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CITY OF <br />F NEWPORT REACH <br />City Council Staff Report <br />November 25, 2014 <br />Agenda Item No. 23 <br />TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL <br />FROM: Dave Kiff, City Manager— (949) 644 -3002, dkiff <br />PREPARED BY: Dave Kiff <br />PHONE: (949) 644 -3002 <br />TITLE: ExplorOcean Option to Lease City Parking Lot at Palm Street <br />ABSTRACT: <br />If approved, this agenda item would enable ExplorOcean to hold an option to lease City -owned property <br />known as the Palm Street Parking Lot on the Balboa Peninsula, with the expected intent of ExplorOcean <br />to pursue CEQA, funding, and other approvals for a parking structure at the location in conjunction with the <br />development of their adjacent facility. <br />RECOMMENDATION: <br />Authorize the Mayor and City Clerk to execute an Option to Ground Lease Agreement with ExplorOcean <br />for a future Ground Lease of the Palm Street parking lot at 209 Washington Street and 600 -608 East <br />Balboa Boulevard on the Balboa Peninsula. <br />FUNDING REQUIREMENTS: <br />The Option to Lease would generate $2,500.00 in a one -time payment to the City. If the option was <br />executed, the estimated current day revenue from the parking lot is about $198,000, less about $7,500 in <br />expenses, obligating a payment from ExplorOcean to the City of at least $190,500.00 per year. <br />DISCUSSION: <br />The City of Newport Beach ( "City ") owns and operates the Palm Street parking lot ( "Lot ") at 209 <br />Washington Street and 600 -608 East Balboa Boulevard on the Balboa Peninsula. The Lot is depicted in <br />Attachment A. The City purchased land under what is about half of the Lot (209 Washington Street) for <br />$3.5 million in 2010 to provide parking that supports the revitalization of the Balboa Village area. The City <br />purchased the other half (600 -608 East Balboa Boulevard) about 20 years ago for $800,000 plus a <br />provision for a 20 -year, $1 a year lease to Wells Fargo to operate an ATM at the Lot. Today, the Lot <br />consists of 68 pay- station metered spaces, with 13 on- street parking spots (also metered) adjacent to the <br />Lot. <br />23 -1 <br />