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Approve a Parking Management Agreement with Six Flags Discovery Kingdom for the use of parking spaces located at the Solano County Fairgrounds from April 3, 2012 to January 31, 2013; and Authorize the Director of General Services to execute the agreement and any subsequent amendments
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Published Notice Required? Yes _____ No __X___
Public Hearing Required? Yes _____ No __X___
DEPARTMENTAL RECOMMENDATION
The Department of General Services recommends that the Board of Supervisors:
1. Approve a Parking Management Agreement with Six Flags Discovery Kingdom for the use of parking spaces located at the Solano County Fairgrounds from April 3, 2012 to January 31, 2013; and
2. Authorize the Director of General Services to execute the agreement and any subsequent modifications or amendments.
SUMMARY:
The Solano County Fairgrounds are located on County-owned property located at 900 Fairgrounds Drive in Vallejo. There are approximately 3,400 parking spaces on the Fairgrounds property that Six Flags has used for overflow parking for its operations under a June 2000 Lease and Parking Agreement between the County and the Marine World Joint Powers Authority, which was comprised of the City of Vallejo and the City of Vallejo Redevelopment Agency. This agreement terminated on December 31, 2011. The Parking Management Agreement will generate a minimum of $275,000 in revenue to the County and allow Six Flags to continue to use the Fairgrounds parking spaces until January 31, 2013, at which time it is anticipated that negotiations for a longer term agreement will be completed.
FINANCIAL IMPACT:
A minimum of $275,000 in guaranteed rent will be received from Six Flags with additional percentage rent due based on a graduated schedule of gross parking tickets valued at $15 per vehicle. Based on actual use of the Fairgrounds parking lot in 2011 and projected use for 2012, the additional percentage rent is estimated to be between $112,000 and $185,000.
In accordance with past practice, revenue from the use of the Fairgrounds parking lot is used to support Fairgrounds operations. The $275,000 in guaranteed rent will be paid directly to the Fair in two installments of $137,500 on July 1, 2012 and November 1, 2012. The additional percentage rent will be paid directly to the County on a monthly basis. At the conclusion of the 2012 season, a report will be presented to the Board with recommendations for the use of any percentage rent received, including funding for future improvements to the Fairgrounds parking lot.
DISCUSSION:
The negotiated Parking Management Agreement (Attachment A) is structured as an interim agreement until a longer term arrangement can be agreed upon by Six Flags and the County. The Parking Management Agreement will ensure that Six Flags has the necessary parking accommodations during the 2012 season. The County reserves the right to use the parking spaces for Fairgrounds customers.
The previous Parking Agreement required the Marine World JPA to pay $135,000 in base rent to the County, which was deposited in the Solano County Fairgrounds Association operating budget. In addition, the Marine World JPA was required to pay approximately $77,000 for the Phase I of the Fairgrounds Drive Assessment District assessment bonds. Additional rent (30%) was owed for revenue over $600,000, 10% over $700,000, and $4.95 per complimentary parking pass. Since 2005, the average annual payment made by the Marine World JPA was approximately $270,000 and total annual revenues received by the Solano County Fairgrounds Association were approximately $165,000 of that amount.
With approval of the new Parking Management Agreement, the County will receive minimum rent of $275,000 for the use of the Fairgrounds parking area (Exhibit A of Attachment A). Additional percentage rent will be due, calculated based on a value of $15 per car, including complimentary parking passes, in excess of $275,000 per the following graduated percentage rent schedule: 50% between $275,001 and $400,000; 40% between $400,001 and $500,000; and 30% over $500,000. Six Flags will continue to staff and operate the parking facility in cooperation with the Solano County Fair. Six Flags will also comply with the parking operations, management, and reporting requirements of the Parking Operations Management Plan (Exhibit C of Attachment A).
ALTERNATIVES:
The Board could choose not to approve the Parking Management Agreement. This alternative is not recommended as the agreement provides Six Flags with the necessary parking spaces for its operations and provides an increase in overall revenues to the County.
OTHER AGENCY INVOLVEMENT:
County Counsel has reviewed and approved the Parking Management Agreement as to form. The Solano County Fairgrounds General Manager was involved in the development of the Parking Management Agreement.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION