HomeMy WebLinkAboutE. Johnson Memorial Garden - Annual Fine Art Insurance PremiumX C
CITY OF PALM DESERT 6
CITY MANAGER'S OFFICE
STAFF REPORT
REQUEST: APPROVAL TO FUND THE ANNUAL FINE ART INSURANCE PREMIUM,
IN THE AMOUNT OF $11,200, FOR ART SCULPTURES LOCATED
WITHIN THE ERIC JOHNSON MEMORIAL GARDEN PER THE LEASE
AGREEMENT WITH THE PALM SPRINGS ART MUSEUM.
SUBMITTED BY: Stephen Y. Aryan, Risk Manager
DATE: February 12, 2014
CONTENTS: 1. Robertson Taylor Fine Art Insurance -Premium Invoice
2. Contract No. C29860-Section 2.3 Excerpt
Recommendation
By Minute Motion,
1. Approve $11,200 in funding for the annual fine art insurance premium for art
sculptures to be placed in the Eric Johnson Memorial Garden, per conditions of
the lease agreement with the Palm Springs Art Museum.
2. Appropriate $11,200 from the Unobligated General Fund for fine art annual
insurance premium costs and transfer to Account No. 110-4800-454-3885.
Backaround
The lease agreement between the Palm Springs Art Museum and City of Palm Desert
obligates the City to obtain insurance for the 11 sculptures currently installed in the non-
exclusive use area (Eric Johnson Memorial Garden and/or Multi -Sensory Garden). As many of
these sculptures are on temporary donation with the Museum, it is recommended that the City
reimburse the Museum directly and have the artwork insured via their fine art broker.
The California Joint Powers Insurance Authority has previously raised no objections on this
arrangement. The insurance will be provided by Lloyd's of London and there is no deductible for
covered losses, with the exception for those as a result of an earthquake. Any earthquake related
loss is subject to a $25,000 deductible per loss.
Please note there are some policy exclusions including terrorism, wear and tear, inherent vice,
nuclear radiation, war, damage due to retouching or conservation processes, insects and vermin,
governmental seizure and/or destruction. Staff recommends approval of the aforementioned
insurance policy and $11,200 annual premium.
Fiscal Analysis
There are 11 sculptures currently installed in the Eric Johnson Memorial Garden (Sculpture
Garden), as the recently installed Plensa piece consists of two sculptures. They have a combined
value of $2.8 million (see breakdown below) and will require an annual insurance premium of
$11,200. This is an increase of $2,950 from last year's premium, as the Plensa piece was installed
and is valued at $900,000.
Robertson Taylor -Los Angeles
15260 Ventura Blvd Ste 2230
Sherman Oaks, CA 91403
Phone : 818-815-2600 Fax : 818-815-2640
City of Palm Desert
Stephen Aryan, Risk Mgr
73-510 Fred Waring Drive
Palm Desert, CA 92260
Itm #
INVOICE #
INVOICE # 59020
Page 1
ACCOUNT NO. OP
DATE
PALMD-1 AG
C 1/20/15
PRODUCER
Victoria S. France
BALANCE DUE ON
02/09/15
AMOUNT PAD)
AMOUNT DUE
$ 11,200.00
Due Date Trn Type Description
5"20
259428 02/09/15 REN FINE Policy renewal $
Invoice Balance: $
Please make your check payable to Robertson Taylor
Amount
11,200.00
11,200.00
Lessee and its guests, subject to any exclusive -use rights granted by Lessor to other persons or
entities. (c) Lessor agrees to restrict vehicular access at both ends of Carriage Lane, with access
available only to Lessor, the fire department, the police department and Lessee as approved by
the Fire Marshall and City Engineer. It is intended that Carriage Lane will be used, except in
limited circumstances, solely for pedestrians.
2.2 Condition; Compliance with Laws. Lessee shall lease the Premises in their "AS -IS"
condition, without representation or warranty, express or implied, and Lessee hereby
acknowledges that in no event shall Lessor be obligated to make any alterations, repairs or
improvements to the Premises, except as otherwise provided herein.
Lessee has made such investigation as it deems necessary with reference to such matters and
assumes all responsibility therefor. In addition, Lessee hereby expressly acknowledges that
Lessee has had full opportunity to inspect the Premises (including, without limitation the
presence/absence of hazardous materials, the condition of fixtures and equipment, and whether
the improvements comply with law). Lessor hereby agrees to make any changes to the Premises
required by existing laws or by amendments to existing laws or by new laws.
