Foundation will pay the City $550 for each time it uses the
Hall. Then we really wouldn't need the max we discuss of around $25k since we could use it
almost 50 times before reaching that number and that is not likely to happen. Based on Dave's
estimate of $200k/yr to operate the hall, this payment would essentially equal the proportional
daily cost of the Hall operation. We would want this fee to include basic services
(management, basic AV services that will be built into the Hall and janitorial) with the
Foundation picking up any sort of unusual cost related to a particular event. Starting with the
second year of use, we could build in an annual COL increase (we'd request a 5% cap) to help
protect the City from the normal rise in the annual costs for operating the Hall. This simple
formula would allow the City to make money on the Hall and we would have the ability to
control our cost of using the Hall. We expect the City can make this Hall a money-maker, but
that depends totally on the City efforts since it will control the Hall, the costs of running it and
the number of days and price charged for third -party use.
Hope this works. ®❑ After all our years of joint effort, it would be tragic for this project to
collapse and all the millions raised returned to the donors.
Karen
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Summerhill, Yolanda
To: Summerhill, Yolanda
Subject: FW: MOU Third Amendment --Proposed 12.15.23 rev. (3238302.1)(3248242.1).docx [IMAN-CAO.FID285407]
Date: January 08, 2024 8:06:27 AM
Attachments: MOU Third Amendment --Proposed 12.15.23 rev. (3238302.1)(3248242.1,).docx
From: Summerhill, Yolanda
Sent: December 15, 2023 11:16 AM
To: kevin.barlow@gmail.com; jkappel@nbplf.foundation; Marilyn Krahe <krahe_home@fkaild.com>;
Mireya Llaurado <mllaurado@calljensen.com>
Cc: Blom, Noah <NBlom@newportbeachca.gov>; Kleiman, Lauren <Ikleiman@newportbeachca.gov>;
Webb, Dave (Public Works) <DAWebb@newportbeachca.gov>
Subject: MOU Third Amendment --Proposed 12.15.23 rev. (3238302.1)(3248242.1).docx [IMAN-
CAO. FI D285407]
Good afternoon,
Thank you for your time on Monday. Attached is the proposed Third Amendment to the MOU based
upon our discussion. We look forward to meeting with your team on Tuesday.
Best,
Yolanda
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING BETWEEN
THE CITY OF NEWPORT BEACH AND THE NEWPORT BEACH
PUBLIC LIBRARY FOUNDATION RELATED TO FUNDRAISING FOR THE
LECTURE HALL PROJECT
This Third Amendment to Memorandum of Understanding ("Third Amendment")
is entered into as of the day of , 2024 ("Effective Date") by and between
the City of Newport Beach, a California municipal corporation and charter city ("City")
and the Newport Beach Public Library Foundation, a California nonprofit public benefit
corporation ("Foundation"). City and Foundation are at times individually referred to
herein as "Party" and collectively as "Parties."
I_»aINlfklq W
A. The Foundation and City are Parties to that certain Memorandum of
Understanding entered into as of November 30, 2021 which was amended by
First Amendment to Memorandum of Understanding entered into as of
September 12, 2022, and further amended by Second Amendment to
Memorandum of Understanding entered into as of November 15, 2022
(collectively referred to herein as, the "MOU").
B. As contemplated in Section 2.4 of the MOU, the Project was competitively bid
in September 2023 and the Estimated Project Costs based upon the lowest
responsible bid and other expenses already incurred has nearly doubled.
C. To complete the Project, the City's Commitment and Foundation's Commitment
must increase from Six Million Five Hundred Thousand Dollars and 00/100
($6,500,000.00) to Eleven Million Seven Hundred Nineteen Thousand Four
Hundred Sixty -Eight and 00/100 Dollars ($11,719,468.00) respectively.
D. The City has expended approximately Seven Hundred Fifty -Eight Thousand
Seven Hundred Dollars and 00/100 ($758,700.00) on design, environmental
and permitting for the Project. Additionally, to complete the Project, the City
must enter a construction contract without the Foundation's Commitment fully
secured.
E. As a result, the Foundation and City acknowledge and agree to amend the terms
of the MOU to complete the Project, as provided herein, including but not limited
to, designation from the Library Lecture Hall to redesignation as a City facility
and hereinafter referred to as the Lecture Hall ("Lecture Hall") along with
changes to the priority of use.
