Staff Report with Attachment
PREPARED BY: Ryan Baker
Library Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 09/03/2019 ITEM NO: 8
DATE: September 3, 2019
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive the Private Sector Arts Contribution Program Report and Direct the
Preparation of an Ordinance Designating One Percent of Building Valuation
Costs of New Development for Funding Public Arts
RECOMMENDATION:
Receive the Private Sector Arts Contribution Program Report and direct the preparation of an
ordinance designating one percent of building valuation costs of new development for funding
public arts.
BACKGROUND:
A private and/or public sector arts contribution program can be designed as a requirement on
development projects to encourage the construction of on-site public art or fund public arts
through in-lieu contributions. Typically referred to as a “Percent for the Arts” program, it is a
common and increasingly popular requirement in California cities.
In January of 2016, Town Council approved the Arts and Culture Commission’s strategic plan
which identified public art, funding, and community engagement as its three major goals. At
the April 18, 2017 Town Council meeting, the Commission presented the possibility of
investigating a development contribution requirement for arts funding in alignment with the
strategic plan. The Commission returned to Town Council on June 19, 2018 with a report
produced by the Commission and a recommendation to pursue an ordinance designating one-
half-of-one percent of building valuation for all private development projects to fund public arts
programs. At that meeting, Council directed staff to obtain further information including
clarifying any legal concerns, required nexus studies, and financial analysis. Council also
directed that single family residential projects, accessory dwelling units, and affordable housing
be excluded from consideration in such an ordinance.
PAGE 2 OF 3 SUBJECT: Receive Arts Contribution Report and Direct the Preparation of an Ordinance for Public Arts DATE: September 3, 2019
DISCUSSION:
Subsequent to this direction, staff released a request for proposals for an independent
consultant to investigate arts funding and provide recommendations. Staff retained Keyser
Marston Associates to produce the requested Private Sector Arts Contribution Program report
(Attachment 1).
Key findings and recommendations of the consultant’s report include:
• An arts requirement on development, as supported by legal precedent, is not an impact
fee and does not require nexus analysis support.
• The Arts and Culture Commission’s June 18, 2018 original recommendation to establish
a one-half-of-one percent requirement on development projects would not be fiscally
viable. The consultant analysis found viability with a one percent requirement with no
threshold or cap.
• An arts requirement in Los Gatos would generate little revenue on an annual basis due
to the built-out nature of the Town but would allow the Town to benefit if significant
projects occurred at any point in the future.
• The requirement could allow applicants to choose either providing on-site public art or
making an in-lieu payment to a Town fund to be used for public arts.
• The report recommends enacting an arts contribution requirement for public projects
along with private developments, excluding street overlays or infrastructure.
The Arts and Culture Commission reviewed the consultant’s report at a special meeting on
August 8, 2019 and offered the following for consideration: The Arts and Culture Commission
wishes to express their appreciation to the Council for pursuing the independent consultant’s
report and recommends that Council move to prepare an ordinance based on the findings of
the report given with one exception. The Commission asks that Council consider setting the
amount of building valuation at one and one-half percent for both on-site and in-lieu
contributions rather than the consultant’s recommendation of one percent.
The Commission also wishes to express that even with adoption of an ordinance establishing a
Development Arts Requirement Program, additional means of funding will be needed to create
a robust arts program in Los Gatos. The Arts Commission will be working to identify additional
funding streams to compliment this ordinance and will return to Council with their suggestions
at a future date.
PAGE 3 OF 3 SUBJECT: Receive Arts Contribution Report and Direct the Preparation of an Ordinance for Public Arts DATE: September 3, 2019
DISCUSSION (Continued):
Staff has carefully considered the value of adopting an ordinance in light of the low projections
contained in the financial illustration section of the consultant’s report. Despite these
assumptions, staff recommends moving forward with the preparation of an ordinance noting
that having the ordinance in place would capture any large projects that might surface in the
future and that the model for sustainable funding for arts in Los Gatos will likely be the sum of
multiple small revenue vehicles.
Specifically, staff recommends adopting the consultant’s recommendations as the framework,
noting the following clarifications for the purpose of the ordinance: multi-family residential be
defined as three or more units, and exemptions for single family residential, two-unit projects,
accessory dwelling units, and affordable housing projects.
Staff defers to Council on the Arts and Cultures Commission’s suggestion to consider a higher
percentage of building valuation be applied.
CONCLUSION AND NEXT STEPS:
If Town Council directs the preparation of an ordinance, it will be placed on a future Council
agenda. Should the ordinance be adopted, staff will then work with the Arts and Culture
Commission to develop guidelines addressing criteria for expenditure of in-lieu funds, qualifying
public art expenses, and other program issues as mentioned in the consultant’s report.
FISCAL IMPACT:
Administrative costs required to establish the program may exceed contributions at the outset.
However, once established, staff is confident that even at low levels contributions would
outpace costs.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. Private Sector Arts Contribution Program Report