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HomeMy WebLinkAboutRDA PKG STRUCTURE 08-03-81FRO#: SUB J ECT: Honoreble Chatrman and Redevelopment Agency ~mbers Cora~untty Development Department Parking Structure in Old Town Tustin BACKGROUND This report examines a proposal to construct a two level parking structure and adjacent plaza that will front on "C"~Street near the corner of Main Street. Municipally owned parking spaces will be utilized to aid in the revitalization of adjacent uses in the downtown redevelopment area. tn January of 1980, Gfeller Development Company received approval for a use permit to allow fort he construction of new office butldings with the preservation of the Steven's house included. The use permit included the provision to provide an underground parking structure to supply parking spaces for the project. approximately March of 1981, Gfeller acquired the Francis Brother Screendoor factdry in order to provide at-grade parking spaces. June of 1981, the use permit was amended allowing for the mmoval of the Underground parking and construction of at-grade parking at the adjacent Francts lot.' The Ctty has considered the Francts Brothers stte as an excellent location for public owned parking spaces. Condition (R) of Resolution No. 1974 for amended Use Permit 80-1 states that the- developer (Gfeller) will form an agreement with the City regarding the acquisition of parking spaces for public use. The agreement could take the form of City participation in the construction of municipal parking or an abdication by the City for the need of any publicparking spaces. In July, Gfeller submitted a conceptual plan for the construction of a parking structure and a plaza on vacated "C" Street. The conceptual plan includes: The construction of an upper level parking structure of approximately 105 spaces. The lower level would be utilized by the Steven's. Project, along with2¢ spaces on the second level. August 3, 1981 ParRing Structure in Old Town Tustin Page Two The City would pay the full cost of the parking structure, which is estimated at $600,000. Gfeller Development will receive 13 parking spaces on the second level that were eliminated on the first level by the second level improvements. Gfeller Development will purchase the remaining 11 spaces at a pro-rated figure. The City RDA and Gfeller Development would split the cost for the plaza. The approximate cost of the plaza is $250,000 with each participant paying $125,000. The City will vacate "C" Street. Construction of the structure will be by Gfeller Development Company and all costs will be subject to an audit by the City. No profit will be allocated to Gfeller Development Company for acting as the general contractor, however, an allowance to cover office and field supervision will be agreed upon. The City could have the option of an outright purchase of the structure at the time of construction or lease the structure with an option to purchase at a future date. The option price would be the actual construction costs. DISCUSSION Staff analyzed the proposal utilizing the following criteria: does the proposal meet with the intent of the goals for the downtown Redevelopment Area; does the proposal represent a positive contribution for the on-going revitalization of the area; can all costs be fully amortized an~L~ayed back to the RDA or will the benefits to the City equal on~utlay of cash? Staff has determined that the parking structure would represent a positive contribution to the downtown area. These benefits will not be apparent immediately, but represent a long range commitment to the downtown area. If Gfeller development were to construct only at-grade parring With no extra spaces for public use, the surrounding block would continue to be stagnated. The shops along Main Street have no on-site parking and little opportunity to expand. The lots fronting on E1 Camino are too small to develop with on-site parking and produce enough revenue to warrant improvement. The area would basically remain the way it is for years to-come. August 3, 1981 ParRing Structure in Old Town Tustin Page Three The public parking structure will allow the surrounding areas to grow, by allowing the shops with no parking to expand. Lots that were previously uneconomical to develop could construct additional square footage instead of parking lots. These improvements will not happen in the immediate future, but the opportunity will be there. (See Exhibit A) Conceivably, the full cost of the structure can be fully amortized, either by the sale of spaces or leasing each space. The sale of spaces could be pro-rated to cover the cost, administration and maintenance. Leasing the~aces would require that the yearly cost be set up in such a Lm~a~ter~hat at the absolute minimum the total cost of the structure~d be fully amortized before the Redevelopment Agency is abolished (25 years). (See Exhibit B) Gfeller Development is proposing to utilize Z4 