2.3 Sculpture Garden, Multi -Sensory Gardens, Plaza, Carriage Lane and Parking
Spaces. Lessee shall be responsible for transportation, installation, and removal of sculptures;
however, Lessor shall reimburse Lessee all reasonable costs in connection with the
transportation, installation, and removal of sculptures not to exceed $10,000 per installation or
removal, including transportation of each sculpture, unless approved by the Lessor. Lessor shall
be responsible for accomplishing all tasks and paying all costs associated with the sculptures
located within the Sculpture Garden and Multi -Sensory Gardens, including without limitation,
the installation of bases and/or foundations for the sculptures, lighting, cleaning and ongoing
maintenance as needed or reasonably requested by Lessee. Lessor shall pay to Lessee the sum of
$2,575.00 as a one-time honorarium for each piece of sculpture placed by Lessee at the Sculpture
Garden or Multi -Sensory Gardens, upon completion of the installation of the sculpture, which
amount shall be increased by $50.00 on the anniversary of the Commencement Date each year
during the term hereof or any extension. There shall be an initial maximum of twenty (20)
honoraria; additional honoraria payments shall be at the discretion of the Lessor. Lessor shall be
responsible for all landscaping, landscape and other maintenance, cleaning and trash removal,
irrigation and other related expenses to maintain the Sculpture Garden, Multi -Sensory Gardens,
Plaza, Carriage Lane and Parking Spaces at no less than their current level of maintenance
quality and to maintain the roads and parking areas surrounding the Premises. Lessor and Lessee
shall cooperate in the selection and approval of sculptures to be placed in the Sculpture Garden,
Plaza or Multi -Sensory Gardens, but the final determination of the selection of sculptures shall
be made by Lessee, provided that no sculpture shall be placed in the Non -Exclusive Use Areas
that is likely to cause substantial controversy in the community. (Lessee may display art and
sculptures selected in its sole discretion in the Museum.) Lessee shall install ten or less
sculptures in the first year of actual operation and five or less sculptures in any succeeding year.
Placement of the sculptures will be determined in cooperation between Lessee and Lessor.
Lessee shall have the right to nominate representatives for one seat on Lessor's City Marketing
Committee and one seat on Lessor's Art in Public Places Commission during the initial and any
extended term(s) hereof. Appointment of nominees to the commissions shall be at sole
discretion of Lessor's City Council. Inasmuch as copyright(s) for the sculptures to be placed in
Palm Springs Art Museum. Palm Desert Lease 7rMO10
the Gardens belongs, in most cases, to the respective artists, use of any visual images of such
works by Lessor must be approved by the Lessee and copyright approval(s) must be obtained
from the respective artist(s). Lessor shall be responsible to insure all sculptures at the Sculpture
Garden and the remainder of the Nonexclusive Use Areas against loss, damage or theft in such
amounts as are reported by Lessee to Lessor, and determined to be reasonable and appropriate by
Lessor and Lessee, but in no event less than the aggregate fair market value of all sculptures nor
more than $20,000,000 or such greater amount as may be subsequently agreed upon by the
parties. Lessor shall make no material change in the Sculpture Garden, Plaza or Multi -Sensory
Gardens during the initial or any extended term(s) hereof without the prior written consent of
Lessee, which shall not unreasonably be withheld. During the initial and any extended term(s)
hereof, Lessee shall provide a sculpture expert to work with Lessor in connection with the
maintenance and appearance of the Sculpture Garden and Multi -Sensory Gardens, which
sculpture expert shall initially be Lessee's Executive Director, Dr. Steven Nash, PhD.
3. Possession. Lessor shall not be required to deliver possession of the Premises to Lessee
until Lessee complies with its obligation to provide evidence of insurance under Paragraph 6, but
such failure to provide evidence of insurance shall not extend or delay the Commencement Date.
4. Use.
4.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful,
creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to
neighboring premises or properties. Lessee acknowledges that Lessee's obligation to maintain
the Museum open to the public as set forth in paragraph 1.6 above, and maintain an art collection
of comparable size and quality to other art museums of similar size (8500 square feet) is a
material part of the consideration to Lessor, and Lessee's failure to do so will be a material
breach of this Lease.
4.2 Hazardous Substances.
(a) Definitions. The term "Hazardous Substance" as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include, but not be limited
to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. "Reportable Use" shall mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any governmental authority, and/or (iii)
the presence at the Premises of a Hazardous Substance with respect to which any Applicable
Requirements requires that a notice be given to persons entering or occupying the Premises or
neighboring properties.
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Palm Springs M Museum, Palm Dcscn Lease 7/2/2010