HomeMy WebLinkAboutStaff Report 183-06City of Palo Alto
City Manager’s Report
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TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: PLANNING
& COMMUNITY ENVIRONMENT
DATE:MARCH 20, 2006 CMR: 183:06
SUBJECT:APPROVAL OF AGREEMENT AND DECLARATION OF COVENANT
TO PROVIDE PARKING AT 130 LYTTON AVENUE BETWEEN THE
KENSON GROUP AND THE CITY OF PALO ALTO
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager to execute the attached
Agreement and Declaration of Covenant to Provide Parking at 130 Lytton Avenue between the
Kenson Group and the City of Palo Alto.
BACKGROUND
In November 2004, the Kenson Group, owners of the property at 130 Lytton, contacted the City
to address a potential future loss of leased parking at the site. The development at 130 Lytton is
part of the 2001/2002 Downtown Parking Assessment District, with building area of 47,234
square feet and a parking obligation of 189 spaces. 118 parking spaces are provided by 130
Lytton, leaving an obligation of 71 spaces under the 2001/2002 Assessment District bond.
Seventy of the 118 spaces associated with130 Lytton are located in a two-story parking structure
located on an adjacent parcel that is leased by the Kenson Group under a parking lease that
expires in September 2014. While it is not anticipated that the leased parking spaces will be
converted to any other use, the Parking Covenant is intended to resolve any uncertainty.
DISCUSSION
130 Lytton is the only property subject to the 2001/2002 Assessment District bond that has a
portion of its credited parking spaces located on leased property owned by another property
owner for which the lease may terminate during the assessment period. There is one other
property with leased parking, but the obligation to provide parking extends beyond the term of
the assessment. Three other properties provide parking offsite, however the subject properties
and the parking location are under the same ownership. In addition, there are six other properties
identified in the Assessment Roll as providing parking on a separate legal parcel. These six
properties all include buildings that cover multiple parcels and parking that is fully integrated
into the site, such that the parking locations could not be independently developed.
CMR: 183:06 Page 1 of 2
In order to compensate for the potential loss of parking, the Kenson Group has agreed to enter
into a Parking Covenant that would guarantee compensation to the City for any loss of parking
associated with the expiration of the lease for parking associated with 130 Lytton. The Covenant
would provide for the payment of a fixed fee based on the Property’s share of the remaining
principal balance of the 2001 and 2002 Downtown Parking District Assessment Bonds at the
time the lease is due to expire. This amount is intended to offset the benefit that would otherwise
be received by 130 Lytton for parking spaces that were improperly credited to the property.
Based on 902 total spaces constructed in the district, the payment would be $34,928 per parking
space lost for a total of $2,444,956 for a loss of all 70 spaces. Any payments would be allocated
to the City’s in-lieu parking fund. The covenant would expire on December 31, 2030--the same
year that the Assessment District bonds will be retired--after which the property owners would
have no further obligation under the agreement. This payment appears to be an equitable
solution that will provide the City with some of the funding to pay for alternative parking.
Palo Alto Municipal Code Section 18.49.100(c) allows for Assessment District parking
requirements to be met by off-site parking as long as there is a binding Agreement and
Declaration of Covenant. This Agreement will satisfy the Municipal Code’ requirements.
RESOURCE IMPACT
This Agreement will have no effect upon the finances of the Assessment District.
POLICY IMPLICATIONS
Kenson Group and the City desire to address the potential future loss of the spaces while
ensuring that the parking requirement is still met. The approach taken is designed for these
unique circumstances and is not designed to set policy for future City actions.
ENVIRONMENTAL REVIEW
There are no environmental impacts from entering into this Agreement.
ATTACHMENTS
A: Agreement and Declaration of Covenant to Provid~e Parkijag-(T30)Lytton Avenue)
PREPARED BY:
~ rl~V~ E~LIE -"" "
Director og Planning and Co--unity Environment
CMR: 183:06 Page 2 of 2
ATTACHMENT A
This document is recorded
for the benefit of the City
of Palo Alto and is entitled
to be recorded free of charge
in accordance with Section 6103
of the Government Code.
