City of Alexandria, Virginia
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MEMORANDUM
DATE: JUNE 19, 2017
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of a Proposal to Modify and Extend the Public Parking Agreement at 115 South Union Street to 2047. (This item is not a public hearing item.)
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ISSUE: Consideration of a proposal to modify and extend the 1987 public parking agreement at 115 S. Union Street with 115 South Union CMB-GME, LLC, the current owner of 115 S. Union St.
RECOMMENDATION: That the City Council authorize the City Manager to enter into an amendment to the agreement dated January 16, 1987 between 115 South Union CMB-GME, LLC, successor in interest to Bloomvale, Inc., and the City of Alexandria to modify and extend that public parking agreement through 2047 to protect and enhance the public’s long term access to parking at 115 S. Union St.
BACKGROUND: In 1987, the City of Alexandria entered into a public parking agreement with the developer of 115 S Union St. to construct an additional eighteen (18) parking spaces as part of a new office building project. This agreement required the building owner to set aside thirty-eight (38) parking spaces for hourly, transient, and daily parking at all times and make all one hundred (100) parking spaces available for hourly and transient parking on nights and weekends in exchange for $200,000 (about $438,000 in today’s dollars) from the City of Alexandria. Without action by the City, this agreement will expire in 2027.
The conversion of 115 S. Union St. from an office building to a boutique hotel will change the utilization of the parking garage, requiring an amendment to the parking agreement. This change of building use also gives the City the opportunity to extend this agreement and protect the access to public parking for a significantly longer term.
In the proposed new agreement, building ownership will agree to amend the current public parking agreement with the City of Alexandria, extending the term through December 31, 2047, or for an additional twenty years. This amended agreement shall designate that any existing parking spaces in excess of those required for the hotel use be available to the public for paid hourly, daily, and monthly transient parking seven days a week. Staff estimates that at full hotel occupancy, sixty-five (65) spaces will be open to the public per this agreement, and when the hotel is at less than full occupancy, the number of spaces available to the public will exceed 65 spaces.
In exchange for the extension of the public parking agreement, the City agrees to pay 115 South Union CMB-GME, LLC Seventy Thousand Dollars ($70,000) annually for ten (10) years beginning the calendar year after the hotel’s receipt of their Certificate of Occupancy. The extension of the public parking agreement will also require that the owners invest at least $8 million upgrading the building into a hotel (the property owners project spending approximately $9 million to upgrade the building into a hotel), and that the hotel be marketed and operated by a first-class hospitality group.
FISCAL IMPACT: It is proposed that the City provide $700,000 total, which would be paid as $70,000 per year for ten years. These payments hold a net present value of $446,000 in today’s dollars should payment begin in 2020. The real estate and hotel occupancy taxes from the proposed hotel at 115 S. Union St. will generate more than the dollars needed to pay for this parking extension.
ATTACHMENT: Term Sheet.
STAFF:
Stephanie Landrum, President and CEO, Alexandria Economic Development Partnership
David Remington, Director, Alexandria Economic Development Partnership