Consent 1.C.
Regular City Council Meeting
- Meeting Date:
- 04/27/2015
- TITLE
- Amendment One to Automobile Parking Concession Agreement
- PRESENTED BY:
- Tom Binford
- Department:
- Airport
Presentation:
PROBLEM/ISSUE STATEMENT
On March 9, 2015, City Council approved a construction contract to CMG Construction, Inc. to reconstruct the Airport's old employee parking lot into a new 225 stall "Express Lot" parking area. As Council may recall, the project includes a new entry merge lane, an entry plaza, an express credit card exit area, and a by-pass lane to the existing pay booth for those who want to pay with cash.
In order to incorporate this new Express Lot into the current Automobile Parking Concession Agreement, staff recommends that the Mayor and City Council approve Amendment One to the Automobile Parking Concession Agreement with Concessionaire, SP Plus Corporation, formerly known as Standard Parking. The Amendment will (1) incorporate the new Express Lot into the Agreement, (2) adjust the public parking rate structure to accommodate the Express Lot, (3) provide the revenue control equipment needed to operate this lot, (4) add an additional five years to the existing Concession Agreement's term, and (5) establish the rate for Airport revenues during the extended five-year term.
Staff has been negotiating with SP Plus to supply the new revenue control equipment needed to operate the Express Lot, as well as upgrade the existing Long and Short Term lots' revenue control system so that all ticket dispensing, credit card exit, and manual revenue control equipment is compatible and current once the new lot is opened. In exchange for purchasing, installing, and maintaining this equipment, SP Plus requested a five-year lease extension. Staff feels this is a reasonable request, as this equipment is valued at $224,000. Additionally, with the addition of the new parking lot, the Concessionaire will receive additional revenue from the new Express Lot; subsequently, staff also negotiated a new revenue percentage during the five-year term extension. Currently, SP Plus provides the Airport 70% of gross revenues collected. During the additional five-year term, the Airport will receive 80.5% of gross revenues. With SP Plus providing the $224,000 of equipment, and the Airport receiving 80.5% of the anticipated increased total revenues over the five-year extension, staff feels this is a favorable deal for the City.
In order to incorporate this new Express Lot into the current Automobile Parking Concession Agreement, staff recommends that the Mayor and City Council approve Amendment One to the Automobile Parking Concession Agreement with Concessionaire, SP Plus Corporation, formerly known as Standard Parking. The Amendment will (1) incorporate the new Express Lot into the Agreement, (2) adjust the public parking rate structure to accommodate the Express Lot, (3) provide the revenue control equipment needed to operate this lot, (4) add an additional five years to the existing Concession Agreement's term, and (5) establish the rate for Airport revenues during the extended five-year term.
Staff has been negotiating with SP Plus to supply the new revenue control equipment needed to operate the Express Lot, as well as upgrade the existing Long and Short Term lots' revenue control system so that all ticket dispensing, credit card exit, and manual revenue control equipment is compatible and current once the new lot is opened. In exchange for purchasing, installing, and maintaining this equipment, SP Plus requested a five-year lease extension. Staff feels this is a reasonable request, as this equipment is valued at $224,000. Additionally, with the addition of the new parking lot, the Concessionaire will receive additional revenue from the new Express Lot; subsequently, staff also negotiated a new revenue percentage during the five-year term extension. Currently, SP Plus provides the Airport 70% of gross revenues collected. During the additional five-year term, the Airport will receive 80.5% of gross revenues. With SP Plus providing the $224,000 of equipment, and the Airport receiving 80.5% of the anticipated increased total revenues over the five-year extension, staff feels this is a favorable deal for the City.
ALTERNATIVES ANALYZED
City Council may:
- Approve Amendment One to the Airport Parking Lot as set forth; or
- Decline to approve Amendment One and direct staff on how to proceed.
FINANCIAL IMPACT
The Airport estimates that revenues resulting from adding an additional five years will be no less than $2,100,000 annually, and could reach upwards of $2,700,000 annually. Additionally, the Airport will not be required to provide a capital outlay of $224,000 for new equipment.
RECOMMENDATION
Staff recommends the City Council approve Amendment One to the Automobile Parking Concession Agreement with SP Plus Corporation, adding approximately 225 new parking stalls, adjusting the parking rates to accommodate the third lot, requiring SP Plus Corporation to install $224,000 of new Parking Revenue Control Equipment, adding five years to the Agreement Term, and establishing the revenues the Airport will receive during the additional five years.