CITY OF CHARLOTTESVILLE, VIRGINIA CITY COUNCIL AGENDA Agenda Date: June 7, 2021 Action Required: Approval Presenter: Chip Boyles, City Manager Staff Contacts: Lisa Robertson, City Attorney Chris Engel, Director of Economic Development Title: Resolution Halting Action on E. Market St. Parking Structure Background: On May 25, 2021, the City Council had a work session to review and discuss plans related to the City /County inter-governmental memorandum of agreement (MOA) to develop a co-located Court Complex and associated parking near Court Square in downtown Charlottesville. Discussion: Following a presentation by staff and comments from the public, the consensus of council was to not proceed with development of a new parking garage to support the courts needs at this time. The accompanying resolution formally reflects this new direction and rescinds the December 2, 2019 council resolution initiating the project. Attachments: May 25, 2021 Work Session Materials RESOLUTION STATING CITY COUNCIL’S INTENT NOT TO CONSTRUCT A PARKING STRUCTURE AT 7th AND EAST MARKET STREETS WHEREAS, on December 17, 2018, Albemarle County and the City of Charlottesville signed a memorandum of agreement (“Agreement”) to develop a joint court complex located at 350 Park Street in downtown Charlottesville; and WHEREAS, the Agreement contemplates special parking for the County courts, either within a new parking garage structure to be constructed on property owned jointly by the City and the County on land situated at 7th and Market Streets (“Parking Structure”), or via alternative arrangements specified within Section 2.G of the Agreement; and WHEREAS, by resolution adopted in December 2019 City Council directed staff to proceed with development of the Parking Structure, however this City Council is of the opinion that alternative parking arrangements may now be in the best interests of the general public; NOW, THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CHARLOTTESVILLE THAT the City Manager is directed to cancel all pending procurement transactions and to cease all other activities previously commenced to facilitate development of the Parking Structure. City Council Work Session May 25, 2021, 3pm Item #1 City/County Court Complex Memorandum of Agreement Review and Project Update: Council Direction Needed 7th Street Deck Project Background Material for Work Session, May 25, 2021 Background: On December 17, 2018, the County of Albemarle and the City of Charlottesville executed an inter- governmental memorandum of agreement (MOA) to redevelop the Levy Opera House and site located at 350 Park Street to serve as a co-located Court Complex (Attachment 1). The comprehensive agreement memorializes the commitment of each party to the Court Complex and the associated parking required to support it. The agreement has a number of provisions and specifically requires the City to provide the County with 90 parking spaces for their exclusive use in a new downtown garage to be constructed nearby and in operation by November 30, 2023. Since Spring 2019, a team of staff including representatives from Public Works (Facilities Development, Engineering, Facilities Maintenance, and Environmental), Neighborhood Development Services and the Office of Economic Development have been working in conjunction with the engineering firm of Kimley Horn to plan and develop the parking facility project. On December 2, 2019, the City Council unanimously approved a resolution that directed the following actions: 1) directs the necessary funds for the purchase of the County’s portion of the jointly owned parcel, 2) directs the City Manager to authorize all necessary documents related to the closing and 3) directs staff to commence the project as outlined by Kimley Horn in the conceptual design referenced herein as Option C and dated April 2019. To date the following tasks have been completed: • Feasibility study and proof of concept design • Survey and geotechnical investigation • Appraisal and purchase of the land • Approval by Procurement for use of Design-Build as delivery method for this project • Preliminary discussion with the Board of Architectural Review • Development, issuance and receipt of a Request for Qualifications (RFQ) of prospective Design-Build entities with the assistance of professional services • Review of received of Statements of Qualification with the assistance of professional services resulting in a short list of qualified firms prepared to submit project proposals • 95% of the development and preparation of Request for Proposals (RFP) and associated Owners Criteria with the assistance of professional services Funds expended to date (not including city staff time) on the above referenced items total approximately $1,500,000. Discussion: First, recently several councilors have raised questions about the project and have suggested its scope be altered or delayed. The project is at a critical juncture in the process - the issuance of a Request for Proposals (RFP) from Design-Build firms. Due to the approved funding levels in the FY22 CIP and previous discussions, staff is requesting clarification from City Council on how to proceed. Any significant change to the project scope at this time will result in the City not achieving the completion date required in the MOA. In addition, a delay is likely to result in a loss of pre-qualified teams and the possibility of needing to restart the process from the beginning. Secondly, in terms of funding