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Home My WebLink About12/20/1988, C-7 - CONSIDERATION OF AGREEMENTS WITH L&H INVESTMENTS, THE CHARLES FORD COMPANY, MASONIC HALL ASSOCIATION, AND CLINIC PROPERTIES PARTNERSHIP FOR MARSH STREET PARKING STRUCTURE I1111l�l 11$111X I v3' T MEETING DATE M II II _� c� o san lugs os�spo 12�20�88 COUNCIL AGENDA REPORT �'�" FROM: David F. Romero Wayne A. Peterson Prepared by: Candace Havens Public Works City Engineer City Parking Consultant Director SUBJECT: Consideration of Agreements with L&H Investments, the Charles Ford Company, Masonic Hall Association, and Clinic Properties Partnership for Marsh Street Parking Structure CAO RECOMMENDATION: Adopt resolutions approving the agreements, and authorize staff to execute the agreements, to proceed with property acquisitions, and record documents. SUMMARY The Council is requested to approve four agreements in connection with the City's Marsh Street Parking Structure: 1. an agreement to acquire property from L & H Investments at the corner of Chorro and Marsh Streets for $450 thousand plus a $9000 option fee; 2 . a lease of the retail space to Riley's Department Store (Charles Ford Co. ) ; �3. an agreement with Masonic Hall Association granting an encroachment over City property, relocating an emergency exit and obtaIrxing a construction easement; 4 . an agreement with San Luis Medical Clinic to redevelop a parking lot and obtain a small piece of land. Plans and specifications for the parking structure will come to the Council in January with construction to begin Spring 1989 . SIGNIFICANT IMPACTS The agreements would commit the City to spend about $470 thousand primarily for acquisition of property necessary for construction of the parking structure. The lease obligates the City to provide retail space to Riley's for 19 - 39 years. C- 7 I��n�� IIIIIpUp j�l��► city of san tins oBispo COUNCIL AGENDA REPORT Council Agenda Report Page Two CONSEQUENCE OF NOT TAKING RECOMMENDED ACTION If purchase of Riley's parking lot is delayed, construction of the structure also will be delayed and could result in loss of bond revenues unless special arrangements with the bonding agency are made to expend funds beyond June 1989. Failure to reach an agreement on lease rates is not critical to construction scheduling but would result in loss of revenue upon which the Parking Fund depends if not resolved prior to completion of the building. If the San Luis Medical Clinic Property is not acquired, the driveway entrance to the structure would still function but without as smooth a transition into the surface lot and structure and without a landscape buffer between adjacent properties. If the Council does not wish to approve the proposed agreement with the Masonic Hall Association and wishes to proceed with construction of the Parking Structure as proposed, it could require the Association to remove the fire escape at its expense and to provide alternative fire exiting which meets the current building code. The Association could revoke its agreement to allow City access onto its property for building construction and maintenance. I ��►�►�uu�IIIII��P ��U�ll city of San tins OBISPO HIM COUNCIL AGENDA REPORT Council Agenda Report Page Three DISCUSSION: In relation to the construction of the Marsh Street Parking Structure, staff has met with adjacent property owners to discuss features of construction of this project which affects them. Below are summaries of agreements which staff has negotiated with property owners. Actual agreements are available in the Council Office. L & H Investments A portion of the land upon which the structure is proposed to be built is currently owned by L&H Investments. The property owners have agreed to sell this land to the City for construction of a parking structure which includes retail space for Riley's Department Store. The negotiated purchase price is $450, 000 with a $90'00 option, which would be paid from bond proceeds and repaid by the Parking Fund. Charles Ford Company The Charles Ford Company, new owner's of Riley's Department Store, wishes to occupy all available retail space (about 15, 000 square feet) in the Marsh Street Parking Structure. The proposed lease agreement establish base rents which increase over the term of the lease. It also provides for increased rents to the City based on increases in gross sales revenues. Thus, if the business prospers, Riley's and the City both will benefit. In any event, the base rent will contribute a positive cash flow to the parking program (see rent schedule attached) . The term of the agreement is about 19 years with two ten-year options. Masonic Hall Association The Masonic Temple is a four-story building located on Marsh Street between the proposed structure and its entry. The fire escape on the rear of the building extends over city property and must be relocated prior to construction as proposed. The agreement states that the City will pay for its relocation and allow for it to encroach over city property. The