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HomeMy WebLinkAbout1993-02-22 93-164 ORDERCouncil Action Date Febmew2e.19e5 Item No. 93-164 Itam/Subject Authorizing Amendment Extending Parking Lease with Bureau of Indian Affairs - MaliseetGardens Responsible Department Community Development Commentary: The developers of Me Maliseet Gardens project on Exchange Street proposed development in two phases, each phase using approximately one half of the City's development parcel located between Exchange, Oak, York and Hancock Sheets (sea attached site plan). The City granted two separate options for the development, one for each phase. During the period of Me Phase II Option (from November 1987 to November 1990) the developer was granted the right to develop and maintain parking spaces on City property In the Phase II was in anticipation of fie development proposed for the Phase 11 area. The Phase II development never occurred. At Me request of Me now present owner, the U.S. Bureau of Indian Affeirs, a perking lease agreement was negotiated and entered Into with the Bureau for Me two year period ending December 31, 1992. The Lease rete agreed to was $5.48 per space per month during the period of Me lease, with a right of first refusal for Me Bureau to continue leasing the spaces after December 31, 1992 at Me City's current surface parking rate - less an allowance of $5.00 for Me value of Me City not doing maintenance and snow removal. The Bureau has now requested a reduction of approximately 80% from this rate. The Community and Economic Development Committee has reviewed the Bureau's request and has recommended no change in Me rate provided for in Bureau's right of first refusal. (see next page) Deoaamem Head / Manager's Comments: The Community and Economic Development Committee has recommended Mat Me Maliseet Project pay Me standard permit fee per month less $5Ao for snow removal and maintenance. This is Me same approach used elsewhere in Me Downtown parking area The Maliseet Project has recovered Its original Investment In constructing Me lot over Me pasttwo years. Ill be unfair to provide Me project with a lower rate than is charged to others. I recommend Me attached order providing for Me went rate chargetl ihersb passed. - /�f .gyp Mena e Associated Iniormatiom ) Budget Approval: -IOjF Finance Dlrecror Legal Approval: �y1 6 city sollcllorar Introduced For ❑X Passage FFirst Reading Page 1 of 3 ❑ Referral 93-164 Amassed CouucJa Sullivan, February 22, 1993 CITY OF BANGOR Author rng Amendment extending Parking Lease with 11 Bureau of Indian Affairs - maliseet By My COwldi of 04 of Sensor. ORDERED, THAT the City Council of the City of Bangor hereby authorizes the City manager to execute an Amendment to the Lease Agreement by and between the City of Bangor and the United States Bureau of Indian Affairs dated October 25, 1991, in a form satisfactory to the City Solicitor, which would extend the term of the Lease for an indefinite term at the City's regular surface parking permit rate times the number of spaces leased, less Five Dollars ($5.00) per space per month if the united States Bureau of Indian Affairs assumes the responsibility of snow plowing and maintenance of the parking spaces leased. 93-166 ORDER Title, Fe - CITY COUNCIL Pebxuaxy 22, 1993 _ AneTorizing Amendmene eutending Parking .Or der-Passed., edY ed Lease vitb Bureau of Indian Affairs Maliseet No conf11Ct f x Council r Coh5n, Gardens by the following yes and.to Wtes. ............ . ................ .. . Councilors voting na: Blanchette, Bragg, Frankel, Sael, Sbubert. Saucy/�J,g'��J///` Stone and Sullivan. Councilor Cohen abstaining. Amigned to C. .0 l� .... CI CLE %cilgen 93-164' The Bureau's representativeafeel Met since the Bureau in effect financed the coal of constructing the 70 parking spaces located on City property, It should be entltled to a lower rate of leasing City parking spaces than others. The City recognized this when negotiating the lease rate with Me Bureau during Me last two year period. The estimated cost of constructing the 70 spaces was $56,000 ($800 per space). Amortized over Me 4 years of usage during Me Option and Lease "nods, this cost amounted to $16.67 per space per month. The value of the Option fees paid Me City during Me two years of the option period Me project was occupied ($4,800) amounted to $2.85 per month. The parking lease rale during the two year pedod of Me Lease Agreement was derived by adjusting Me surface parking rate at Met time of $30.00 per space per month by deducting the $5.00 value per month per space of the City not doing snow plowing and maintenance, deducting Me $2.85 per space per month value of Me Option fees paid the City during the two year pedod of Me Option the project was occupied, and deducting $16.67 which is Me per opera per month cost of amortizing the construction cost of the spaces over the 48 months of usage during the Option and Lease period 1$56,000 divided by 48 months divided by 70 spaces). The result was a lease coat per space per month of $5.48. This Lease fee allowed the Bureau to recover all costs assodated with the cost of constructing Me 70 spaces on City owned property in the 'Phase 11 area. To rescue Me calculation: City surface parking rate at the time of Lease negotiation $30.00 Adjusted by: Value of CIry not doing snow removal 8 maintenance ($6.00) Value of Option teas paid the City ($2.85) Credit for 4 year amordzallon of cog of spaces ($16.67) Net lease fee per space per month agreed to by Bureau 8 City $5.48 Times number of spaces leased 70 - Times number of months in year 12 = Annual lease rate agreed to for two year period of lease ".603 Rounded to - $4,600 Of Ma 70 spaces involved, 12 are signed as reserved for customer parking, 33 signed as reserved for employees, and the balance as reserved for tenantoloccupants. Some of the occupants have expressed a concern about the loss of use of the spaces involved, The stall recommendation Is that the Bureau be chargetl the same surface parking rate charged all in Me downtown area This is the rate the Bureau fully agreed to when Me parking Leese was negotiated and executed. The Bureau has offered a 5% increase in the $5.4B per space per month which would result in a rate of $5.75 per space per month ($4,830 annually), approximately an 80% reduction from Me surface parking rate charged others (allowingfor Me$5 creditfor snow plowing and maintenance). Wthouttlerate reduction requested, the Bureau would be paying $28.00 per space per month ($23,520 annually). The Bureau has thus requested a rate recitation not provided to other downtown property owners. Per Committee recommendation, Me atached Orderwould authortze the City Manager to extend the parking Leave, Agreementior an indefinite period at the City's normal parking lease rate with a $5.00Ispace allowance for the maintenance of the leased spaces by BIA. The lease contains a proNsion Mat the City may terminate Me Lease wit IM days notice M assure the availability of Me Phase II area for development purposes, Page 2 of 3 L—J, fLb .. .