and schedule, the full project budget is $11,340,240 (this includes funding for land acquisition costs). The FY21 CIP allocated $2M to the project. The approved FY22 CIP adds another $1M with the remaining $7M to be included in the FY23 CIP. The approved FY22 CIP does not facilitate the current project schedule for a design build project. Staff cannot proceed with a contract for design-build (anticipated to be approximately $8.5M) until the full amount of funding is allocated and available. In the above referenced funding sequence this would not occur until the start of FY23 (July 1, 2022). The originally anticipated funding sequence called for full funding by start of FY22; the current funding sequent will likely result in a delay in project delivery of at least a year. As the proof of concept plan and related work had been projected to meet the completion date of the MOA of November 30, 2023, proceeding based on the currently approved funding plan will result in the City not achieving the completion date required in the MOA. The MOA provides the County with two options if a new City-owned parking structure is not completed by the November 30, 2023 completion date. Option 1: The City to provide 100 spaces in the Market Street Parking Garage for the County’s exclusive at or below level 2. Option 2: Reconvey one-half interest in the East Market Street parcel and allow County exclusive control of the lot. As neither option adds any new capacity to the parking inventory; both present a challenge in accommodating expected post-COVID-19 parking demand and have operational consequences that impact business and visitors to downtown. Each option is discussed in detail below. Option 1: The City to provide 100 spaces in the Market Street Parking Garage (MSPG) for the County’s exclusive at or below level 2 of the facility. The MSPG was built in 1975 in anticipation of the creation of the downtown pedestrian mall and the associated loss of parking on Main Street. Since that time, the facility has served as the primary parking option for customers, employees and visitors to the mall area as well as municipal functions such as City Hall and the courts. As such, the facility is managed to balance these needs while also providing for maximum efficiency. During normal pre-COVID operations, the MSPG regularly exceeded 90% occupancy at peak during weekday business hours. On particularly high demand days, the facility reaches capacity and is forced to limit access until spaces become available again. In 2019, the facility reached capacity on 91 occasions and access was limited for periods of time ranging from 30 minutes to 4 hours. In addition, for 15 years prior to the COVID-19 pandemic there was an active waiting list for monthly permits at the MSPG. Given the historically high level of usage at the facility, it seems inconceivable that an additional 100 reserved spaces could be accommodated in the structure. In fact, they could not under the current model of operation. The only practical way to do so would be to disallow transient parking Monday – Friday during business hours. To do so (without an equally accessible and attractive alternative option) is contrary to the original purpose of the facility and would cause significant disruption to the general public and the mall area businesses. Option 2: the City to reconvey one-half interest in the East Market Street parcel and allow County exclusive control of the lot. The parcel at the corner of 7th and Market Street was purchased jointly by the City and the County in 2004 as part of a larger property purchase to facilitate a joint courts project. The parcel is currently a 63 space surface parking lot managed by the City. As part of the MOA and with City Council direction in December 2019, the City purchased the County interest and became full owner in April of 2020. Under this scenario, the County would repurchase one-half of the lot at the current fair market value or the equal amount to what the City paid the County, whichever is less. The County would then have sole use of the lot. The City would continue to own half of the lot but have no ability to use it or generate revenue from it for the duration of the agreement. The 63 monthly parkers currently using the lot would be displaced. In summary, if the City does not construct the new parking facility as contemplated in the MOA, the County has the above options to choose from at their sole discretion. In addition, given the target completion date in the MOA of November 30, 2023, if the design-build process is delayed it greatly increases the chances of the facility not being ready and option 1 or 2 becoming the primary options to satisfy County court parking needs. Alternative Options The City may wish to attempt to renegotiate the MOA with the County to alter the terms of the agreement. This requires both parties to be willing to do so and at this point the County is proceeding per the schedule to design the Court building, and we have no reason to believe they are unsatisfied with the agreement as it stands. Staff have identified two additional alternatives for consideration in this category: East Parcel Facility – The feasibility study did assess using only the easternmost parcel to construct a smaller facility. The facility would be four levels with a small amount of commercial space and yield approximately 140-200 parking spaces. Estimated costs are in the $6-8M range. The benefits of this approach include the addition