F. The City and Foundation have conferred as contemplated by the MOU and have
concluded that the Low Bid should be accepted and the MOU should be
amended to (i) increase the Foundation Commitment and City Commitment in
order to fully fund the Project and (ii) reflect the willingness of the City to award
the Construction Contract and proceed with construction of the Project subject
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 1
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
to the Foundation raising additional funds until the Foundation has met its
revised Foundation Commitment and other amendments provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants and promises
set forth herein, the City and the Foundation do hereby agree as follows:
Section 1.1.2 shall be amended in its entirety to read as follows:
"2. Furniture, fixtures and equipment ino'i idiRg b it pet which is limited to
chairs, a podiums, audio-visual equipment, tables and physical items identified in the
construction drawings as of the effective date of this Third Amendment ("FF&E")."
2. Section 1.3 of the MOU shall be amended in its entirety to read as follows:
"1.3 Project Costs. The Parties agree that the total Project costs based upon the
Conceptual Design prepared by RCA and approved by the City Council is estimated
to be Twenty -Three Million Four Hundred Thirty -Eight Thousand Nine Hundred
Thirty -Five and 00/100 Dollars ($23,438,935.00) (the "Estimated Project Cost"). The
Estimated Project Cost includes all design related costs, including but not limited to
the costs of Phases I -IV, and all anticipated costs of obtaining permits, construction
of the Project based upon the lowest responsible bid of Nineteen Million Sixty -Eight
Thousand Dollars and 00/100 ($19,068,000.00) (the "Low Bid") received from AMG &
Associates ("Low Bidder"), management of construction, inspections, other soft costs,
FF&E and a contingency of One Million Nine Hundred Six Thousand Eight Hundred
Dollars and 00/100 ($1,906,800.00) representing ten percent (10%) of the Low Bid
for construction of the Project." a low bed from /�
"Low Bidder") te-GGRStrUfG DreieGt ORtheamount of $ (the
asLow a
) and also ORGludes all design related e
ORGluding but net limited to the
/Gosts of Phases 1 IV above and all anticipatedd costs of ehtainiRg permits,
Gonstn lotion of the Drejente i imanagement of nonstrntion inspections other soft
e e
GOStS FF&E and a GGRtiRgeRGy f $ for UnexpeGted additieRalGOStS-,
representing t8 PerEent (100 ) of the Lew Rwv-Bid. The rPaar+1ecres URderstand and agree
that the Estimated PrelefGt (west is ap estimate based i Ipen the hest available
mTuica-�Tv7cccw.T�r�urrc�mTrcrcc�us
i RfOrmatiOR kROWR te the Parties as of the date of this ThiFd AmGRdmeRt and that the
anti gal Dreient nest which is defined as the anti ial nest ef'desigpipg the Dreient
>ebtaiRiRg permits,
e e
ether SEA Gests and
CCQC fer the enStFantien of the e "` (the iDreier+} (the 0°A`G I Dreent rest") may Mani based
but net limited te GhaRgeS te the design ef the ,
unfereseen nenrditiens e unfereseen rdefiniennies in the plans , unavailability of
materials andier innreases ip the nest of materials and/er laher "
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 2
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
3. Section 1.4 is hereby deleted in its entirety.
4. Section 1.5 shall be amended in its entirety to read as follows:
1.5 Change Orders. The City may unilaterally approve of -change orders
thatarerelated to construction issues at the Project that occur during construction and
that the City deems necessary (a "Necessary Change Order"). If any Necessary
Change Order exceeds the Estimated Project Cost, the Parties shall share evenly in
the cost of the Necessary Change Order. If the City or the Foundation desire change
orders to the design of the Library Lecture Hall or FF&E beyond what is identified in
the construction drawings as of the effective date of this Third Amendment (an
"Optional Change Order"), the Party requesting the Optional Change Order eachshall
notify the non -requesting Gfher-Party of such desired change and shall immediately
provide all additional funds necessary to implement the Optional Change Order over
and above the requesting Party's financial commitment set forth in Sections 2.1 and
3.1 respectively." the Pa4mes shall moot and GE)RfeF in rood faith to discuss the
Ordersproposed GhaRge order and the reaSeRS therefor provided the Fneet and GGRfeF PFE)Gess
Rthe aggregate
• re
hr +�,,, ttt�� /� ,
ge—Oi Orders") the Contingency, aRa--Gt mO� �n plus the
GE)RtiRgeRGY plus the amount of the GhaRge Orders ever the GGRtiRgeRGY exGeed
e e e
the Pai4ies shall Fneet as requested by either
5. Section 2.1 shall be amended in its entirety to read as follows:
"2.1 The Foundation Commitment.
use host efforts to --collect donations it
Estimated Project Cost or
Thousand Four Hundred Si
The Foundation expressly agrees that it shall
the amount of fifty percent (50%) of the
Eleven Million Seven Hundred Nineteen
Eight Dollars and 00/100 Dollars ($
($11,719,468.00), whichever is rg eaterless (the "Foundation Commitment") te—pay
toward or the Project.