spaces of the second level parking. Staff has analyzed the conceptual plans for the parking structure and has determined that the second level improvements will eliminate thirteen spaces from the first level. Staff is not adverse to allow Gfeller the use of these 13 spaces on the second level to make up for this loss, but definitely feels that the remainipg 11 parking spaces should be purchased or leased, at a sum to be determined. Staff has determined that the cost of these spaces are $6,500 per space, which is the pro-rated cost of 92 spaces divided by $600,000. This results in an approximate $70,000 cash outlay by Gfeller Development for these 11 spaces. One aspect the parking structure represents will be a further co,,,,itment on the part of the Redevelopment Agency. Improvements will not happen immediately, and this structure could conceivably be underutilized for several years. The Agency may have to take a more active role in marketing the downtown and conceivably have to condemn some properties to facilitate improvements. Staff utilized the same criteria in analyzing the proposal for a 50 percent contribution for the development of the quasi-public plaza. The plaza does not represent a clear-cut fiscal~ cost/benefit analysis as the parking structure does. benefits are an intangible contribution to the area. Staff does feel that the plaza would represent some benefits to the City. These include: Some of the public will utilize the plaza as an exit from the parking structure, going to shops and restaurants along Main Street. Outsiders who are visiting in the City and shopping in this area will receive a positive impression from the plaza. Traffic and circulation in the area will be improved, not August 3, 1981 Parking Structure in Old Town Tustin Page Four only for Gfeller but for the City also. Traffic exiting the site would be split with the majority heading to 6th and E1Camtno Real. The plaza could be utilized by local merchants and public interest groups. A kiosk could announce public events, sales, and news of public interest. Local merchants could utilize the plaza for sidewalk sales and art shows. These benefits are intangibles, and their basic contribution would be a positive preception from citizens or individuals visiting this area of the City. The only real tangible cost benefit the plaza gives is to traffic safety. The City Engineer has reviewed the double cul-de-sac and found it to be acceptable with respect to traffic circulation within the area. The double cul-de-sac will allow the traffic to be segregated to north and southbound "C" Street from the upper and lower levels rely of the proposed parking structure. This segregated trat~'Itrwill help reduce the need for a traffic signal installation at "¢" and Main Streets as traffic volumes increase in the future. The elimination of a traffic signal at an estimated cost of $50,000 will not only be.an economical benefit to the City, but will also eliminate the problems of two signal installations at a very close distance of 330 feet apart. (See Exhibit ¢) Even though the cost of the plaza could be repayed through lease payments charged for parking spaces in the structure, staff feels that there is not enough public benefit to warrant a $125,000 investment. Staff can recon~end that the Redevelopment Agency allocate $50,000 for improvements to traffic and circulation. By utilizing these funds for "C" Street improvemens instead of the traffic s~l, a greater public good will be achieved by improving pedestd~Faa~.s)a, fety, improved traffic safety, and improved circul~t'flFfi along Main Street. CONCLUSIONS One of the goals of the Redevelopment Agency Plan is for the development of public parking to aid in the revitalization of the area. This proposal will aid in accomplishing this major goal.. Be The total cost of the structure can be payed back to the RDA. Preliminary estimates indicate that .the structure will generate additional funds, which can be utilized for other projectsi~J~ the RDA area. August 3, 1981 Parking Structure in Old Town Tustln Page Five Ee The public parking will allow existing structures to expand that previously had no parking opportunities, and vacant lots could develop that were uneconomical before. If properly designed, the. structure can be obtrusive and not distract from the character of the area. The parking structure will represent the need for greater commitment by the RDA. Even though condemnation will be held as a last resort, the probability of its use must be considered. The structure probably will not have an immediate effect on the area, but represents a long-range commitment. The Redevelopment Agency budget currently has $250,000 for the purpose ofacquisition and construction of public parking. Proposed financing methods should be reviewed by the City Attorney to determine the best utilization of funds. The quasi-public plaza does represent a public benefit, but staff is reluctant to commit