HomeMy WebLinkAbout4/5/2017 - STAFF REPORTS - 5.C. 7 ALMS.*
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C441post �P City Council Staff Report
DATE: April 5, 2017 NEW BUSINESS
SUBJECT: DISCUSSION OF PUBLIC PARKING OPTIONS FOR THE DREAM
HOTEL LOCATED AT THE NORTHEAST CORNER OF CALLE
ALVARADO AND AMADO ROAD
FROM: David H. Ready, City Manager
BY: Community & Economic Development Department
SUMMARY
On August 3, 2016, the City Council approved escrow instructions related to the
conveyance of the 7.8 acre City property located at the northeast corner of Calle
Alvarado and Amado Road to Selene Palm Springs, LLC, (the "Developer") for
redevelopment of the existing public parking lots to a luxury resort hotel and
condominium development, identified as the Dream Hotel, a 4+ star boutique hotel.
Included with the escrow instructions was an obligation of the Developer to submit a
plan for replacement of the public parking spaces (350 to 500 parking spaces inclusive
of on-site parking spaces required for the Dream Hotel), to be used as the basis of a
City Council decision on partnering on development of a public/private parking facility as
part of the Dream Hotel.
This action allows the City Council to determine whether to partner with the Developer
on construction of a public/private parking facility.
Selene Palm Springs, LLC, a California limited liability company, is managed by CDI
Ventures, LLC, a California limited liability company, and Qaiser Capital, LLC, a
California limited liability company. The principle officers/members are Lauri Kibby and
Abdul Lalani.
RECOMMENDATION:
Provide direction to staff as appropriate.
STAFF ANALYSIS:
On August 26, 2016, the City completed the conveyance of public parking lots used by
the Convention Center to the Developer, as part of an approved development of the site
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City Council Staff Report
April 5, 2017 -- Page 2
Dream Hotel Parking Plan
into a luxury boutique hotel and condominium development located on Amado Road
between Calle Alvarado and Avenida Caballeros, as shown in Figure 1 (the "Project").
The proposed site plan for the Project is shown as follows.
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Figure 1
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City Council Staff Report
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Dream Hotel Parking Plan
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Figure 2
Pursuant to the escrow instructions approved by the City Council on August 3, 2016, a
Grant Deed was recorded on August 26, 2016, which included the following obligation:
The Grantee and Grantor (City) agree that notwithstanding any provision to the
contrary in Amendment Number 1 to the Services Agreement between the
Grantee and the Grantor (the date of such Amendment No. 1 is November 19,
2015) and prior to commencement of construction on the Property, Grantee shall
submit to Grantor's City Council a plan for the construction of 350 to 500 parking
spaces in the Parking Facilities (as defined in the Services Agreement as
amended). This plan for parking will describe the manner in which Grantee's
parking requirements for all private improvements there on shall be
accommodated, the number and location of public parking spaces available
within the Parking Facilities in excess of the Grantee's parking requirements, and
the manner in which such Parking Facilities will be financed and maintained. In
the event the City Council accepts the Grantee's plan for parking or a modified
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City Council Staff Report
April 5, 2017 -- Page 4
Dream Hotel Parking Plan
plan accepted by the City Council and the Grantee, the Grantee, prior to
issuance of a building permit, shall deposit the $2,675,000 (the "Payment') as
described in Section 3 of the Services Agreement, as amended, into an escrow
account designated and approved by the City to be held by the City until such
time as the funds are required to fund all or a portion of the contributions
necessary for the SC/P and the construction of the Parking Facilities. In the event
the City Council does not accept the Grantee's plan for parking for any reason,
Grantee shall pay the Payment in one lump sum to the City prior to issuance of
any building permit on the Property, which the City may use for any city purpose,
and Grantee shall be relieved of any obligation to construct parking in excess of
parking as may be required for all private improvements on the Property..."
The Developer has evaluated the on-site parking requirements associated with the
Project, and has proposed two optional plans (included as Attachment 1) for the City
Council's consideration:
• Option 1 provides a total of 366 parking spaces, with 206 private valet spaces for
use by the Project on one level of a combined public/private parking structure, and
160 public parking spaces located on another level of a combined public/private
parking structure. Option 1 proposed the use of mechanically stacked parking stalls
for the private valet parking spaces, and is estimated to cost $14 Million. (±$38,250
perspace)
• Option 2 provides a total of 370 parking spaces, with 186 private valet spaces for
use by the Project on one level of a combined public/private parking structure, and
164 public parking spaces and 20 reserved private valet spaces for use by the
Project located on another level of a combined public/private parking structure.