Masonic Hall Association has agreed to maintain the fire escape and allow it to be used only for emergency exiting. The estimated cost of relocation is about $6, 500. On the westerly side of the Masonic Temple between the Temple and the new structure is a 10-foot wide strip of land owned by the Masonic Hall Association (see attachment) . The Association has �lu►rl►�H��VI111111111 ��111 city of San Luis OBlspo COUNCIL AGENDA REPORT Council Agenda Report Page Four agreed to allow the City access onto this property for construction and maintenance of the parking structure provided the City repairs any damage caused by such activities and that it provides lighting to this space. The term of this agreement is for five years beginning on the recording of the agreement and automatically renewable for five year terms unless either of the parties requests termination in writing one year before the renewal date. Clinic Properties Partnership San Luis Medical Clinic Properties Partnership owns a parking lot facing Pacific Street which borders the easterly side of the surface parking lot and City Recreation Department Building. Their property juts into a portion of the driveway entrance into the structure, narrowing the entry and constricting possible turning movements into the structure (see attachment) . The Agreement states that the City will acquire a corner of their property in exchange for improvements to their parking lot. According to the Agreement, the City will resurface the existing parking lot and restripe it for 24 parking stalls. The driveway ramp onto Pacific Street and a power pole in the lot will be relocated to allow for optimal use of the land for parking. Drought tolerant landscaping and a street tree will be planted along the street frontage and vines planted next to a new, low fence along the Clinic's westerly property line (adjacent to the City lot) for screening and visual relief on the lots. The City will be responsible for establishing the landscaping established (for six months) and the Clinic will be responsible for its maintenance thereafter. The City also agrees to allow the users of the Clinic lot to access their property from the Marsh Street driveway which leads to the parking structure and to pay for recording and closing costs; escrow will close prior to completion of construction of the parking structure. The value of this parcel of land and the cost of improvements are estimated to be about equivalent. Lot Line Ad'ustment City-owned property on this block is divided into several small parcels which should be consolidated prior to occupancy of the structure. If the Council agrees to purchase Riley's parkin lot i�IlliII�IIII�IIIIIIIII�I�INpIIIIUIII city Of San LUIS OBISPO COUNCIL AGENDA REPORT Council Agenda Report Page Five and/or the corner of the San Luis Medical Clinic parking lot, staff will proceed with consolidation of lot lines into one parcel in accordance with terms of Agreements. FISCAL IMPACT The program to construct two parking structures is financed with about $6 million of bond proceeds, a $1. 25 million contribution from the County, and about a $1.5 million balance in the Parking Fund. The expenditure for land acquisition was programmed and is within the budget. The revenue from the lease will provide a positive contribution to the parking fund (revenue in excess of the costs of producing the leased space) . ALTERATIVES Option 1. Review and approve Agreements, with or without changes, and direct staff to proceed with completing arrangements for purchases of land and consolidation of properties (Staff-recommended action) . Option 2 . Review Agreements and do not approve one or more of the them. Staff asks the Council give direction to staff as to issues it wishes to be addressed prior to reconsideration by the Council. CONCURRENCES The City Attorney has approved all agreements. ACTION RECOMMENDED: Adopt resolutions approving agreements, and direct staff to execute agreements, acquire the properties, and record documents. Attachments: Lease Payment Schedule (Full Agreements in Council Office) Masonic Lodge Site Plan Medical Clinic Site Plan Resolutions (4) CH/marshcc2 V31/88 Draft LEASE SCHEDULE Period of Term Rate A. Beginning to January 31, 1992 $7,500 a month or 4.5% of annual gross sales B. February 1, 1992 to January 31, $8,200 a month or 4.75% of 1997 annual gross sales C. February 1, 1997 to January 31, $8,900 a month or 4.85% of. 2002 annual gross sales D. , February 1, 2002 to January 31, $9,600 a month or 4.90% of 2008 annual gross sales First ten (10) year option E. February 1, 2008 to June 30, $10,300 a month or 4.952 of 2010 annual gross sales F. July 1, 2010 to January 31, $10,500 a month or 5.00% of 2013 annual gross sales G. February 1, 2013 to January 31, $11,000 a month or 5.00% of 2018 annual gross sales The rate show in the above schedule shall be the greater of the flat monthly rent ("Minimum Rent") or the percentage of annual gross sales. Annual gross sales as defined below. The rent rate for the second ten (10) year option period shall be at market rate as mutually agreed upon by the parties. ;AS COMPANY c27 r \ i.y MASONIC �� 'I LODGE i -- 28 w ?' APN w APN -5 `i ZT- 19 :�-5 Z-7 a: �.. . cc . I n C o r U t O O O ❑ O ❑ 0 .o t t ® o o a o o a o 0 t , UP 2 6 6 6 6 i --24 woo CHORRO S C-1 HoOB-Y 8�/ 57Z I Pz DC.