The Foundation INSERT AMOUNT CURRENTLY RAISED, FUNDS
AVAILABLE AND REMAINING PAYMENT SCHEDULE HERE."
6. Section 2.4 shall be amended in its entirety to read as follows:
"2.4 Bidding; Payment of Donations. The City completed
construction drawings, an-d-obtained required permits tH� for thin Project the City shall
p-ut Ip aced the Project out to bid as a public works projectL. The wit " shall notifiedy the
Foundation of the date, time and place that the bids received for the Project will bewere
opened by the City, invited and representatives of the Foundation shall he invited to
attend the bid opening, notified the Foundation of the City Council study session held
on November 14. 2023. and the January -. 2023. meetina wherein the Citv Council will
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
consider award of the construction contract to the lowest responsible bidder. —_UpGn
M8etiRg shall RGt OGG61F earlier thaR fifteeR (15) days after the FeuRdatieR is giveR SuGh
RGtiGe of the date Of S„Gh Gity GOURGil MeetiRg The Foundation shall place INSERT
AMOUNT and 00/100 Dollars ($ ,000,000.00)-^Re hURdFed PeFGe„t (100 ) of the
Foundation Commitment into an escrow account at First American Title Company in
Santa Ana, CA or other escrow company agreed to between the Parties ("Escrow
Holder") not later than the Friday before said r ity CGURG01 Meet the January , 2023,
City Council meeting so long as the agenda item remains on the City Council's agenda
for such meeting (i.e., the matter has not theretofore been removed from the City
Council's agenda). At such time as the City (i) thereafter demonstrates to the
Foundation that the City has appropriated the City's Commitment set forth in Section
3.1 and (ii) has awarded the contract, finalized negotiations with the contractor and
entered into a construction agreement for the Project wherein the City is legally bound
to pay for and construct the Project (the "Release of Funds Conditions"), the Escrowed
Funds shall be disbursed to the City. Upon the occurrence of the Release of Funds
Conditions, Foundation agrees to promptly execute instructions if requested by Escrow
Holder as a condition to the disbursement of the Escrowed Funds to the City.
Notwithstanding the foregoing, fin the event of the termination or expiration of this
Agreement prior to the City entering into a construction contract for construction of the
Project, the Escrowed Funds minus fifty percent (50%) of the Actual Protect Costs
incurred by the City as of the termination date shall be returned to Foundation. Upon
such termination or expiration of this Agreement, the City agrees to promptly execute
instructions if requested by Escrow Holder as a condition to the disbursement of the
Escrowed Funds to the Foundation. Escrow fees of Escrow Holder shall be paid out
of the Escrowed Funds."
7. Section 2.5 shall be amended in its entirety to read as follows
"2.5 Future Project Enhancements. In the event the Foundation believes
that certain enhancements or upgrades of the Lecture Hall or Bamboo Courtyard would
be worthy of financial support of the Foundation On future yearsfollowing the
Foundation's full payment of the entire Foundation Commitment, the City will work with
the Foundation to implement those enhancements or upgrades desired by the
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 4
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Foundation that are reasonably acceptable to the City provided the Foundation pays
the entire cost of any project enhancement.2
8. Section 3.1 shall be amended in its entirety to read as follows:
"3.1 ThA City's Commitment. The City has earmarked, and through this
Agreement commits to pay up to a maximum of fifty percent (50%) of the Estimated
Project Cost or Eleven Million Seven Hundred Nineteen Thousand Four Hundred
Sixty -Eight and 00/100 Dollars {$($11,719,468.00) `
whichever is less (the "City's Commitment") towards GOsts effor the Project."
