CITY COUNCIL ACTION REQUEST
Department(s):
Transportation
CEQA:
Not a Project, File No.
PP17-003, Agreements
and Contracts (New or
Amended) that will
result in no physical
changes to the
environment.
Coordination:
CAO and CMO - Budget
Office
Dept. Approval:
/s/ John Ristow
Council District(s):
3 CMO Approval:
05/26/22
SUBJECT: AMENDMENT TO LEASE AGREEMENT BETWEEN CITY AND BP ALMADEN
ASSOCIATES LLC FOR THE ALMADEN/WOZ PARKING LOT
RECOMMENDATION:
Adopt a resolution authorizing the City Manager or designee to negotiate and execute a Fifteenth Amendment to the Lease Agreement with BP Almaden Associates LLC (Landlord) for the lease of the Almaden/Woz parking lot to extend the term, reduce the lease rate, and allow Landlord access to a portion of the lot.
BASIS FOR RECOMMENDATION:
The City of San José (City) has an existing lease agreement with the Landlord, originally executed in 2001, for the parking lot commonly referred to as the Almaden/Woz lot adjacent to the San José McEnery Convention Center. This agreement has been amended 14 times over the years to extend the term, and staff is again recommending the execution of an amendment to extend the term, lower the lease rate, and allow Landlord access to a portion of the lot for construction staging or parking.
Lease Term
The current lease term expires on June 30, 2022. This parking lot provides key parking inventory to the surrounding area, including City venues like the San José McEnery Convention Center, Children’s Discovery Museum, Discovery Meadow, Center for the Performing Arts, and San José Civic. Extending the term will provide the City control of the lot and provide ongoing public parking access for these venues and for general public parking.
Lease Rate
The current fixed monthly lease fee is $39,415. Prior to the pandemic, the parking revenues exceeded the lease and direct operational costs and generated net revenues of approximately $700,000 annually accruing to the General Purpose Parking Fund. Revenues have decreased significantly due to the loss of event activity at the surrounding venues with the lot generating a loss of approximately $900,000 since the onset of the pandemic in March 2020.
Staff has engaged with Landlord to negotiate a reduced lease rate structure, which includes a fixed fee of $10,000 per month plus 25% of gross revenues. Based on current activity, it is anticipated that this lease structure will save the City over $200,000 in fiscal year 2022-2023 versus the existing fixed fee structure.
Future lease costs will be dependent on parking activity and revenues. Staff estimates that if pre-pandemic revenue levels return, the overall lease fee will be similar to the fixed fee term currently in place.
Landlord Access
As the parking lot is a privately owned redevelopment site, Landlord requested that the amendment include the ability for the Landlord to secure a section of the lot for construction staging or parking in the event access is needed prior to the eventual full redevelopment of the site.
COUNCIL AGENDA: 6/7/2022
FILE: 22-841
ITEM: 2.27
Climate Smart San José: The recommendation in this memorandum has no effect on Climate Smart San José energy, water, or mobility goals.
Commission Recommendation/Input: No commission recommendation or input is associated with this action.
COST AND FUNDING SOURCE:
The General Purpose Parking Fund will continue to fund the lease expense for this agreement estimated to be approximately $200,000 in fiscal year 2022-2023.
FOR QUESTIONS CONTACT: Arian Collen, Parking Manager at 408-975-3246