SR-07-09-2013-3IID
City of City Council Report
Santa Moniea
City Council Meeting: July 9, 2013
Agenda Item: 3 ® �L
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Parking License Agreement for 1337 7th Street
Recommended Action
Staff recommends the City Council:
1. Authorize the City Manager to negotiate and execute a temporary Parking
License Agreement with Alcion PS Santa Monica LLC, a Massachutes -based
company, for a property located at 1337 -45 7th Street to generate approximately
$131,000 of revenue for a one -year term with monthly renewal options.
2. Authorize the budget changes as outlined in the Financial Impacts and Budget
Actions section of this report.
Executive Summary
Alcion PS Santa Monica LLC ( "Alcion ") currently leases the surface parking lot at
1337 -45 7th Street as parking to serve its tenants at 1314 7th Street. The City is
currently finalizing a land exchange to acquire 1337 -45 7th Street as the replacement
site for Fire Station No. 1. The proposed license agreement would enable Alcion to
continue to use the site for parking until the Fire Station starts construction and it would
enable the City to generate parking income from the site.
Background
On August 14, 2012, Council authorized an exchange of City -owned property located at
1338 -42 and 1321 5th Street for property located at 1337 -45 7th Street
('7th Street Property "), which would serve as a replacement site for Fire Station No. 1.
The seller of the 7th Street Property, 1337 7th Street LLC, has requested that upon
conveyance, the City continue to make the site available to its parking tenant, Alcion,
until the City is ready to commence construction on the fire station. The 7th Street
Property is a 22,500- square foot, paved parking lot with 84 spaces. The City anticipates
taking possession of the property in the fall of 2013.
1
Discussion
The proposed license agreement would be for an initial term of one year with a monthly
renewal option thereafter, with the City retaining the sole and exclusive right to
terminate. To determine the fair market value of the license agreement, staff evaluated
various comparable lease rates and determined that the value should be based on the
average monthly parking rate in the downtown area. The license rate is proposed to be
$10,920 per month ($130 per space), licensee will pay the rate on a monthly basis and
the rate will be subject to an annual adjustment of three percent. The license would be a
net license with the licensee responsible for property maintenance, utility charges, and
any associated taxes or assessments. Since the licensee will be responsible for the
management and maintenance of the property during the term of the license there will
be no staffing costs for the City in managing this parking use. Staff anticipates applying
for a building permit for the construction of the fire station in spring 2015, with
construction starting later that year, at which time the license. agreement would be
terminated.
The proposed license agreement would enable the City to generate parking revenue
from the 7th Street Property during the interim period, without taking on additional
responsibilities related to maintenance and operations. The proposed agreement would
also enable the City to access the 7th Street Property for surveys and other investigatory
purposes related to the construction of the, fire station.
2
Financial Impacts & Budget Actions
The Parking License Agreement for the property located at 1337 -45 7th Street will
generate annual revenues of $98,280 for FY 2013 -14 and $67,485 for FY 2014 -15.
Revenue budgets will be established at account 01263.400770 to reflect receipt of
revenues for FY 2013 -15.
Prepared by: Elana Buegoff, Sr. Development Analyst
Approved:
Andy Agle, Director !
Housing and Economic
Forwarded to Council:
3
Rod Gould
City Manager
Reference:
Contract No. 9765 (CCS)