Title
AUTHORIZATION TO ENTER INTO A LICENSE AGREEMENT WITH SP PLUS CORPORATION TO USE CITY-OWNED PROPERTY FOR PARKING ASSOCIATED WITH NATIONAL FOOTBALL LEAGUE GAMES TAKING PLACE AFTER JANUARY 1, 2015 THROUGH FEBRUARY 1, 2015
Staff Contact: Jean Moreno, Program Administrator, Office of Economic Development
end
Purpose and Recommended Action
Recommendation
This is a request for City Council to waive reading beyond the title and adopt a resolution authorizing the City Manager to enter into a License Agreement with SP Plus Corporation allowing the use of city-owned property located in the vicinity of Bethany Home Road and the Agua Fria Freeway (Loop 101) to be utilized for parking uses associated with National Football League games taking place after January 1, 2015 through February 1, 2015 in exchange for license consideration with an in-kind value of $202,500 benefitting the City of Glendale.
body
Background
In 2011, the City Council adopted Resolution 4502 in support of Super Bowl XLIX to be held at the University of Phoenix Stadium in Glendale, Arizona asserting that the Super Bowl and Official Events would generate goodwill, enhance the worldwide renown and prestige of the City of Glendale, create jobs, and create substantial beneficial economic and fiscal activity for the State of Arizona. In conjunction with Super Bowl XLIX to be played on February 1, 2015, the National Football League (NFL) has also chosen the University of Phoenix Stadium (Stadium) as the venue for the 2015 Pro Bowl to be held on January 25, 2015.
In support of Super Bowl XLIX, the Arizona Super Bowl Host Committee (Host Committee) is required to provide 35,000 parking spaces within one mile of the Stadium grounds for game day operations. The City has fulfilled its only obligation pertaining to Super Bowl XLIX parking requirements by producing the standard allocation of parking spaces (11,000) in accordance with a contractual obligation to the Arizona Sports and Tourism Authority (AZSTA). In addition to the City's standard allocation, there are 13,000+ spaces located in the lots immediately adjacent to the Stadium, making the total parking inventory available to the Host Committee for these events 25,405 spaces as described in Exhibit B of the attached License Agreement. The remaining parking allocation to be identified by the Host Committee is approximately 10,000 spaces.
In an effort to bridge the gap, the City was asked to make city-owned property located on the northeast corner of 99th Avenue and Bethany Home Road (License Area) available for parking use. This particular parcel can accommodate approximately 2,000 vehicles and SP Plus Corporation intends to secure additional privately-owned parcels in the area to fulfill the remainder of the Host Committee's obligation.
Analysis
Under the terms of the proposed agreement, for its right to use the License Area beginning January 1, 2015 through February 14, 2015, SP Plus Corporation will provide the following in-kind considerations valued at $202,500 as payment for such use:
1. Assume the City's obligation to the NFL for the operation of a Park and Ride shuttle system during the operating days and hours of the Super Bowl at no cost to the City (valued at $200,000).
2. Provide twenty-five (25) parking spaces for the City's use during the Pro Bowl and Super Bowl events. Spaces are to be located on Lot H, east of the Hampton Hotel property in the vicinity of the stadium (minimum value of $2,500).
In 2008, the City operated a shuttle from the downtown parking garage to the stadium at a cost of approximately $97,000. By adopting a resolution in support of the bid for Super Bowl XLIX, the City agreed to operate a Park and Ride shuttle system during the operating days and hours of the 2015 game either free or at a reasonable cost to the public. This anticipated expense was accounted for in the development of the Fiscal Year 2014-15 National Events operating budget resulting in an allocation of $200,000 for that purpose.
Also in 2008, the City controlled the open parking lots immediately to the east of the Media Center which were allocated to media outlets using our facility. The City no longer controls the open parking that was previously used for media and therefore requested an allocation of spaces near the Media Center for the City's discretionary use on Pro Bowl and Super Bowl game days.
This proposed agreement limits the permitted use of the License Area to parking and parking related activities (including tailgating) for patrons attending the events or personnel working the events and no other use. SP Plus Corporation will, at its sole cost, construct improvements to the property to create a firm, level surface to accommodate both the parking of motor vehicles and the ingress and egress of pedestrians and vehicles. These improvements may include adding dirt, gravel, or milled asphalt; grading, rolling, and packing the surface; and painting lines. All materials added to the property will be considered improvements and will not be removed.
Under the terms of the proposed agreement, SP Plus Corporation will secure the necessary insurance, provide indemnification, and secure construction bonds. They will be responsible for managing the parking operations entirely which includes placing necessary light towers, directional signage, portable restrooms, and fencing. SP Plus Corporation will be responsible for setting the price for parking and managing the sale of parking spaces. They will also be responsible for all costs and will retain all parking revenue. There is no obligation whatsoever on the part of the City for any aspects of the parking operation or associated costs.
To protect the City's other interests relating to the use of the property, the proposed agreement includes accommodations for the Digital Billboard Placement License Agreement approved by City Council on September 9, 2014, as well as, the City's right to initiate license agreements to place mobile cellular on wheels devices on this property.
In order to determine whether the in-kind proposal would be of benefit to the City, staff conducted a cost-benefit analysis. The City's estimated cost to prepare the lot for a parking use is approximately $430,000 and does not include the cost to operate the lot on game days. As previously mentioned, this property can accommodate parking for approximately 2,000 vehicles and the parking vendor advised that the estimated retail price for a parking pass on this property is $50.00 per vehicle because the property is located on the west side of the freeway and is not paved. If the entire lot were sold for two events, the estimated gross revenue would be $200,000 resulting in an operating loss.
In addition, due to its proximity to the stadium, for public safety reasons this property is subject to temporary restrictions on commercial activity during the week leading up to Super Bowl XLIX and may not be utilized for non-NFL commissioned activities. As such, it was determined that the $202,500 in-kind value as proposed in the License Agreement exceeds any revenue potential the City might have for the property during the Super Bowl period, poses no fiscal risk to the City, and assists in meeting the NFL's required parking allocation for the events.
Previous Related Council Action
On June 28, 2011 the City Council adopted Resolution No. 4502 New Series, a Resolution of the Council of the City of Glendale, Maricopa County, Arizona, in support of the bid to host Super Bowl XLIX in 2015 at the University of Phoenix Stadium in Glendale, Arizona; and providing assurances in support of said bid.
On June 10, 2014 the City Council adopted Resolution No. 4812 New Series, a Resolution of the Council of the City of Glendale, Maricopa County, Arizona, adopting the estimates of the amounts required for the public expense for the City of Glendale for the Fiscal Year 2014-15; and, adopting a final budget. This adopted budget included an allocation of $200,000 for the provision of shuttle services related to Super Bowl XLIX.
Community Benefit/Public Involvement
Entering into the proposed agreement with SP Plus Corporation is beneficial to the residents of the City of Glendale, primarily because it will have the effect of saving approximately $200,000 that the City was obligated to expend for a Park and Ride shuttle operation in conjunction with Super Bowl XLIX. Furthermore, the City does not take on any risk or responsibility associated with the parking operation; and, this agreement supports the efforts of the Arizona Super Bowl Host Committee and the State of Arizona in hosting two highly successful, nationally acclaimed events in our community.
Budget and Financial Impacts
There is no expenditure required by the City to enter into this agreement. The net effect for the City's General Fund operating budget is the elimination of an estimated $200,000 budgeted expense in National Events 1010-16360-518200.