9. Section 3.6 shall be amended in its entirety to read as follows:
"3.6 Use of Lecture Hall. The Lecture Hall shall be owned and
controlled by the City. Notwithstanding the foregoing, the Foundation shall have a right
of first refusal to use the Lecture Hall for forty (40) days each fiscal year which may be
exercised by providing the City with one (1) year prior written notice prior to each fiscal
year of the proposed schedule. Any additional days requested by the Foundation will
be evaluated by the City in coordination with all other requested uses and events. The
use of the Lecture Hall shall be subject to user fees in accordance with the cost study
to be prepared on behalf of the City and approved by the City Council. Te the extep+
the City GORtFOIS the use of the Library LeGture Hall, the FeURdatieR shall have the righ
te the use of the Library LeGtWre Hall OR aGGE)FdaRGe with the -Beard ef LibFary Trustees
D Iini 1�IRDI 15 attaGhed Hereto 'v and nT�rnrpvrai�ca r'Te eii. asrExhiih�o". "
10. Section 13.1 shall be amended in its entirety to read as follows
"13.1 Compliance With all Laws. Foundation shall at its own cost and expense
ensure the MOU and any amendments comply with all applicable statutes including,
but not limited to, California Business and Professions Code Section 17510.8 or other
statutes related to charitable contributions, ordinances, regulations and requirements
of all geyernmeRtal eRtitiesfederal, state, county or municipal entities including, but not
limited to any interpretations or approvals by the California Attorney General Charitable
Trust Division, whether, now in force or hereinafter enacted -related to its obligations
under this Agreement_."iRGludiRg federal, state, GO Rty „r mcther, 4
ferGe or hereinafter eRaGted
11. Except as amended by this Third Amendment, the MOU shall remain in full
force and effect.
12. This Third Amendment may be executed in two (2) or more counterparts, each of
which shall be deemed an original and all of which together shall constitute the same
instrument.
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed on the dates written below.
APPROVED AS TO FORM: CITY OF NEWPORT BEACH,
CITY ATTORNEY'S OFFICE a California municipal corporation
Date: 2024 Date: 2024
By: By:
Aaron C. Harp Will O'Neill
City Attorney Mayor
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING -
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
ATTEST:
Date:
2024
FOUNDATION:
Newport Beach Public Library
Foundation, a California Nonprofit
Corporation
Date:
Leilani I. Brown Jerold D Kappel
City Clerk Chief Executive Officer
2024
Date: 2024
By:
Marilyn Krahe
Secretary
[END OF SIGNATURES]
THIRD AMENDMENT TO MEMORANDUM OF UNDERSTANDING - 7
NEWPORT BEACH PUBLIC LIBRARY FOUNDATION
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Nancy Scarbrough <nancy@nancyfornewport.com>
Sent: January 08, 2024 2:19 PM
To: Dept - City Council
Subject: Support Lecture Hall - Agenda Items 13 and 14
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the content
Air
Mayor O'Neill and Members of the Council,
I am writing to support the approval of Items 13, approval of the 3rd Amendment to the MOU with the
Library Foundation and Item 14, approval to award the construction contract. I believe the Lecture Hall
will be a extraordinary addition to our City and a worthwhile benefit to our residents.
Thank you for your service.
Best regards,
Nmvlc4 Scmrl romgl
NancyCaD-NancyforNewport.com
Cell: 949-887-6974
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Margi Murray <margimurray@mac.com>
Sent: January 08, 2024 2:24 PM
To: Dept - City Council
Subject: Vote yes on MOU for Witte Hall
[EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the
content is safe.
Dear council members,
We have the opportunity to benefit from another sterling community partnership with the NBPLF in
building a long -anticipated and state of the art lecture hall. We can wait and spend more later. I just
don't think that's good planning, or good stewardship.
I was so pleased with our community float in the recent Rose Parade. What a terrific place we have here.
Let's make the smart move to provide for our community's future. Let's build the lecture hall now.
Thank you,
Margi Murray
Sent from my iPad
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
STATE CAPITOL
P.O. BOX 942849
SACRAMENTO, CA 94249-0072
(916) 319-2072
FAX (916) 319-2172
DISTRICT OFFICE
17011 BEACH BOULEVARD. SUITE 1120
HUNTINGTON BEACH, CA 92647
(714) 843-4966
January 8, 2024
(4snuh1v
(fuldormtt Zrgislttfurr
fr
yT hTp'
DIANE B. DIXON
ASSEMBLYMEMBFR. SEVENTY-SECOND DISTRICT
Re: Agenda Item #13 January 9, 2024
Honorable Mayor and Members of the City Council:
COMMITTEES
VICE CHAIR: ACCOUNTABILITY AND
ADMINISTRATIVE REVIEW
VICE CHAIR: LOCAL GOVERNMENT
APPROPRIATIONS
BANKING AND FINANCE
BUSINESS AND PROFESSIONS
JUDICIARY
JOINT FAIRS ALLOCATION AND
CLASSIFICATION
I write in strong support of the proposed Witte Library Lecture Hall on your Agenda Tuesday evening.
I served as the City Council representative on the Library Lecture Hall Design Committee from its
inception in 2019 until I resigned my council position December 1, 2022 upon election to the State
Assembly.
