AGENDA #4e

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:       Extension of Short-Term Lease of Parking Spaces at Pritchard Park to the Siena Hotel

DATE:             May 29, 2002

The attached resolution would authorize the Manager to extend the current 11 month lease of parking spaces on the Town’s Pritchard Park property to the Siena Hotel on a month-to-month basis until such time as the Council may decide broader issues related to the use of Pritchard Park property.

BACKGROUND

In 1996 the Town began the planning process to develop the Pritchard Park program.  The process was halted in April 1996 when the owner of the Siena Hotel petitioned the Council to consider leasing or selling a portion of the park property to the Hotel. In 1997, the Council decided to postpone a decision until after completion of a concept plan for the park.

A Pritchard Park Conceptual Plan Committee was formed. On November 27, 2000 the Council adopted the Report of the Pritchard Park Conceptual Plan. At that time the Council authorized the Manager to complete a plan for development of an art garden and to involve the Chapel Hill Public Arts Commission, the Library Board, and the Parks and Recreation Commission.

The Pritchard Park Art Garden Committee started its work in January 2002 and completed its Report in March 2002. The Committee consisted of 2 members each of the Public Arts Commission, the Library Board, and the Parks and Recreation Commission. The Committee investigated a variety of options for designing the proposed art garden including options that involved a partnership with the Siena Hotel and options that did not involve the hotel. The Committee voted unanimously (6-0) to recommend that the Town partner with the Siena Hotel in a manner that would allow a seamless transition between the designs of the two properties, provide funding for the Town’s park and art project, and allow the Siena Hotel to address its parking needs. We expect to present the Committee’s report to the Council in the fall after the staff completes financial negotiations with the Siena Hotel.

DISCUSSION

For several years the Siena Hotel informally used the Town’s park property for staff and guest parking. On November 27, 2000 the Council authorized the Manager to enter into negotiations with the Siena Hotel to discuss the use of Town property by the Hotel, including financial terms, size of leased area, potential art garden, security, maintenance, involvement in the planning process, and other relevant issues. The Council also authorized the Manager to execute a short-term lease to temporarily address the use of Town property until such time as the Council could consider options.

An eleven month lease of 25 parking spaces on Town property was negotiated at a price of $55 per space. The price was set at $10 less than downtown lots because of the following conditions:

• Our research indicated that $55 was a fair market price for parking spaces in similar locations.
• The parking area is gravel instead of paved.
• The Siena Hotel is responsible for maintenance of the parking lot, security, and lighting.

We believe that we may be able to bring a full report and recommendations to the Council shortly after the Council’s summer break. However, at this time the short-term lease has expired and must be extended if the Siena Hotel is to continue using the parking spaces until the Council can take action on the broader proposal.

Currently, the primary terms of the agreement are:

1. The lease was for an eleven month term.

2. The leased premises included 25 parking spaces for use by patrons and staff of the Siena Hotel.

3. The Siena Hotel maintained the leased premises, including the surface, plantings and buffers of the lot.

4. The Siena Hotel provided all lighting and security patrols that it deemed necessary.

5. The Siena Hotel assured that parking would occur only in designated spaces.

6. The Siena Hotel provided adequate insurance.

7. Monthly payments of $1,375 were made by the Siena Hotel to the Town. 

We propose to continue the same terms with two exceptions:

· The lease would be renewed on a month-to-month basis.

· The price structure would be altered to reflect changes in lease rates of parking spaces on other Town lots.  The current amount is based on $55 per space for 25 spaces.  Because we expect that the Council will increase the monthly lease in its off-street lots and the parking structure downtown from $65 per space to $80, we recommend that the cost of the Pritchard Park spaces be increased to $65 if the downtown rates are raised to at least $75 per space.  The monthly payment would consequently be $1,625. Language would be included in the lease agreement to the effect that if the Council sets rates at less than $75, the Siena lease payments would remain $55 per space.

NEXT STEPS

If the Council adopts the attached resolution we will execute a renewal of the agreement on a month-to-month basis. As soon as financial negotiations are completed for a broader agreement we will present to the Council the recommendations of the Pritchard Park Art Garden Committee and the Manager’s recommendations.

RECOMMENDATION

That the Council adopt the attached resolution which would authorize the Manager to execute an extension of the current lease for parking spaces to the Siena Hotel on a month-to-month basis at a price of $1,625 per month if the Council raises downtown parking rates to at least $75 per space, or at $1,375 if the Council sets downtown parking rates at less than $75..

A RESOLUTION AUTHORIZING THE MANAGER TO EXECUTE AN EXTENSION OF THE CURRENT LEASE AGREEMENT BETWEEN THE TOWN AND THE SIENA HOTEL FOR LEASE OF PARKING SPACES ON TOWN PROPERTY (2002-05-29/R-5)

WHEREAS, the Council authorized the Manager to negotiate a short-term lease of parking spaces on Town property to the Siena Hotel; and

WHEREAS, an 11 month lease agreement was executed in 2001; and

WHEREAS, the lease has expired; and

WHEREAS, a complete report and recommendations related to the parking situation will be presented to the Council upon completion of financial negotiations;

.

NOW, THEREFORE, BE IT RESOLVED that the Council authorizes the Manager to execute an extension of the current short-term lease of parking spaces on Town property to the Siena Hotel on a month-to-month basis, at a price of $1,625 per month if the Council raises downtown parking rates to at least $75 per space.

BE IT FURTHER RESOLVED that if downtown rates remain at a figure less than $75 per space the rates for parking at the Pritchard Park site will remain at $55 per space.

This the 29^th day of May, 2002.