After Recordation, mail to:
OFFICE OF THE CITY ATTORNEY
250 Hamilton Avenue
Palo Alto, CA 94301
SPACE ABOVE FOR RECORDER’S USE
AGREEMENT AND DECLARATION OF COVENANT TO PROVIDE PARKING
130 Lytton Avenue
Assessor’s Parcel No. 120-26-002
THIS AGREEMENT AND DECLARATION OF COVENANT TO PROVIDE
PARKING (this "Agreement") is entered into as of ,
2006 by and between the KG-Lytton, LLC, a California Limited
Liability Company, located at 400 Hamilton Avenue, Suite 410,
Palo Alto, CA 94301 ("Owner") and the CITY OF PALO ALTO, a
California chartered city and municipal corporation ("City"),
with reference to the following facts:
RECITALS:
A. Owner is the owner of real property located in the
City of Palo Alto, California, commonly known as 130 Lytton
Avenue and more particularly described in Exhibit ~A" hereto
(the ~Property");
B. The Property is located within the Downtown Parking
Assessment District (~District");
C. The Property has been assessed based on a parking
requirement of one hundred-eighty nine (189) spaces and its
provision of one hundred-eighteen (118) parking spaces. Seventy
(70) of the provided parking spaces are on off-site leased
property, the lease for which expires in 2014;
060315 syn 0120108
D. Palo Alto Municipal Code section 18.49.100(c) allows
for District parking requirements to be met by off-site parking
only when ~sufficient covenants and guarantees are provided to
ensure use and maintenance of such parking facilities .;"
E. The purpose of this Agreement is to allow the Property
to comply with current applicable Palo Alto Municipal Code
parking requirements through the continued use of leased off-
site parking; and
F. Owner acknowledges and agrees that the covenants and
restrictions set forth in this Agreement are reasonable and
acceptable conditions in exchange for the benefits received by
it.
AGREEMENT
NOW, THEREFORE, Owner declares, covenants and agrees
as follows:
i. Agreement to Provide Parking. Owner agrees to provide
one hundred-eighteen (118) parking spaces for the benefit of the
District. Forty eight (48) of the required parking spaces shall
be located at the Property and seventy (70) spaces may be
located off-site on property leased by Owner.
2. Loss of Parking. Should the number of spaces
associated with the Property be reduced, Owner agrees to pay an
in-lieu fee to compensate for the reduction of available parking
spaces within the District. The fee shall be $2,444,956, which
is based on the Property’s estimated allocable share of the
remaining principal balance of the 2001 and 2002 Downtown
Parking District Assessment Bonds at the time the lease is due
to expire. Any fee shall be paid to the City of Palo Alto, and
shall be allocated towards the City’s in-lieu parking fund.
3. Scope of Agreement. The provisions of this Agreement
shall be subject to all easements, rights-of-way and other
matters of record or apparent which are not expressly
subordinated hereto.
4. Termination or Amendment. This Declaration may be
amended or terminated only by written instrument and only with
the mutual written consent of Owner and City.
5. Covenant Running With the Land. Each covenant
contained herein shall be appurtenant to and for the benefit of
050630 syn 0120108
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the Property and of the District, and shall run with the land as
an equitable servitude.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the dates set forth below.
CITY OF PALO ALTO,
a California municipal
corporation
Assistant City Manager
Director of Planning and
Community Environment
APPROVED AS TO FORM:
Senior Deputy City Attorney
a California limited liability
company
Dated:~ ~
Name:
Title:
Dated:
050630 syn 0120052
CERTIFICATE OF ACKNOWLEDGMENT
(Civil Code § 1189)
STATE OF ~ )
/-h On th~h ~~day of ~I/~_ , 2006,--l~efore me,
~[~u ~]~.~D~~personally a~peared ~ ~-O~ ,
pers~naLly-’kno~wn to me or proved to me on the ~asis of
satisfactory evidence to be the person(s~ whose name(~ i._.s/er-~
subscribed to the within instrument and acknowledged to me that
he/s4~ executed the same in his/hor/thci~ authorized
capacity(i~, and that by his/her/their signature(~ on the
instrument the person(~-~, or the entity upon [behalf of] which
the person(s@-acted, executed the instrument.
Notary Pukbl i c
I~ +;~|~; .~.~personally appeared ~,~I~.I~I_ ~-O~C_ ,
~ known to me or proved to me on the basis of
~atisfactory evidence to be the person(~ whose name(~) is/a~
subscribed to the within instrument and acknowledged to me that
~/she/th4~F executed the same in b.~/her/the~i-x authorized
capacity(~), and that by hi-~/her/tb~i~ signature(~4 on the
instrument the person(s~, or the entity upon [behalf of] which
the person(s@- acted, executed the instrument.
050630 syn 0120052
~hand~~_ ficial
No~a~ Public
seal.
EXHIBIT A
130 LYTTON
LEGAL DESCRIPTION
Real property located in the City of Palo Alto, County of Santa Clara, State of
California, described as Parcel One of Parcel Maps filed March 21, 1983, Map Book
510, pages 15 and 16, Santa Clara County Records.
APN 120-26-101
ARB 120-26-001,041
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