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LEASES WITH CALTRANS FOR THREE AREAS UNDER THE CROSSTOWN FREEWAY
recommended action
RECOMMENDATION
It is recommended that the Parking Authority Board adopt a resolution:
1. Authorizing the execution of the 2016 Lease, Lease Area No. 10-SJX004-0500-02 , State of California, Department of California (Caltrans) between the City of Stockton (Tenant) and the State of California, acting by and through its Department of Transportation (Landlord); and
2. Authorizing the execution of the 2016 Lease, Lease Area No. 10-SJX004-0600-02, State of California, Department of California (Caltrans) between the City of Stockton (Tenant) and the State of California, acting by and through its Department of Transportation (Landlord); and
3. Authorizing the execution of the 2016 Lease, Lease Area No. 10-SJX004-0900-03, State of California, Department of California (Caltrans) between the City of Stockton (Tenant) and the State of California, acting by and through its Department of Transportation (Landlord); and
4. Approving the filing of Notice of exemption No. CE011-16 under CEQA; and
5. Authorizing the City Manager, or his designee, to take all the necessary and appropriate actions to carry out the purpose and intent of this resolution.
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Summary
The City has leased three parking areas under the Crosstown Freeway from Caltrans for the last ten and twenty years. (Original Resolution No. 97-0230 - Attachment A and 06-0514 -Attachment B.) The current leases are as follows:
|
Location |
Lease Area No. |
Common Name |
Expiration |
Proposed Lease Included As |
|
Hwy 4, Between Center /El Dorado St. |
10-SJX004-0500-02 |
PD Lot |
7/31/2016 |
Attachment C |
|
Hwy 4, Between El Dorado and Sutter St. |
10-SJX004-0600-02 |
O & N Lots |
7/31/2016 |
Attachment D |
|
Hwy 4, Between Sutter and American St. |
10-SJX004-0900-03 |
R Lot |
9/31/2016 |
Attachment E |
Aerial and vicinity maps of the areas described above, are included as Attachments F and G.
Staff recommends entering into new leases for the continued use of these lots. Combined, the lots account for 1175 spaces of the City’s parking inventory, roughly 30%. Without the ability to program and use these lots, the City would be hard pressed to meet the parking needs of the developing downtown and Police Department (PD) fleet.
DISCUSSION
Background
Since June 21, 1976, the City has leased the area under Highway 4, between Center and El Dorado Streets. This 72,736 square foot area is currently operated by PD, and is used for the parking of emergency vehicles. The original agreement authorized a 10-year lease, with options to extend for two 5-year periods, which were exercised. The current lease has a term of twenty years, beginning August 1, 1996, and expiring July 31, 2016.
Since June 21, 1976, the City has leased Lots O and N under Highway 4, between El Dorado and Sutter Streets, encompassing 286,191 square feet. One area is used by PD, and the other area is operated by the Parking Authority (PA), previously known as Central Parking. The PD-operated lot that is bounded by El Dorado Street and split at Hunter Street, is used for PD staff parking. The PA-operated lots that are bounded by Hunter and Sutter Streets, are used for monthly and transient (hourly) parking. The monthly parkers include San Joaquin County employees, FOODPRO International, Inc. employees, as well as other local office and restaurant business owners. The original agreement authorized a 10-year lease, with options to extend for two 5-year periods, which were exercised. The current lease has a term of twenty years, beginning August 1, 1996, and expiring July 31, 2016.
Since November 1, 1979, the City has leased the area (Lot R) under Highway 4, between Sutter and American Streets. This 149,081 square foot area is currently operated by PA, and is used for monthly parking. These monthly parkers include, but are not limited to, employees of San Joaquin County, El Concilio, the Record, and Lincoln Training Center. The current lease has a term of ten years, beginning October 1, 2006, and expiring September 31, 2016.
In December 2013, the Council approved Resolution 2013-12-17-1209 which established the Parking Authority of the City of Stockton to operate the parking facilities within the City (Attachment H). The Parking Authority was established to both protect the general fund and to improve the quality and efficiency of parking operations with automation and facility improvements.
In September 2014, the Parking Authority (PA) issued a request for proposals for Operations and Management Services in the Downtown Parking District. A selection committee reviewed proposals, conducted interviews, and selected SP Plus Corporation (“SP+”) as the contractor best able to meet the needs of the City and the Parking Authority. The term of the management agreement between PA and SP+ began on April 1, 2015, and ends on March 31, 2020, with an option of two additional one (1) year extensions and/or extended on a month-to-month basis, not to exceed eighteen (18) months.
Present Situation
The leased parking lots are an important part of meeting the parking needs for downtown. Staff is currently developing a Parking Masterplan for the City and continued use of these lots is critical in ensuring the overall supply is available for users. Therefore, the Parking Authority desires to continue using the three leased locations, to be operated by the Police Department and SP+, and would like the City to enter into three new leases for a twenty-year period for each lease. The subject leases will have the following terms:
• 10-SJX004-0500-02: August 1, 2016 - July 31, 2036
• 10-SJX004-0600-02: August 1, 2016 - July 31, 2036
• 10-SJX004-0900-03: October 1, 2016 - September 31, 2036
All three of the current leases with Caltrans include a minimum monthly rent payment that is subject to an annual or bi-annual increase, based on the Consumer Price Index (CPI). The proposed leases include a fair market value for the rent amount that was determined by a Caltrans appraisal. The appraisal is in line with current market values that City staff have observed in the area.
Given that Caltrans cannot negotiate market rent less than the fair market rent determination, staff has determined that the rate increases are reasonable and can be absorbed within the current operating budgets. The rental amounts for the leases are as follows:
Lot Current Monthly New Monthly Annual Increase
• PD Lot $2,346 $2,550 $2,448 8.7%
• N&O Lots $9,374 $10,000 $7,516 6.7%
• R Lot $4,745 $4,770 $300 1.0%
While the intent of entering into these leases is to carry them out for the full term of each lease, should budgetary or other circumstances change, the City may terminate said lease and financial obligation with a 30-day written notice.
NOTIFICATION
The Charter of the City of Stockton and Government Code do not provide for a noticing requirement for this action. Notification is not required.
ENVIRONMENTAL CLEARANCE
It has been determined by the Community Development Department that this action/project is exempt from the requirements of the California Environmental Quality Act (CEQA) and is granted a “Categorical Exemption” under Article 19 and, specifically, by Section(s) 15327, Class 27 of the State CEQA Guidelines. A copy of said determination is included as Attachment I.
In accordance with Section 65402 of the Government Code, the Community Development Department further determined that this activity/project conforms to the City’s General Plan Policy Document, as amended.
FINANCIAL SUMMARY
PD Lot
The rent is $30,600 per year, or $2,550 per month. The rent is paid directly from the PD budget (010-2413-530).
O & N Lot
The rent is $120,000 per year, or $10,000 per month. The rent is paid from the Parking Authority account (418-4020-571).
R Lot
The rent is $57,240 per year, or $4,770 per month. The rent is paid from the Parking Authority account (418-4020-571).
New rates were anticipated and included in the FY 2016-2017 budget. The current combined revenues generated by these lots exceed expenses by nearly $200,000, which is also included in the FY 2016-2017 budget.
Attachment A - Resolution No. 97-0230
Attachment B - Resolution No. 06-0514
Attachment C - Lease Area No. 10-SJX004-0500-02
Attachment D - Lease Area No. 10-SJX004-0600-02
Attachment E - Lease Area No. 10-SJX004-0900-03
Attachment F - Aerial Map
Attachment G - Vicinity Map
Attachment H - Resolution 2013-12-17-1209
Attachment I - Notice of Exemption