Museum and city wrangle over new lease

Yuma Museum and City of Yuma representatives met a few times last week ironing out a new lease as the museum moves forward with a grant application for its planned renovation project.
Tempers were a bit flared after the initial meeting, last Monday, but it calmed down a bit as both groups met Tuesday and again Saturday.

A few museum representatives had met with city staff last Monday, during which a new “commercial” lease agreement from the city was presented to the museum leaders. Museum leaders objected to several requirements within the lease.
A special Yuma City Council meeting was held late afternoon last Tuesday. The council voted 4-0 approving a professional services agreement with Edmondson Reed & Associates, Inc. the architectural firm that will do the plans for the museum renovation. Yuma native Travis Roubideaux works for the Oklahoma firm and is in charge of the museum project.
Mayor Ron Swehla, and council members Dan Baucke, Bryson Chrismer and Luke Goeglein were in attendance.
Approving that agreement was a key part in moving forward with the grant application.
However, it was the new 30-year lease presented to the museum the previous day that was the point of contention.
Matt Vincent, who is no longer on the museum board, but still closely aligned with the museum and is helping write the state grant application, told the council he felt the museum board was being strong-armed into accepting a new lease. He said the museum representatives were told Monday they needed to accept the new lease or there would not be any work done at the museum.
City Manager Scott Moore said there was a misunderstanding, that his intent was to tell them that the agreement with the architect had to be done before the museum could move forward with the grant.
Still, museum board members and citizens had concerns with the new lease. The city and museum currently have a 100-year lease signed in 1990, which was preceded by another lease.
City Attorney Kathryn Sellars explained the need for a new lease. She noted that her role is to protect the city against liability and risks. The museum is owned by the city, and any construction work on a city building is a public works project, which under law requires certain responsibilities by the city in areas of compliance. The way it is set up, the city would have to do the bids for the project, make sure the insurance is in place and do the contracts with the contractors, rather than the museum board.
She added that neither the city staff nor the museum want that.
Sellars said the 1990 lease is bare bones and has holes in it in regards to a tenant wanting to do construction on a public building.
She said it puts the city at risk for liability, and also does not give the tenant (the museum) the authority to do the project.
“I have concerns that the state may reject the grant application (under the current lease),” Sellars said, adding the new lease would show the state that the museum has the authority to do the project, and that the city is on board.
Sellars said the lease contains standard language, but offered a branch to the museum board by stating details such as paying taxes and utilities, are up for negotiation.
Monica King of Yuma Museum Board said time is of the essence as March 1 is the first deadline for the grant application, with April 1 the final deadline.
“We feel our backs are against the wall right now with a new lease put in front of the board at this time,” she said.
King noted the lease states the museum pays all the utilities, which the city has paid for since 2018. Utilities have averaged about $1,100 per year over the past five years.
“We feel like the museum is part of the community, part of the city,” she said. “It is a big shock to us that the lease is no longer good, and so close to the grant deadline.”
Museum supporter Bill Wenger asked if the city would consider selling the building.
Sellars said the council likely would donate it if it could, but is bound by the Yuma Municipal Charter that dictates city property be sold at appraised value.
“That’s why we’re sort of stuck in this situation,” Sellars said.
Councilman Goeglein said the hope is to come to an agreement on some of the objectionable points in the lease, and move forward with the project. He noted it would take some time for the museum to get insurance bids on the contents inside the building, and the museum does not have the time nor the money to get it done now. The lease calls for the museum to insure at $2 million.
“The bottom line is those contents are priceless,” Wenger said.
Sellars said $2 million liability is standard as it is the limits of governmental liability in Colorado. However, she said the lease can be written to an amount the museum can afford, and also have language that the city is not liable.
The lease also addressed property taxes, though a non-profit like the museum, and local governments, are exempt from property taxes. Sellars that the property tax issue was in there to protect against potential future changes in the law. She said the language can be softened to note that the museum currently is not taxed and not liable for paying taxes.
Museum board member Rich Birnie asked why the museum would want to sign a new lease for less years. Sellars said leases can be reviewed at any time, and does not like long-term leases because things change.
She reiterated that the main issue is the current lease does not give the museum the authority to do the work under the grant.
Councilman Baucke asked why not just modify the current lease. Sellars responded by asking why not just do a new one instead of modifying.
Community member Duane Brown said the state grant is a great opportunity to get the museum fixed. He said he liked Baucke’s idea of modifying the current lease so the museum can move forward, instead of doing a commercial lease.
“As Bill (Wenger) pointed out, this really isn’t a commercial project, it’s a community asset,” Brown said. “It’s important to keep that in mind as you move forward.”
He suggested coming up with a document that protects the city from construction and liability, but also leave the city and museum board in the same position they have been since the museum first opened 50 years ago.
Sellars again stressed the museum does not have the authority to do the project as the lease is now, and does not want that to be a derailment when it can be addressed now.
Vincent said he thinks the museum board would be willing to sit down and negotiate terms in the lease.
“The museum simply could not afford the costs built into the lease handed to them yesterday,” he said. “…My point to the council is we can negotiate with the city and remain partners in this venture. This is the city of Yuma, this is the story of Yuma.”
King noted the museum has been able to operate thanks to the city paying the bills. She said the museum board has a vision of turning the museum into more of a year-round facility with more interaction with the community.
“Updating the building will allow that, so it is vital to continue our partnership with the city,” she said.

Baucke stressed that the council really is trying to work with the museum board.
Sellars said the museum and council can sit down to make sure the financial burden of the new lease is as low as possible, or not even change what it currently is.
Councilman Chrismer said it will get worked out. Council members also indicated they wanted the city to continue paying the utilities.
The first reading for the ordinance for the lease was tabled until the February 18 meeting. A workshop was set up for last Saturday morning.

The issues were addressed at that workshop, held at City Hall. Only council members and museum board members, along with city staff, were allowed to speak.
The term of the lease was now at 50 years. The museum board was okay with that, as well as a review every 10 years.
There was discussion on such matters as who is responsible if a water line breaks.
There was more talk on the paying of utilities. Moore said the city cannot give away utilities, but can come to an agreeable number, He said the city can continue to pay the utilities this year, but it was a decision that had to be made with each budgeted year. Sellars, participating by phone, explained the council cannot commit to future expenditures due to TABOR restrictions.
Councilman Goeglein said he understands the museum’s point of view, noting the museum has the council’s support now, but cannot speak for the future.
Councilman Bauck had suggested treating the museum like, for instance, the library, and have its own budget within the city budget each year.
However, Sellars explained that by making the museum a city department also would mean the museum losing some of the independence it has now. For instance, the council would be the entity to appoint members to the museum board, and would have all final monetary decisions regarding the library.
Museum board members indicated they would like to maintain the independence, so making the museum a city department was out.
Much more discussion was held Saturday morning, but the Pioneer had to leave after about one hour so was unable to document the whole discussion.
The first reading of the ordinance for the new lease was on the agenda for this past Tuesday’s meeting, as was action to approve the mayor’s signature on the museum grant application.