AGENDA #4i

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Amendment of Parking Lease with FGI for Reduction in Number of Leased Spaces

 

DATE:             January 14, 2002

 

INTRODUCTION

 

The attached resolution would authorize the Manager to publish a notice of the Council’s intent to authorize execution of an amendment to our agreement with FGI, a marketing services firm in Chapel Hill, for a reduction in the number of leased spaces in Town Parking Lot #5 on the corner of West Rosemary and Church Streets.

 

BACKGROUND

 

FGI is a Marketing Services Company employing about 200 people, currently located on West Franklin Street. FGI has been leasing 104 parking spaces in Town Lot #5 since January 1994.

 

The entrance to the leased portion of Lot #5 is at 108 Church St.  There is a card access reader, installed and maintained by FGI, and an access control gate owned and maintained by the Town of Chapel Hill.  Parking in the leased portion extends from the entrance lane, south toward Franklin Street.  The exit for the leased portion of the lot is at the northeast end of the lot with an access control gate and a concrete barrier leading into the public metered parking portion of the lot.  FGI currently uses approximately 70 of the 104 available spaces on the south end of the lot.  Parking Lot #5 contains 170 spaces.  There are 66 spaces in the portion of Lot # 5 provided for public parking.  The public entrance is at 141 W. Rosemary St.  There are 65 metered spaces and one handicap parking space. 

 

In November 1998, at the request of FGI, 9 additional spaces were added to the FGI lease.  The lease was in effect until June 30, 2000.  The term of the agreement was extended for six months and remained effective through December 31, 2000, to allow FGI time to assess the parking needs of the organization.  The lease agreement allows for two additional two-year periods.  At their request, the number of parking spaces was reduced to the original 104, effective April 1, 2001.

 

As required by State Statute, N.C.G.S. 160A-272, notice of the Council’s intent to authorize such a lease agreement must be published in a local newspaper, so that interested parties may comment on, or petition the Town regarding this matter.

 

DISCUSSION

 

FGI management has requested further reduction in the number of leased parking spaces from 104 to 70.  The 70 spaces would still be used as parking for FGI employees.  The remaining 34 spaces would be available to lease by the Town to other interested parties.  The current lease agreement contains a provision allowing extensions for two additional two-year periods.  The lease also provides for termination by either party upon 180 days notice.  FGI pays $65 for each space, which is the Town’s adopted monthly rental rate.

 

This lease agreement has been beneficial to both FGI and the Town.  It has provided parking for FGI while generating revenue for the Town from what would otherwise have been an underutilized resource.  FGI management has indicated its desire to continue to lease up to 70 spaces in this lot.  Also because of their multiple shift operations, they still need access beyond the normal 8:00 am to 5:00 pm business period.

 

Given the configuration of the facility we believe it would not be easy to reduce the area of the lot that has access limited to cardholders.  We believe termination of the FGI lease would not be the best choice.  We estimate that hourly demand in the short-term would not be sufficient to maximize the use of the lot.  Discussions with FGI indicate they have a critical need for such rental parking.

 

We propose that the Town continue with the current lease arrangement with FGI.  FGI would lease 70 parking spaces.  The Town would make available the remaining 34 spaces for monthly rental to other interested parties.

 

RECOMMENDATION

 

That the Council approve the following resolution, which would authorize the Town Manager to publish a notice of the Council’s intent to amend the agreement with FGI for the lease of spaces in Town Lot #5.

 

A RESOLUTION AUTHORIZING THE MANAGER TO PUBLISH A NOTICE OF INTENT TO AMEND AN AGREEMENT TO LEASE UP TO 70 SPACES WITH FGI (2002–01-14/R-9)

 

WHEREAS, The Town owns and operates Parking Lot #5 on the corner of West Rosemary and Church Streets, which has both hourly and monthly spaces available; and

 

WHEREAS, FGI is leasing 104 parking spaces in this lot and has requested that the Town amend the agreement to reduce this number to 70 spaces, the number of spaces for the use of employees of FGI; and

 

WHEREAS, the Town would retain the 34 spaces in Parking Lot #5 on the corner of West Rosemary and Church Streets, which could be made available as monthly rental spaces to other interested parties;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to publish a notice of the Council’s intent to authorize an amendment to the agreement with FGI, dated May 1, 1997, for the lease of 70 parking spaces at Town Lot #5 at its January 14, 2002, meeting to extend the term of the current agreement to remain effective through December 31, 2002.

 

This the 14th day of January, 2002.