Option 2 does not propose the use of mechanically stacked parking stalls for the
private valet parking spaces, and is estimated to cost $15.2 Million. (±$41,100 per
space)
The Developer prefers the Option 1 structure layout due to cost and size. There is also
the added benefit of being able to separate the operations of the hotel parking from the
operation of the public parking by distinct levels, instead of having the spillover spaces
in Option 2. Staff has evaluated the Developer's proposed parking plan, and has the
following concerns:
Financing Issues
The Developer intends to finance certain development impact fees and public
improvements through the California Statewide Community Development Authority
(CSCDA) Community Facilities District (CFD) financing program. Under the Services
Agreement entered into as part of the property sale, the Developer is obligated to pay
the City $2,675,000 for parking improvements necessary or desirable for the
construction of at least 350 public and private parking spaces to replace existing public
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Dream Hotel Parking Plan
parking lost as a result of the property sale. The Services Agreement contemplated that
the $2,675,000 payment would be used for the public contribution towards financing of a
dual-purpose parking structure through one of the CSCDA's infrastructure financing
programs.
The Developer proposes using the CSCDA CFD financing program to fund the parking
structure. The CFD program is similar to the CSCDA's Statewide Community
Infrastructure Program (SCIP) financing program, but includes a broader range of
improvements that may be financed. Using either the CSCDA CFD or the SCIP program
requires active participation by the City. If public facilities such as a parking garage are
to be financed, the City must acquire the structure with the proceeds of the CFD bonds,
and therefore, would own the structure and ultimately be responsible for its
maintenance. If impact fees are being paid to the City from proceeds of the bonds, the
City is required to spend those proceeds within 3 years on facilities for which the fee is
paid. If the City cannot determine that the amounts can be spent within 3 years, the
fees cannot be financed. This distinction will be important later in the discussion of
alternatives to participating in the parking garage.
Due to the complexity in financing the valet level and associated operational issues, it
was determined that the private parking level (lower level) of the garage was best
financed without SCIP funding, and only the public parking level (top level) would be
financed using SCIP. This is possible by "condominium-izing" the two levels so the City
can acquire the top level as a separate legal parcel, making it possible for the private
parking level to use the mechanical stacking feature, without the City having
responsibility for the cost to maintain or operate that specialized equipment.
There are two challenges in using public financing for a dual-purpose parking facility.
The first is meeting the requirements of federal tax law for financing the structure on a
tax-exempt basis. The portion of the garage that is restricted to hotel/condo use is not
considered a public purpose and, without significant changes in proposed operation of
that level of the structure, would not be able to be financed on a tax-exempt basis. That
makes inclusion of the hotel/condo level of the parking structure not cost effective. After
discussing the various drawbacks and complications with the Developer, the Developer
concluded it would be better to limit the public parking level costs in the financing and
use equity or private financing for the hotel/condo level. This bifurcation of the levels
also makes the operational issues less complex.
Participating in the CSCDA CFD financing program to fund the public parking level of
the parking structure will require the levy of a special tax on the property, including both
the hotel commercial uses and the privately owned residential condominium units. The
Developer has not yet estimated what that amount is, since there is uncertainty which
parking plan option might be acceptable to the City Council, or if the City Council opts to
be paid the replacement parking fee of $2,675,000. The Developer is working on this
analysis with the consultants from CSCDA.
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City Council Staff Report
April 5, 2017 --Page 6
Dream Hotel Parking Plan
Operational
As noted, under State law, to finance the parking structure with CFD bonds, the City will
be required to own the public parking level. The City can operate the public level at
their discretion, and they may charge for parking. There are relatively few restrictions
on the operation, mostly how any third party contractor can be paid for managing the
facility. The one critical operational issue is going to be the joint maintenance and
insurance of the facility. While the City doesn't need to be concerned about how the
mechanical stacking equipment is working, it does need to make certain that the facility
is kept in good repair and condition, and that liability and property damage is
appropriately addressed. Those details will need to be worked through with the
Developer, in consultation with bond counsel, city attorney and staff, to make certain
that the City is adequately protected.
Currently, the City's operator of the Convention Center (SMG) manages the use of the
City's public parking lots around the Convention Center, including the parking lots that
are the site of the Project. SMG has reviewed the Developer's proposed parking plan,
and offered the following comments:
Current Condition:
Currently, the Convention Center has 1,085 dedicated spaces for its use, with 435
spaces in the Amado Lot (Dream Hotel Site) and 650 in the newly built East Lot. There
are an additional 533 temporary spaces in the Prairie Schooner lot that is shared with
the Renaissance and Hilton Hotels. Primary parking for the Convention Center is in the
Amado Lot, with the East Lot as overflow. The Prairie Schooner Lot is used occasionally
for overflow parking, but is the primary lot for valet parking for gala events such as
Steve Chase and the Palm Springs International Film Festival. Moreover, the Prairie
Schooner lot is no longer owned by the City, and a development project is proposed for
the site by the new owner. In the meantime, according to the land transfer escrow
instructions, the City has the right to use parking free of charge until such time a
development occurs. Once the Dream Hotel begins construction, the Convention
Center's primary parking will shift to the East Lot with overflow in the Prairie Schooner
Lot.