�°�lBr�J OfiP.2G7°�QT�f � :tib' vvv 24 SPAces 14 f+[.� �R�UERRGF�SlZE QP 8.30 ' x 18.40') f} AND ✓/NE PRRKI M6: LaT WR�K 1 14 P6WER POLE ?e-Ao-1071 r--A- l 2 N f4 R C T, := . . . PLAN T.eEE' �� . `.• , G A•vo s EAPrv4 f ��o P�9GFic 5�cET RESOLUTION NO. (1988 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN IDIS OBISPO APpFMING AN AGREEME?r BEWEEN THE CITY AND L & H INVES'IIHEN`I'S FOR PURCHASE OF REAL PROPMUY AT 871 MARSH STREET IN SAN LUIS OBISPO BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. That certain agreement, attached hereto marked Exhibit "A" and incorporated herein by reference, between the City of San Luis Obispo and L & H Investments, for purchase of real property at 871 Marsh Street for purposes of building a parking structure is hereby approved and the Mayor is authorized to execute the same. SECTION 2. The City Clerk shall furnish a copy of this resolution and a copy of the executed agreement approved by it to: L & H Investments and City Parking Program Coordinator as set forth in the agreement. On motion of , seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of ► 1988. MAYOR RON DUNIN ATTEST: PAM VOGES, CITY CLERK coo v�� Resolution No. (1988 Series) Page Two Ci inistrative Officer City Attorn Public Works Dire r Finance Director RESOLUTION NO. (1988 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING AN AGREEMENT BETWEEN THE CITY AND CHARLES FORD COMPANY FM TE[M OF LEASE OF CONQRCIAL RETAIL SPACE IN MARSH SZR2EET PARKING SZRJCTURE AT 871 MARSH SIR2EET BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. That certain agreement, attached hereto marked Exhibit "A" and incorporated herein by reference, between the City of San Luis Obispo and the Charles Ford Company for lease of approximately 14, 000 square feet of commercial retail space in the Marsh Street Parking Structure at 871 Marsh Street, is hereby Approved and the Mayor is authorized to execute the same. SECTION 2. The City- Clerk shall furnish a copy of this resolution and a copy of the executed agreement approved by it to: The Charles Ford Company and the City Parking Program Coordinator as set forth in the agreement. On motion of , seconded by , and on the following roll call vote: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of , 1988. MAYOR RON DUNIN ATTEST: PAM VOGES, CITY CLERK Resolution No. (lbvd Series) _ Page Two 'ty A inist ative Officer zI City At me Public ork rector Finance Director CH/resolu2 RESOLUTION NO. (1988 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBTSPO APPROVING AN AGREEMENT BETWEEN THE CITY AND THE MASONIC HALL ASSOCIATION FOR ACCESS TO CI'T'Y PROPERTY AT 871 MARSH STREET AND RIIOCATION OF A FIRE ESCAPE AT 859 MARSH STREET BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. That certain agreement, attached hereto marked Exhibit "A" and incorporated herein by reference, between the City of San Luis Obispo and the Masonic Hall Association for relocation of a fire escape on the outside of the Masonic Temple at 859 Marsh Street and for city use of a strip of land on the same property for access to city property at 871 Marsh Street, is hereby approved and the Mayor is authorized to execute the same. SECTION 2. The City Clerk shall furnish a copy of this resolution and a copy of the excecuted agreement approved by it to: the Masonic Hall Association and the City Parking Program Coordinator as set forth in the agreement. On motion of , seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of , 1988. MAYOR RON DUNIN ATTEST: PAM VOGES, CITY CLERK Resolution No. (19 Series) Page Two ty A nistrative Officer City Att ey Public Directo Finance Director CH/resolu3 bw c- J^IAI RESOLUTION NO. (1988 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING AN AGREEMENT BETWEEN UM CITY AND C ZINIC PROPERTIES RSR REDEVELOPMENT! OF A PARING IDT AND ACQ[J 1T'ION OF REAL PROPERTY BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. That certain agreement, attached hereto marked Exhibit "A" and incorporated herein by reference, between the City of San Luis Obispo and Clinic Properties, for redevelopment of a parking lot and acquisition of real property is hereby approved and the Mayor is authorized to execute the same. SECTION 2. The City clerk shall furnish a copy of this resolution and a copy of the executed agreement approved by it to: Clinic Properties and City Parking Program Coordinator as set forth in the agreement. On motion of , seconded by , and on the following roll call vote: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of 1988. MAYOR RON DUNIN ATTEST: PAM VOGES, CITY CLERK Resolution No. (1 Series) Page Two ity A nistrative Officer City Attor y w Public Works Di or Finance O&eKor CH/resolu4