of parking capacity and the preservation of the existing surface lot at 7th & Market for surface parking and/or future development. The disadvantages include fewer parking spaces and a higher cost per space given the smaller development footprint. East Parcel Surface Lot – Develop a surface parking lot on the east parcel site. A preliminary analysis and layout has been completed by staff and suggests that the lot would yield approximately 38 spaces and cost about $1M. The benefits of this approach include the addition of a small amount of parking capacity and the preservation of the existing surface lot at 7th & Market for surface parking and/or future development. The disadvantages include an inefficient use of the property as well as potential loss of investment to develop the parking lot if use is short-term and a high cost per space for a surface lot. Both alternatives may require amendment to the MOA agreeable to both parties. Additional Considerations It has been suggested that the need for additional new parking capacity is unwarranted and that the obligation to the County could be met with one of the alternative options discussed above provided it was coupled with better transportation demand management (TDM) efforts. The 2015 Parking Study conducted by transportation consultant, Nelson Nygaard, did suggest the City pursue TDM strategies in an effort to try and reduce demand and thus relieve pressure on existing parking facilities. Specifically, the creation of a Transportation Management Association was recommended. TMAs are usually non-profit organizations that focus on expanding knowledge of alternatives to commuting in single occupant vehicles. TMAs are common in large metro areas that experience commuter congestion and have multiple alternative transportation options available. To be successful in reducing single occupant vehicle trips, TMAs require consistent funding, dedicated partners and a considerable amount of time. According to American Community Survey data from 2019, local commuting patterns have changed little in recent years with 72% continuing to occur in single occupant vehicles. In an effort to better maximize the value of the land, the project could be made larger and denser and could include other uses such as residential or office space. While this is certainly possible, it is largely dependent on available resources and it creates a significantly more complex project. It also has significant schedule impacts which cannot meet the deadline in the MOA. The permutations of this approach are considerable and as such are not explored in further detail here. Suffice it to say that staff and the consultant did evaluate this option and given the funding and timing constraints of the project chose to recommend the by-right garage with limited commercial on the ground level as referenced in the December 2, 2019 resolution. Staff Recommendation Staff continues to believe that the plan supported by City Council’s December 2, 2019 resolution is a practical solution that meets the requirements of the MOA with the County and provides some additional parking capacity to meet continued high demand in the vicinity of City Hall. Should City Council agree and wish to proceed as quickly as possible a supplemental appropriation of funds ($7M) would be needed. Alternatively, the project can be paused until such time as full funding is available and/or project objectives are clearly redefined. Staff seeks clarification from City Council as to how to proceed. Attachments: 1. Memorandum of Agreement with County for Court Expansion, December 18, 2018 2. Council Resolution Initiating Property Acquisition and Parking Structure Development, December 2, 2019 Transfer CIP Contingency Account for Acquisition of Land at 701 East Market Street $1,280,000 WHEREAS, on December 17, 2018, Albemarle County and the City ofCharlottesville signed a memorandum of agreement to develop ajoint court complex located at 350 Park Street in downtown Charlottesville; and WHEREAS, the agreement is premised on the City's stated intention to construct a parking structure on property owned jointly by the City and the County and adjacent property owned solely by the City, both on East Market Street; and WHEREAS, the agreement stipulates that the City will purchase the County's one-half interest of the jointly owned property following the completion of a professional appraisal; and WHEREAS, the appraisal indicates the value of the County's one-half ownership to be $1,280,000; NOW, THEREFORE BE IT RESOLVED by the Council of the City of Chariottesville, Virginia that funding for purposes of acquiring parcel #530159000 located at 701 East Market is hereby transferred in the following manner: Transfer From? $1,280,000 Fund: 426 WBS: CP-080 G/L Account: 599999 Transfer To $1,280,000 Fund: 426 WBS: P-01008 G/L Account: 599999 BE IT FURTHER RESOLVED that the City Manager is hereby authorized to execute, on behalf of the City ofCharlottesviile, all necessary documents required in conjunction with the aforementioned purchase of property; and BE IT FURTHER RESOLVED that City staff is directed to proceed immediately with development of a parking structure as presented at this meeting, consisting of approximately 300 spaces and 12,000 square feet of street front commercial space, such that the timelines prescribed in the memorandum of agreement can be met. Approved by Council December 2, 2019 Kf^^^2X?v>i^—' 0' Kyna Thomas, CMC Clerk of Council