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<br />Agreement with California State <br />University, Fullerton Foundation <br />for the Grand Central Art Center <br />April 5, 2004 <br />Page 2 <br /> <br />operate its graduate visual arts program at the Grand Central building <br />located at East Second Street and Broadway in the Artists Village. The <br />building was completely renovated by the Agency for use by the <br />University. Construction was completed on this historic building in <br />1999, triggering the 10-year Operating Agreement. The Grand Central Art <br />Center includes three art galleries, a live performance "black box" <br />theater, a printmaking studio and a restaurant. There are also 27 <br />student residential units with studio space for each resident student. <br /> <br />The building opened in February 1999. Since that time, the facility has <br />been a tremendous asset to the City, the Artists Village and the entire <br />Downtown. Under the terms of the agreemènt, the Agency agreed to <br />provide an operating subsidy for the first four years based upon the <br />projected annual operating deficit to the University. This annual <br />subsidy expired in December 2002. . <br /> <br />At the mutual request of staff and CSUF, it is recommended that the <br />lease be extended for an additional 20 years or until 2029. In <br />addition, due to unexpected operating cost increases and somewhat lower <br />revenues from the Gypsy Den restaurant leasè and less than anticipated <br />use of the black box theater, a new operating subsidy is recommended for <br />the next five years. The additional assistance to be paid by the Agency <br />will be as follows: <br /> <br />2003 <br />2004 <br />2005 <br />2006 <br />2007 <br /> <br />$80,000 <br />75,000 <br />70,000 <br />65,000 <br />60,000 <br /> <br />The 20-year extension may only be rescinded upon the mutual agreement of <br />both parties. This 20-year lease extension will ensure the long-term <br />presence of Cal State Fullerton in the heart of the Artists Village, <br />thereby solidifying the City's long-term vision for that area of the <br />Downtown. <br /> <br />Under the subject agreement, the Agency will assign the fee simple <br />interest in the premises to the City of Santa Ana, and CSUF will consent <br />to this assignment subject to the City's compliance with all terms and <br />conditions of this lease. This is necessary, as the Agency cannot enter <br />into a long-term lease with CSUF under California Redevelopment Law. <br /> <br />251-2 <br />