06152010 31ST STREET PARKING LEASE31St Garage Parking Lease
31 Ocean/Hilton Expansion
City Council Briefing
June 15, 2010
Laskin Road Gateway
Beach Centre Laskin
Gateway Phase 3
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Pro'ect Area
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Property Ownership
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Proposed Hotel Description
• 120 -150 rooms based on FAA E . ~ :. ~-~
Regulations and/or Applicable
Law (primarily zoning)
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• Extension of Hilton Hotel or 3 a~i
Star, National Franchise ~'_`
complimentary to the 31St
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• 6,500 SF ground level retail
• 7,500 SF Meeting Space
• $30,000,000 Developer
investment
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Lease Amendment Requests
• Additional 60 spaces leased through an
amendment to the existing Virginia Beach
Development Authority (VBDA) Lease.
• Extend existing term of 380 space parking lease
to be concurrent with the new 60 space parking
lease (65 years).
• Extend the term of the ground lease for the land
under the hotel to be concurrent with the new
parking lease.
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Pedestrian Bridge Walkway Request
• Term Sheet does NOT
approve a pedestrian
bridge walkway.
• Request only if new
hotel is an expansion of
the Hilton Hotel.
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• All costs for a
pedestrian bridge walkway
by the developer.
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Hotel Impact (for 150 rooms)
• Net New Fiscal Impact (local tax revenue):
$1M to $1.5M at stabilization.
• Room Nights: 43,800 a year at stabilization.
• New Jobs: 150.
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31St Street Garage Numbers
•974 Spaces (380 Hotel, 531 Public, 63 Retail ).
•Hilton Hotel Leases 380 spaces.
•Hilton Hotel requires 290 spaces (+90 available).
•Gold Key/Professional Hospitality Resourses (GK/PHR)
requests a lease of additional 60 spaces for new hotel.
• 31St Garage is at peak use approximately 28 days a
year, loss of 60 spaces will increase peak days to 35
days a year (+7).
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Proposed 31St Street Garage Lease
•Market Rate: $840 a space per year with 10%
escalator compounded every 5 years.
•Term: 65 Year Term through an amendment to the
existing VBDA lease.
•Lease Termination: If GK/PHR assembles Block D,
VBDA with City consent can terminate lease for 60
spaces in 31St garage.
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City Option to Lease
90 Parking Spaces from Gold Key
• Location: GK/PHR will provide the City an option to lease 90
parking spaces at the GK/PHR parking garage located at 34tH
Street or at one that may be developed at a GK/PHR project
wiithin the Laskin Road Corridor.
• Term: Two years from approval of the certificate of occupancy
for the new hotel. (The total time before option execution is
approximately 5-8 years from now.)
• Lease Rate equal to 31St Street Garage Rate: The total lease
rate for 90 parking spaces will be equal to the total lease rate
far the 60 parking spaces in the City's 31St Street garage.
LE~ase of 90 Parking Spaces from GK/PHR
• 2A Year Initial Term: City initial term is 20 years with additional
optional five year extensions up to and not to exceed 65 years
(concurrent with 60 space lease at 31St Street Garage).
• Management: GK/PHR will manage the 90 parking spaces in
the 34th Street garage or other location and provide accounting
and allow for oversight of collected revenue. Spaces to be in
sE~cond, third and fourth levels.
• Revenue and Rates: City receives all revenues from the 90
spaces less a management fee not to exceed 5%. All spaces will
be clearly designated and advertised for public use at the
municipal rates.
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Opportunities & Benefits
• Supports $30 million private hotel development.
• Generates in excess of $1 million a year in new tax
revenue to the City.
• Creates 43,000 new room nights a year and 150 new
jobs.
• Spreads out parking along the oceanfront diluting
congestion in the 31St Street/Atlantic Avenue area.
• Provides an increase of public parking at municipal
rates (with option agreement).
• Continues Laskin Road Gateway Project.
• No cost participation from the City.
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Timeline
• Briefing to VBDA on June 15, 2010.
• Public Briefing to City Council June 15, 2010.
• Consideration of Term Sheet by City Council
June 22, 2010.
• Consideration of Term Sheet (if approved by
Council) by VBDA prior to July 15, 2010.
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Questions
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