SUBJECT: PROPOSAL FOR PARKING LOT LEASE AGREEMENT WITH BEST GAS COMPANY

Recommendation:

Direct staff as deemed appropriate.

Background:

The City was approached by the Beach Cities Christian Fellowship Church located at 730 - 11th Street to lease and operate an existing parking lot located across from the Church between 11th Street and 11th Place. The new parking lot was required to accommodate a proposed 900 square foot Church expansion approved under Parking Plan No. 00-2 on May 16, 2000. The Church originally requested a building permit fee waiver in return for making the parking available for public use when the church was not operating and the City Council approved the building permit fee waiver on that basis.

The Church has requested that the City lease and operate the lot for public parking, collecting all public parking revenue related to its use with parking made available for the Church’s exclusive use on Sundays and three holidays.

Analysis:

The proposed parking lot can serve additional parking demand from the Civic Light Opera at the Community Center which is located immediately to the north on 11th Place. The parking lot contains 34 parking spaces which can be metered for public parking. The Church is requesting that the City consider leasing and operating the lot as a means to satisfy their discretionary permit condition and to reduce their parking lot operating costs ¹ . They would like the City to consider operation and maintenance of the lot through a long term lease with Best Gas Company and enter into a sublease from the City for limited use of the lot Sundays and special holidays.

Cost Assumptions for Parking Lot Operation and Maintenance:

Lease Rate	$2,200.00 per month	$26,400 per year.
Maintenance		$ 1,000 per year*
Potential Meter Revenue	$5,709.00 per month	$68,510 per year**
Sublease Revenue	$ 332.20 per month/	$3,986 per year***
Meters Purchase & Install	$34,000 total	$2,266 per year****

* Landscape, water, sweeping, electricity/lighting
** (.50 p/hr.) (20 hrs. p/day)	= $10 (362 days)	= $3,650 (.65)	= $2372.5 (34 spaces)	= $80,002 p/yr.
(.50 p/hr.) (20 hrs. p/day)	= $10 (30 days)	= $300 (.65)	= $195 (34 spaces)	= $6,630 p/mo
***(53 Sundays,3 holidays)	56 days/365 days	= .153 or 15..3% ($2,200 p/mo.) = $337.5 p/mo.		= $4,050 p/yr
**** 34 meters @ $1000 ea. installed & amortized 15 years over lease term.($34,000/15 = $2,266 p/yr.)

Comparing annual costs against annual revenues, the City would receive approximately $54,386 per year.

	Annual Costs	Annual Revenues
Meters	$2,266	$80,002
Maintenance	$1,000
Lease	$26,400
Sublease	________	$4,050
Total*	$29,666	$84,052

*Does not include parking enforcement costs and revenues.

If the Council determines that it would like to proceed with the lease with Best Gas Company, the City would enter into a sublease in an amount prorated from the City’s lease of the parking lot. If the City does not lease the facility then the Church must operate the parking lot making it available for public use pursuant to their discretionary permit approval.

Notes:

1. The Church would benefit with savings of $23,350 as shown below:

Cost savings to the church:	Lease:	$26,400
Maintenance:		$ 1,000
Subtotal		$27,400
Costs to Church:	Sublease	- $4,050
Savings to Church:		$23,350

Assume: No Friday p.m., Sunday p.m. sublease use, all day Christmas, New Year, Halloween use.

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