Proposed Underground Parking at Dream Hotel:
The proposed public parking under the Dream Hotel will be located on the east side of
the hotel on Avenida Caballeros with one main entry/exit point located approximately
the same distance away from the front entrance to the Convention Center as the East
Lot, and further away from the east entrance to the Convention Center than the East
Lot. Because it will be located in the hotel building it may be difficult for attendees to
find, and will require distinct signage on the building and additional directional signage
around the facility. With 160 spaces, the proposed underground parking will only
accommodate the parking needs of about 15%-20% of the events, with the majority of
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City Council Staff Report
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Dream Hotel Parking Plan
the event parking using the East Lot which will be required to accommodate the parking
needs of approximately 80%-85% of the events. In order to manage traffic most
efficiently, it would be recommended to operate the proposed public parking level at the
Dream Hotel as overflow parking only after the East Lot is full.
The Convention Center(funded by the City) would be required to fund the operation and
maintenance of the underground public parking, and based on the number of proposed
parking spaces, it is unlikely that sufficient revenue would be generated to offset
anticipated operating costs of the facility, thereby increasing the Convention Center
operating costs.
Alternatives
The alternative to the City participating in the ownership and operation of the proposed
public/private parking structure at the Dream Hotel is to opt for the lump sum payment
of $2,675,000 and use all or a portion of these funds toward construction of additional
parking. If that is the preferred alternative, the Developer will request that the lump sum
parking fee be authorized to be financed using the SCIP program. However, they are
restricted in their ability to finance such amount if the City cannot determine that they
can spend the money on a capital parking improvement within 3 years. Some of the
alternatives for replacing the parking spaces on the Dream Hotel site are:
• Complete East Lot
The first phase of the East Lot construction included the build-out of 650 spaces at a
cost of approximately $1.2 million or $1,850 per space. There is space for an additional
264 spaces as part of a future phase, which has already been graded and
electrical/lighting improvements installed as part of the first phase. The East Lot is
directly across from the east entrance to the Convention Center with a controlled
crosswalk and provides the best access from the East Lot to the Convention Center and
the Renaissance Hotel. Construction of the future phase to build-out the East Lot is
estimated at $500,000. Additional operating costs for the Convention Center would be
minimal and there would be no impact on the Convention Center budget.
Modify Street Parking in Convention Center Area
There has been discussion about modifying the street configuration around the
Convention Center to allow more on-street parking through the development of diagonal
parking along the street. This option may allow for additional parking in the Convention
Center area, and may have an incremental effect on Convention Center parking
revenues depending on the number of spaces built if attendees choose free street
parking over the other parking lots. The estimated cost varies depending upon the
extent of revised street configuration and added diagonal spaces.
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Dream Hotel Parking Plan
Recommendation
Based on the above identified financial and operational issues, staff recommends that
the City Council opt for the lump sum payment of $2,675,000 and allocate at least
$500,000 of these funds toward construction of 264 additional parking spaces to fully
build-out the East Lot. This cost is equivalent to $1,900 per space, a much reduced cost
when compared to the cost of $38,250 per space in a public/private parking garage.
The balance of the funds, as anticipated in the purchase and sale agreement with the
developer, can be used by the City for any purpose.
ENVIRONMENTAL IMPACT:
The requested City Council action is not a 'Project' as defined by the California
Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a `Project' means the
whole of an action, which has a potential for resulting in either a direct physical change
in the environment, or a reasonably foreseeable indirect physical change in the
environment. The requested action is to provide direction to staff on participating in the
construction and financing of a public/private parking garage, and is exempt from CEQA
pursuant to Section 15378(b), in that a "Project' does not include: (5) Organizational or
administrative activities of governments that will not result in direct or indirect physical
changes in the environment.
FISCAL IMPACT:
If the City Council prefers to proceed with Option 1 of the parking plan proposed by the
Developer, the City will be required to acquire and own, and provide for the continued
operation and maintenance of the public parking level in the parking structure financed
through the CSCDA CFD financing program, which could be funded by a charge for
parking, if desired. This requirement will extend past the term of the bonds. Operational
and maintenance costs at start up are not yet determined, however are estimated
between $50,000 and $70,000 annually.