to a full $125,000 cash outlay. The plaza will improve traffic safety and circulation in the area, and help reduce the need for a traffic signal at "C" and Main Street, resulting in a $50,000 savings from the general fund. The cost of the plaza could be amortized by purchase or lease revenues from the parking structure. The vacation of "C" Street will provide a safe area for employees passing through to the office complex. It will also eliminate the on-going maintenance of that area of street pavement. The current tax increment for the Steven's property is approximately $1,200 per year. The proposed office building will increase the increment to $67,800 or an increase of $66,600. This will result in an additional $1,598,400 of tax increment for the remaining life of the agency, This figure does not include the tax increment for the parking structure or the additional tax increment on the portion of vacated "C" Street. August 3, 1981 Parking Structure in 01d Town Tusttn Page Six RECOMMENDEDACTION Ao 1. Bo 1. Staff recommends that the Redevelopment Agency dtrecJ~--Ikhe City Attorney to contact Gfeller Development, Compaq~res)/ attorneys to formulate an agreement with Gfeller ~ Development Company to construct a municipally owned parking structure over the at-grade parking facilities used by the Steven's Development. A consultant should be retained to perform an economic analysis to determine whether a lease or sale would be advantageous, lease rates, and a proforma to estimate yearly revenue, plus projected revenue for the remaining life of the Redevelopment Agency. Staff recommends that the Redevelopment Agency appropriate a sum of money not to exceed $50,000 for improvements to circulation and traffic safety in the interest of the downtown redevelopment area. Staff re6ommends~the Redevelopment Agency direct staff to begin vacation procedures on the affected portion of "C" Street. EMK/dat The distribution of these funds shall be dictated by the above agreement between the Redevelopment Agency and Gfel 1 er Oevel opment Company. A~L EXHIBIT A An example of tax increment generated by developing the three lots along El Camino Real to the allowable by zoning. land cost construction cost Parking improvement on-site parking 250,000 1,500 @ 45 = 67,500 4,000 @ 1.25 : 5,000 buy from city owned parking 250,000 5,000 e 45 = 225,000 124,800 Total $322,500 $599,800 Tax increment per year Square footage breakdown Office Retail 3,225 $ 5,998 1,500 sq.ft. 5,000 sq.ft. 800 sq.ft. 3,000 sq.ft. 700 sq.ft. 2,000 sq.ft. These figures assume that the first floor will go to retail uses, which is a goal for the Ordinance 510 area. A lease of parking spaces will reduce the tax increment to $4,750, but give the Agency approximately $10,400 in yearly lease fees. (Based on $650 per year fee x 16 spaces.) EXHIBIT B Preliminary cost and revenue breakdown Cost $6170T~oo 70,000 $530,000 $ 6,500 92 spaces 11 spaces purchased by Gfeller Development 1)T available spaces for lease or purchase per space initial cost Revenue Sell administration and maint, figured at 10% each of initial cost $6,500 initial cost 600 administration 650 maintenance $7,1)l~O'sales price per'space $7,800 x 81 spaces ~ $631,800 tax increment to agency (five years to sell out) average of $7,581 x 20 years: $151,620 Total Revenue $783,420 Lease $650 per year per space, based on a $2.50 cost per day for 260 days. (5 days per week for 52 weeks). five years to full lease. $650 x 81 = $52,650 per year $52,650 x 20 years:S1,053,000 this figue is revenue before administration, maintenance, or interest cost. $1,053,000 DA TE: TO: FROH: S UBJ ECT: EXHIBIT C ,JULY 28, 1981 Inter-Corn BO~ n~n~)ECKER, DIRECIDR OF PUBLIC WOI~S/CIT~ ~G~ TRACT NO. 10979 (STEVEN'S SQUARE) The proposed double cul-de-sac of "C" between Main Street and Sixth Street has ~cn reviewed and found to be acceptable with respect to traffic circulation within the area. The double cul-de-sac will allow the traffic to be segregated to north and southbound "C" Street frcm the upper and lower levels, respectively, of the proposed parking structure. This segregated traffic will help reduce the need for a traffic signal installation at "C" and Main Strccts as traffic volumes increase in the future. The elimination of a traffic signal-of an estimated cost of $50,000 - $55,000 will not c~uly be an eo~%c~ical benefit to the City, but will also eliminate the problems of two signal installations at a very close distance of 330 ft. apart. The abandor~ent of a ~ortion of "C" Street will also eliminate on-going street mintenance for that area of street pave~nt and provide a safe area free frcm through vehicular traffic be~=en the parking area and work area for the employees of the proposed condcminium development. Any public utilities within the proposed area of street abandonment would remain in place within a permanent eas~rent for prior operation and maintenance. DIR~"iT)R OF PUblIC ~DRKS/ CITY ENGINEER