$977K covering lease and other expenses to be paid through parking revenue
The city of Charlottesville having a controlling interest in every parking space in the Water Street Parking Garage technically is coming with a price. The City Council on Monday night moved forward an appropriation of an additional $977,155 to the garage’s operating budget. The allocation will not affect the city’s general fund or parking fund, according to a staff report, as garage operating expenses are covered by the revenue it generates.
“This is a revenue-neutral change,” said Chris Engel, the city’s director of economic development. “We are simply changing the way we receive the money from the Water Street Parking Garage.”
Previously, the Charlottesville Parking Center operated the garage and paid the city its share of the net revenue at the end of each year, minus the operating expenses of the facility. Lanier Parking now operates both the Market Street and Water Street garages, and the city receives the net revenue monthly. With this change, the city now is responsible for paying the operating expenses directly.
The resolution “allows the city finance department to actually pay those expenses on a monthly basis,” Engel said.
In July, the City Council passed a resolution settling a two-year rate dispute with the Charlottesville Parking Center. According to the agreement, the city will retain full control of the garage for at least 16 years, and the CPC exited the parking management business.
Per the agreement, the city purchased 73 parking spaces at $5,660 each to bring its total to 702 units, enough to be the majority stakeholder in the garage’s condominium association. The city also leased the CPC’s remaining 317 spaces at $50,000 a month. According to the Monday’s staff report $550,000 of the $977,000 appropriation covers the lease payments through June 30. On each July 1, per the terms of the lease, the rent will increase by 2.5 percent.
The Charlottesville Parking Center will continue to own the ground under the garage, and the city’s share of expenses such as liability insurance, the ground lease and other expenses for fiscal year 2019 is $427,155, according to the staff report.
In the agreement, the city largely is responsible for repairs below $500,000. For work that exceeds $100,000, the City Council could ask CPC to share the costs. Councilors asked if there were any looming large maintenance needs.
“There’s some items that need attention,” Engel said, mentioning that there are some contracts out for some concrete work.
“We’re part of a condo association that was stuck in a cycle where there wasn’t a budget approved for two years,” Engel said. “So, there wasn’t any significant action taken with respect to major maintenance during that period of time. Now, we’re moving out of that.”
There is about $30,000 in needed repairs due to deferred maintenance during the rate dispute, Rick Siebert, the city’s parking manager said.
“We would have paid 70 percent of it anyway,” Siebert said. “We are going to be stuck with the extra 30 percent, based on the fact that we’ve now taken control of the facility.”
Additionally, there will be some expenses incurred by the city to make upgrades to both the Water Street and Market Street garages, Siebert said. This includes upgrading parking equipment in both garages and the cameras in the Water Street garage.
On Oct. 1, long-term parking rates increased. Hourly rates remained at $2 per hour, with the first hour free, which matches the Market Street Parking Garage.
“We’re still on track for a very positive year,” in terms of the parking fund Siebert said.
Final approval of this appropriation is set to appear on the consent agenda of an upcoming meeting.