In April, 2011, the City and Zootist (Northern Hotel) agreed that the hotel could lease the existing garage that the City bought from the hotel until it was time to demolish it.  The agreement also allows Zootist an option to purchase 187 parking spaces to replace the ones it lost by selling the existing garage and an option to purchase the 28th/Montana Ave. corner retail space.  The option has to be exercised within 60 days following design approval.  Given the pace of development this winter, 60 days is not acceptable, so the City staff and Zootist negotiated a 20 day period to exercise both options.  Staff and Zootist also negotiated a shorter time for Zootist to vacate the garage so that demolition can occur early enought to not interfere with starting the new building construction in March. 

The option agreement also requires that the City provide parking for the Northern's construction workers if the existing garage is demolished before the Northern's construction is done and for valet parking for up to 110 cars from the time that the Northern opens until the new garage is available for Northern guests and tenants.  DBP and Parking staff have been working on these elements and recommend that the City's parking lot on Minnesota Avenue, east of 27th Street be designated as the interim construction and valet parking lot.  Staff also recommends that the City contract with Zootist to provide the valet parking.  The parking garage budget contains $450,000 for that part of the project.  The Northern has agreed to a total payment not to exceed $420,000 for the valet parking.  $125,000 would be paid immediately to cover start-up costs and the remainder would be billed to the City monthly in 12 equal installments.  Construction is planned to take 11-13 months.  The remaining $30,000 in the parking budget will be used to fence and restripe the parking lot and provide a small parking attendant structure. 

Finally, a skybridge has been designed to connect the new Empire Garage and the Northern Hotel.  City staff recommends that the City build and own the structure but that the Northern be responsible for its operations and maintenance.  The skybridge serves only the hotel and will be a major entrance, so it is in the hotel's best interests to operate it and maintain it as part of their hotel operations.  The City cannot guarantee that it will construct the skybridge because it is an element that could be eliminated from the project at a later time in order to save money that needs to be spent on more essential parts of the project.  However, if the City builds the skybridge, this agreement would allow the Northern to operate and maintain it. 

The City Council may approve the amendment, modify it and resubmit it to Zootist or it may disapprove the agreement with instructions for changes that it desires.

The only financial impact is the cost of valet parking, which has been a known project expense since 2011.

Staff recommends that the City Council approve the amendment to the City-Zootist option agreement and lease, the valet parking proposal and the skybridge operation and maintenance proposal.