If the City Council prefers the lump sum payment of $2,675,000 and allocates $500,000
of these funds toward construction of 264 additional parking spaces on the East Lot, the
City would receive a direct payment of $2,175,000 from the Developer for its use for any
purpose — with the $500,000 allocated for construction of parking to be financed by the
Developer through the SCIP.
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City Council Staff Report
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Dream Hotel Parking Plan
SUBMITTED:
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Marcus L. Fuller, MPA, PE, PLS David eady, sq.
Assistant City Manager/City Engineer City Manager
Attachments:1. Parking Plan
ng
ATTACHMENT 1
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Parking Narrative r -
Dream Hotel Project r;
Palm Springs,CA
The purpose of this parking garage narrative is to present two possible scenarios for the construction of
public parking for the Palm Springs Convention Center within the new Dream Hotel and Resort project at
Amado Road and Calle Alvarado in Palm Springs, California.
It is anticipated that the parking garage will be funded by the submitting of an application to the State of
California Infrastructure Program (SCIP) prior or during the start of construction of the new Dream Hotel
and Resort by Selene Palm Springs, LLC.
The attached exhibits have been developed under the guidance of the Selene Design team and Penta
Construction. Penta Construction will serve as the general contractor and will build the parking garage
as a part of their contract with Selene Palm Springs, LLC.
The two options are as follows:
General
Option 1 proposes the construction of a two level underground structure composing of 366 stalls, 160
public parking stalls would be completed for convention center use and 206 valet parking stalls would be
completed for use for the new Dream Hotel at an estimated cost of$14,020,464.00. The P3 Level (1st
floor level) consists of a vehicular entry and exit ramp from Calle Caballeros. Public use stairs and an
elevator for pedestrians using the garage level would be provided. At the western end of the parking
garage, adjacent to the hotel, there would be an additional exit stair and elevator core to allow public
access to the hotel property,with access to Amado Road thru a pedestrian walk on the hotel property.
Option 1 also includes a Second Level P2 (located underthe P1 level).This level provides valet parking
for use by the hotel resort and condominium owners.Vehicle access to Level P2 comes via a separate
ramp located along the service road that will be provided at the hotel site. This proposed P2 level is
separate from the Convention Center P1 level above it, and would be served by exit stairs and an
elevator to allow direct pedestrian and hotel employee access to the hotel property above.
Under Option 1, construction provides for two parking levels,with each addressing the specific needs of
the Convention Center and the hotel.
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Parking Level 1:Size/Square Footage
The proposed PI level is approximately 242 ft. by 236 ft. (57,110 sf). This provides 150 parking stalls with
an optional 10 additional stalls allocated for extended buildout, if necessary. This level also would
contain rooms for mechanical equipment and air ventilation. The drawings do not yet reflect the area
needed, however, cost allocation has been provided. Further definition will be provided during design
development.
Parking Level 2:Size/Square Footage
The proposed P2 level is approximately 158 ft. by 236 ft. (37,890 sf). This provides 206 mechanically
stacked and non-stacked parking stalls for hotel valet parking as illustrated within the attached exhibits.
Parking Levels 1 and 2
Levels P1 and P2,combined square feet totals 95,000 sf(57,110 for level 1 and 37,890 for level 2).
General
Option 2 proposes the construction of 184 parking stalls on Level P1 (1" level) and 186 parking stalls on
Level P2 (2nd level), at an estimated cost of $15,222,596.00. Similar to what is proposed under the
Option 1; Option 2 provides stairs and elevator to allow the public to exit out of Level PI to Calle
Caballeros and to Amado Road, similar to what would be proposed under the Option 1 scenario.
Option 2 includes Level P2 built under Level P1 that provides valet parking for the hotel resort and
condominium owners. Level P2 is proposed for Dream Hotel valet operations and is accessible from a
separate parking garage ramp from the service road as described in the Option 1 scenario. Level P2
would include exit stairs and an elevator for use by hotel parking operations as illustrated per the
attached Exhibits.
Parking Garage Sizes and Square Footage
Under Option 2, both the P1 and P2 levels would be 242 ft. by 266 ft. equaling 64,370 sf at each floor
level, equating to 128,740 total sf.
With Level P1 being constructed directly over Level P2, Level P1 would contain 184 parking stalls and
Level P2 would contain 186 parking stalls,for a total of 370 parking stalls. Unlike Option 1,Option 2 does
not require a mechanical car stacking system.
Option 2 requires approximately 20 parking stalls are reserved on Level P1 for the completion of its
required hotel and condominium parking requirements.
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The current design does not yet reflect areas for mechanical equipment for air ventilation but it is
reasonable to assume that such areas can be provided for in isolated corners or surplus clearance areas
however, cost allocation has been provided..
Attachments
See exhibits and cost estimates attached.
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