Hoping to provide visitors to the downtown with a few more parking spaces without erecting a new facility, the Santa Monica City Council last week tabbed City Manager Rod Gould to acquire up to 204 stalls in Parking Structure 4. Those spaces are currently “reserved and underutilized” but could be made available to the general public under the proposed agreement.
Once the deal is finalized, City Hall would have access to the 204 parking spaces through Aug. 31, 2031.
City Hall currently has an agreement with 1299 Ocean LLC, the lessee whom currently uses 204 of Parking Structure 4’s 304 spaces.
“The proposed parking agreement amendment would make up to 204 reserved and underutilized parking spaces in Parking Structure 4 available to the public,” a staff report to council members stated. “In return for relinquishing reserved spaces and using only the amount of spaces that are needed by tenants, the City would pay 1299 Ocean LLC … $20 per month for each space not used.”
City Hall entered into an agreement with developer Teleklew Productions, Inc., in 1979, which “paid for and constructed three and one-half levels of parking onto existing Parking Structure No. 4.” Only 100 spaces were dedicated for public use. Teleklew committed to pay City Hall $7.35 per space per month, or $18,000 per year. That amount has since increased to $17.04 per space per month, or $41,713.92 per year.
In 1998, the contract was transferred to 1299 Ocean LLC.
After a 1981 amendment, the 40-year agreement was set to expire Aug. 31, 2021. Under this new contract, the agreement with 1299 Ocean LLC will be extended 10 years.
“During the extended ten-year period, the Lessee would be allowed to purchase up to 204 spaces at the then-current monthly rate, at locations to be determined by the City, with the City making a good-faith effort to locate the spaces in close proximity to the office building and with no obligation to pay the Lessee for any unclaimed parking spaces,” the staff report continued.
The 204 spaces were located on the upper levels of the structure and were dedicated to tenant use; each space was marked “reserved” during weekdays for tenants of 1299 Ocean Avenue.
However, many of the tenants did not actually use the reserved spaces, instead occupying public spaces on lower levels.
“The Lessee’s parking permit holders avoid the reserved parking area and park on the lower parking levels, leaving the reserved area largely vacant and unavailable to the public because of the signage designating the parking spaces as reserved during weekdays,” the staff report stated.
As part of the new agreement, all “reserved” signage will be removed.
Also, 1299 Ocean LLC “may purchase up to 204 parking permits per month for its tenants at 1299 Ocean Avenue” at $17.04 per month, an amount that will increase “annually by the Consumer Price Index.”
City Hall will reimburse 1299 Ocean LLC $20 per space per month for every stall (up to 204) it does not purchase.
According to City Hall, it “will be able to re-sell these parking spaces to monthly parkers, or make the spaces available to daily parkers, at the City’s discretion.”
While the City of Santa Monica earns $41,713.92 per year for these 204 parking spaces, staff told council members the amount does not fully cover maintenance expenses.
“Upon approval of this Agreement, the City will be able to sell additional parking permits, netting the City … $96.56 per month for daily users for each parking space that (1299 Ocean LLC) relinquishes,” according to staff. “Assuming 1299 Ocean LLC relinquishes 100 parking spaces, the City would net from $21,072 to $115,872 in additional revenue per year.”
Parking Structure 4 is located at 1321 Second Street in the downtown.