City officials, seeing an exasperated downtown parking crisis looming in the near future, are looking for as many parking spaces as they can find. One option in that effort is negotiating for the return of unused spaces leased by a private company. That company wants more of a special arrangement than City officials had in mind.
As it has been functioning, more than 155 monthly-parking spaces are left vacant at Parking Structure No. 2 located at 100 Wilshire Boulevard that could be used to wrangle some of the frustrated overflow of drivers downtown. This agreement would essentially pay Douglas Emmett 1998, LLC about $2,000 a year in order to relinquish the unused spaces that it leases.
Douglas Emmett does not want to hand over the unused parking spaces without partaking in the additional profits the City will make from leasing the spaces individually on a daily or monthly basis.
Council member Kevin McKeown urged City staff to renegotiate with the company, despite what was described by staff as a “resolute” position to receive $20 per spot, more than half of the profits the City stands to gain from individually leasing the spaces by month (the City estimated it would make only $38). If the City makes the spaces available to daily parkers, it stands to make $89 per spot and Douglas Emmett’s cut remains the same.
“Giving public money to private business is a very disturbing precedent,” McKeown said. Acknowledging obvious advantages to the City to obtain the spaces, including a possible $60,000 net profit with daily parking, he warned against the major compromise.
The current agreement with Douglas Emmett requires about $28,000 a year for the 155 spaces. The company countered the proposal from the City in January to break the lease for the spaces as well as demanding $24,000 a year from the City to instead use the spaces.
Staff explained even with the reversed payments the City will “end up ahead of the game” by still making anywhere between $20,000 and $60,000 in net profits.
Officials are scrambling to find additional parking before renovating Parking Structure 6 resulting in 681 fewer spots during construction. A proposed project still in separate negotiations for a new AMC theater downtown is expected to demolish Parking Structure 3, resulting in 324 lost parking spaces downtown, making alternative options necessary. City planners anticipate the likelihood of concurrent demolition of the structures.
This is the third agreement the City has entered since 1968 over the parking structure with private companies. Negotiated in 1998, the lease allowed the spaces to be reduced from 380 spaces to the current number on the top floor of the parking structure. The fourth amendment still up for negotiations will allow Douglas Emmett to only pay for the needed spaces up to 150 per month and park anywhere in the structure.
The proposed fourth amendment stemmed from the City-funded Walker Parking Study, which evaluated parking operations to find improve revenue sources and parking alternatives to alleviate crunches.
Council member Richard Bloom squashed any further public discussion for fear of allowing the City to “air our cards on the table.” The Council unanimously approved staff and City Manager Ron Gould to go back to the bargaining table and out of the public eye.
