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Home My WebLink About6/19/2013 - STAFF REPORTS �o QALM Sp4 �Z c U y CQ�/FOfRN�p CITY COUNCIL STAFF REPORT DATE: June 19, 2013 Consent SUBJECT: APPROVAL OF AN AMENDMENT NO. 1 TO A LEASE AGREEMENT (A5688) WITH GREYHOUND LINES, INC. FOR NON-EXCLUSIVE USE OF CITY-OWNED PALM SPRINGS TRAIN STATION ON GARNET STATION ROAD FROM: David H. Ready, City Manager BY: Community and Economic Development Department SUMMARY This action extends the lease with Greyhound Lines, Inc. for non-exclusive use of the City-owned Palm Springs Train Station on Garnet Station Road for one additional year. RECOMMENDATION: 1. Approve Amendment No. 1 to Agreement No. 5688, Lease by and between Greyhound Lines, Inc., and the City of Palm Springs for non-exclusive use of the City-owned Palm Springs Train Station on Garnet Station Road, for one additional year. 2. Authorize the City Manager to execute all necessary documents. STAFF ANALYSIS: In July 2008, the City and Americanos USA, LLC, a wholly-owned subsidiary of Greyhound Lines, Inc. entered into a Lease Agreement that would allow the company to develop a permanent presence at the Palm Springs Train station on Garnet Station Road. The Lease Agreement was for a term of three years with an option to renew the lease for an additional two year term. The use of the site by Greyhound has significantly increased the use of an excellent but underutilized public transportation facility. Over the last 5 years, the bus operations at the train station has run relatively well and provides much needed regional bus service to its customers. One of the main challenges with the train station location has been the location and proximity to the center of town and the lack of local public transit. The area has no nearby amenities within walking distance and is exposed to the elements. It is not likely to be economically feasible for Sunline to add local bus service to the train station until ITEM NO.�� City Council Staff Report (June 19, 2013)-- Page 2 (Greyhound Train Station Lease) there is future development in the area north of the 1-10 Freeway, so the location will continue to have challenges with access to local transportation. On the positive side, the site offers easy freeway access and closer access to regional bus service to riders from Palm Springs than Indio or Banning. The site also has a large, well-lighted parking lot and bus pullouts. There is currently an emergency phone with free local call access and a single unisex restroom, as well as a shaded structure on the platform. Five years ago, when Greyhound moved their operations to the train station site, they found it necessary to adjust their historical operation to the financial conditions at that time and determined that they could not operate at the necessary profit margin if they were required to build and staff a terminal facility at the Palm Springs Train Station. At that time, it was agreed that Greyhound would operate in a manner similar to Amtrak utilizing the existing infrastructure. Greyhound also did not want to commit to any major tenant improvements until both parties (Greyhound and the City) were more certain about the feasibility of the use of the Palm Springs Train Station for bus operations. Passengers are currently sold tickets to their destinations via an on-board ticketing system, which already exists in a variety of forms within the Greyhound system. Greyhound pays the City a monthly rental to operate at the train station and this rental income helps to offset the City's cost to clean and maintain the site as well as provide security which is currently under contract with Maxwell Security Services. The last 5 years have given both parties the opportunity to "test the waters" and learn how to best utilize this transportation infrastructure. Now that Greyhound has successfully operated in this location for 5 years, and financial conditions have improved, they are ready to construct a building on the site and expand their operation to include a ticket counter, indoor waiting area and restrooms that would be staffed by Greyhound during the bus service schedule. The construction of a staffed indoor waiting area would greatly improve the station and give an added level of security to the area. Attachment No. 2 contains some conceptual drawings of the proposed modular building. The extension of the current lease for another year will allow staff the opportunity to work with Greyhound towards an approved project design and ultimate construction of a modular building on the train station site. The project design would be reviewed by Architectural Advisory Committee and Planning Commission and brought to Council for the approval of a new long-term lease agreement with Greyhound for operations at the improved Palm Springs Train Station. 02 City Council Staff Report (June 19, 2013)-- Page 3 (Greyhound Train Station Lease) FISCAL IMPACT: No fiscal impact. Tenant currently pays $1,371.15 in monthly rental and shall pay rent at $1,383.75, the adjusted amount per the current CPI increase. 7*o C b � LomhnMS. a o d, Director of Diana R. Shay, Redevelopment ity an Economic Development Coordinator David H. Ready, City M Attachments: 1. Amendment No. 1 to Train Station Lease Agreement 2. Conceptual Plans of new modular building at Train Station for Bus Operations 03 AMENDMENT NO. 1 TO LEASE AGREEMENT GREYHOUND LINES INC. This Amendment No. 1 to Lease Agreement ("Amendment") is made and entered into this day of , 2013, by and between the City of Palm Springs ("Landlord") and Greyhound Lines Inc. (formerly Americanos USA, LLC) ("Tenant'), whose address is 600 Vine Street, Suite 1400, Cincinnati, OH 45202, who agree as follows: RECITALS WHEREAS, Landlord and Tenant entered into a Lease Agreement dated November 13, 2008 ("the Lease'), for the lease of premises commonly known as the City owned facility located on Garnet Station Road, the Palm Springs Train Station; and WHEREAS, the Facility Use Agreement was for an initial period of three years, beginning July 1, 2008 and ending June 30, 2011, with the option of two additional one-year terms; and WHEREAS, the Landlord and Tenant exercised all extension options of the Lease, there are no remaining options to extend the lease and both parties desire to extend the Lease for an additional year beyond the June 30, 2013 termination of the contract to allow additional time for negotiations on a new Lease that will take into consideration the construction of improvements on the site by tenant to benefit bus operations, train passengers and future transportation uses including a new modular building with ticketing counter, temporary storage lockers, and indoor waiting area. NOW, THEREFORE, the Landlord and Tenant do hereby mutually agree as follows: AGREEMENT 1. The term of the Lease Agreement shall be extended for a one-year period from July 1, 2013 to June 30, 2014. 2. The rental rate shall remain at the existing plus a CPI adjustment to be made in July when lease is executed. 3. All other terms and conditions of the Lease Agreement shall remain in full force and effect. [SIGNATURES ON FOLLOWING PAGE] 04 866560.1 IN WITNESS THEREFORE, these parties have executed this Amendment on the day and year first set forth above. CITY OF PALM SPRINGS Date: David H. Ready, City Manager ATTEST: James Thompson, City Clerk APPROVED AS TO FORM: Douglas C. Holland, City Attorney GREYHOUND LINES, INC. Tenant By: Date: 05 866560.1