For over 30 years as an executive in private industry responsible for philanthropic investments in our
communities, as well as a member of the Newport Beach City Council, I have been a fierce advocate of
public/private partnerships. These partnerships are fiscally smart and allow for community members to
have "skin in the game" for public infrastructure projects that benefit the community at large. Among
the projects recently funded under public/private partnerships have been The OASIS Senior Center, the
Jr. Lifeguards facility and the new Animal Shelter.
The Witte Library Lecture Hall is a bargain for the city. A project estimated to cost $23 million will be
funded 50% by the Community and library donors and 50% by the City of Newport Beach.
As a former Chair of the Finance Committee, I am well versed in the available funds for this project and I
am confident that the city's 50% share can be fully funded without sacrificing any other projects or city
operations.
For example, the City Facility Financing Plan (FFP), provides a model for assuring capital project funding
without reducing operations of the city. Non -tax revenues from development fees are available through
the FFP for projects like this one that enhance community amenities. These funds are reserved
specifically for this type of capital project.
In addition, the city has substantial cash reserves of nearly $400 million. Finally, if the council chooses to
do so, it can finance its $11.7 million portion of the project at an interest rate of approximately 3.5%
In terms of return on investment, there is no other pending project where the city's funds are leveraged
for a 100% dollar -for -dollar match with private funds. In my opinion, it would indeed be a poor policy
choice, and poor financial stewardship, to allow the $11.7 million from private donors to be lost.
It would also be an unfortunate choice if the city, with the ability to provide an outstanding community
and educational resource at half its actual cost, should fail to take advantage of this unique opportunity.
The Witte Lecture Hall will be a facility that will serve future generations of Newport Beach residents,
and you can be justly proud of providing the leadership to make this project a reality.
I strongly and respectfully urge your support of the Witte Lecture Hall. Thank you for your consideration.
Sincerely,
Diane Brooks Dixon
California's 72ndAssembly District
City of Newport Beach Mayor 2016 and 2019
Received After Agenda Printed
January 9, 2024
Agenda Item No. 13
From: Summerhill, Yolanda
Sent: January 09, 2024 11:53 AM
To: Blom, Noah; Kleiman, Lauren
Cc: Harp, Aaron; Leung, Grace; Webb, Dave (Public Works); Brown, Leilani
Subject: FW: Foundation Board Action on MOU Amendment
Attachments: Jan 9, 2024 - Proposed replacement to last sentence of Section 3.6 of the proposed MOU
Amendment.docx
Good afternoon. Please note that the Foundation proposes alternative language in Section 3.6 related to their fee for
use of the Facility.
From: Karen Clark <karen.h.clark@gmail.com>
Sent: January 09, 2024 10:19 AM
To: Summerhill, Yolanda <YSummerhill@newportbeachca.gov>
Cc: Jerold Kappel <Jkappel@nbplf.foundation>; Kevin Barlow <kevin.barlow@gmail.com>; 'Krahe Home'
<Krahe_home@fkaild.com>; Mireya Llaurado <mllaurado@calljensen.com>; Jill Johnson -Tucker <jilljtucker@gmail.com>
Subject: Foundation Board Action on MOU Amendment
Dear Yolanda:
Last night at the Library Foundation Board meeting, the Board voted to
approve the MOU Amendment on the condition that a) the two omitted
naming rights are included and b) the last sentence of Paragraph 3.6 be
replaced with essentially the language in the attachment. You can see I
put in our initial offer of $550 per use. We understand that the per
diem cost to operated the Hall may be larger than that, although we
remain confused as to how that amount doubled. Given that we are paying
for half the cost of the Hall and are essentially the programming arm of
the Library, not a disinterested third party, we find our proposed
number fair. However, in order to try to save the Hall by reaching a
compromise, and based on your request of closer to $1100 per use (a sum
that could actually make the Hall quite profitable for the City - especially since
we are not asking for any set-off for the City's income from the Hall), the
Foundation Board agreed it would be willing to increase that per -use
amount to $700.
The Board also approved the addition you requested of language to Section 3.6
to the effect that our usage would comply with the TIC recorded restrictions
on the property.
The Board is hopeful that we will get a positive vote from Council tonight. Let me know
if you have any comment/feedback on the Foundation's vote.
Karen
In order to help defray on -going costs of the Lecture Hall, the Foundation shall contribute to the City for
each use by the Foundation of the Lecture Hall the lesser of (a) the per diem cost of Lecture Hall
operations for the first year of use as determined by the City's cost study; (b) the lowest rate charged by
the City for use of the Lecture Hall by any third party; or (c) $700. Following the first year of the
availability of the Lecture Hall for program use, this sum shall increase annually by the CPI - All Items (not
to exceed 5% in any year).