Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: DOWNTOWN PARKING LOT LEASE RENEWAL
Date: September 23, 2025
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council adopt a resolution authorizing the City Manager to execute an amendment, with the terms described herein, to temporarily extend the lease for public parking in the downtown parking lot, amend the budget to account for the remaining fiscal year of lease payments, and to direct staff to place an item on the future agenda at mid-year to consider adding parking management as a project on the City’s workplan.
Background
The property currently utilized for public parking behind Shige, Hines Signs, and Cotati Coffee is privately owned and has been leased by the City for public parking since 2000. The majority of the property is owned by the property owner who owns the buildings that house the abovementioned businesses, as well as Tip Top Cleaners. A smaller portion of the public parking area is owned by the adjacent property owner, namely the parking spaces located against the former Friar Tucks. The approximate property lines are indicated in Exhibit B on the attached lease agreement.
It’s the staff’s understanding that prior to the year 2000, the lot was unimproved but was generally used by patrons of the businesses on these properties. Around this time, the City constructed new sidewalks through downtown that this property owner claimed exacerbated drainage issues in this unimproved parking area. To address this issue, the City offered to use Redevelopment Funds to improve the parking area on this private property in exchange for a 25- year lease for public parking. After the parking lot was constructed, the City maintained the parking lot, including signage, policing, pavement and striping maintenance. This lease expires on October 1, 2025.
Analysis/Discussion
A couple of years ago, staff reached out to the majority property owner to inquire about extending the lease agreement. The property owner, at that time, was not interested in discussing a lease extension because they were listing the property for sale. The property failed to sell, and it was subsequently taken off the market.
In August, the majority property owner reached out to the City to inquire about extending the lease. However, the majority property owner stated that they had done research on the lease cost of other private properties leased for public parking and $2,000 per month was a discounted rate that they would lease it to the City for. The rationale stated was that they have to pick up garbage in the lot and repair buildings that get hit by vehicles in the parking lot. Additionally, this property owner stated that they are re-listing the property for sale, so they wanted to keep the term month to month. Staff stated that the City has no funding for this, and the owner suggested that the City should meter or charge users for parking passes to raise the needed funding.
According to the property owner, their businesses (Cotati Coffee, Shige, Hines Signs, Tip Top, etc.) only needed 10 spaces, and they would put out barricades, etc to block off the other parking spaces if the City was not interested in the lease extension.
City staff also contacted the minority property owner (the building that formally housed Friar Tucks) and they were good with extending the parking lease as-is, as they believed it benefited their businesses as well as the downtown area generally.
Setting up a parking program, as suggested by the majority property owner, requires extensive public outreach to the business community to discuss options and develop a consensus on the best solution. This is not something that can be done in a couple of months. Therefore, to avoid the possibility of a sudden disruption in parking downtown, City staff discussed various options with the majority property owner. However, the majority property owner insisted on lease payments and the City ultimately negotiated to $1,800 per month with a 90-day termination clause by either party for any reason.
Staff recognizes that this is only a short-term solution. The City does not have the resources to continue this unfunded arrangement long-term. Therefore, it’s recommended that the City discuss parking management at mid-year as a possible new project, as the importance of this conversation is accelerating. Changes in State law to accelerate housing creation have elevated parking as an issue that is expected to become more acute over time. Additionally, the loss of downtown parking behind the ReMax building downtown, other complaints about parking in the downtown area, as well as existing parking issues on Santero Way suggest that a conversation about parking will be needed sooner rather than later. In addition to physical parking places, this includes conversations about parking management strategies, transportation options and of course funding to implement any solutions.
Financial Considerations
The proposed lease amendment would require $1,800 per month from the General Fund. Staff are proposing the attached budget amendment to appropriate $16,200, to cover the remaining fiscal year, from the General Fund as proposed expenditures in the Public Works Streets Department.
The City does not have the funding to continue this arrangement. Therefore, it is only a shortterm solution to preserve the existing downtown public parking until a more comprehensive discussion on parking can be held.
Environmental Issues
Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review.
This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.