Title
Resolution to Approve the Fuller Park Parking Lot Land Lease with the University of Michigan (8 Votes Required)
Memorandum
Attached for your review is a resolution to approve a land lease agreement with the University of Michigan to lease the three parking lots at Fuller Park.
The existing lease expires on August 31, 2021. The term of the new lease agreement is proposed to be for one year, with an option to renew the lease administratively for four additional one-year periods. The proposed new lease includes some notable changes from the expiring one:
• The University agrees to a 3% rental increase for Lot A and Lot C.
• Total annual revenue is $129,448, up from $127,007.
• The City will increase the use in Lot B for the 2 weeks prior Memorial Day to accommodate opening the pool earlier. This usage includes the four northern most rows of the parking lot.
• The City and University have agreed to not increase the rental rate of Lot B to offset that increased use.
The three lots are the existing parking lot south of Fuller Road adjacent to the railroad tracks (Lot A), the paved parking lot north of Fuller Road at Fuller Park (Lot B) and the unpaved parking lot also north of Fuller Road a Fuller Park (Lot C).
Lot A has been leased to the University for parking since 1993. Lots B & C have been leased since 2009. The primary function of the three parking lots is to provide parking for park visitors and the hours that the lots are available for University use is determined with this in mind. For example, Lot B, nearest the pool is not available for University use from two weeks prior to Memorial Day until two weeks after Labor Day. As Park staff have extended the pool schedule beyond traditional summer days, the University has worked with the City to adjust the agreement to help provide additional parking during those shoulder seasons.
The revenue derived from the lease in recognized in the Park & Recreation Services General Fund revenue budget. Annual revenue per terms of the lease will be $129,448 for the September 1, 2021 - August 31, 2022 which is nearly a 2% increase from the current year amount. This increase is related to the City’s increased use of Lot B for the earlier pool opening. If the lease is renewed administratively the lease is subject to annual 3% increases for all three lots.
Exhibit A of the agreement contains provisions for maintenance, security and signage, and specifies the days and times of use. Lot A will be leased to University for twenty-four hours a day, seven days a week. The City shall have the option to use the lot on weekends for special events and other park activities up to ten times annually. Lot B (paved lot) will be leased from 5:00 am to 5:00 pm Monday through Friday, two weeks after Labor Day through the Friday before Memorial Day, excluding holidays. For the two-week period following Labor Day the two southernmost rows of Lot B will be leased to the University. Lot C (unpaved lot) will be leased from 5:00 am to 5:00 pm Monday through Friday, excluding holidays.
Staff
Prepared by: Josh Landefeld, Deputy Manager, Parks and Recreation
Reviewed by: Derek Delacourt, Community Services Area Administrator
Approved by: Tom Crawford, City Administrator
Body
Whereas, On September 29, 1993, an agreement was entered into between the City of Ann Arbor and University of Michigan for the establishment and operation of a parking lot on City-owned property at Fuller Park, located south of Fuller Road;
Whereas, The parking lots north of Fuller Road have been leased to the University since 2009;
Whereas, The lease generates significant revenue for the Parks & Recreation General Fund;
Whereas, It is the desire of the City and the University to continue the lease arrangement;
Whereas, The City Administrator hereby recommends that the City not expend the money on an appraisal report prior to execution of this lease, per Chapter 14, Section 1:321 of the Municipal Code, as the University’s parking pass information is public; and
Whereas, The term of the agreement shall be one year, with an option to administratively renew the lease for two additional one-year terms;
RESOLVED, That an appraisal report is not necessary as the City is receiving a fair rental rate relative to the University parking pass rates for their proportionate use of the parking spots;
RESOLVED, That City Council approve the attached Fuller Park Parking Lot Land Lease with the University of Michigan (“Lease”) for one-year;
RESOLVED, That the Mayor and City Clerk be authorized and directed to execute the Lease after approval as to substance by the City Administrator and approval as to form by the City Attorney; and
RESOLVED, That the City Administrator be authorized to execute two one-year administrative renewals of the lease if deemed in the best interest of the City and to take such other actions necessary to implement this Resolution.
As Amended and Approved by Ann Arbor City Council on August 2, 2021.