Mall hotel strikes bargain for parking

Mall hotel strikes bargain for parking

So here’s a fun little problem: You’ve got plans for a 101-room boutique hotel on the Downtown Mall. The Mall has almost everything your upper-crust hotel dweller could ever want. Jewelry store? Check. High-end stationery? Oh yeah. Fine dining? Yup. Buskers to get you some of that local flavor? Sure. Parking? Well…

For all of the Mall’s attributes, a spot to park your Beamer or Benz isn’t one of them. And so with nine stories of rooms to fill, the problem of where to park the cars before parking the guests became very real for the hotel’s developers, Lee Danielson and Halsey Minor. But with the help of the city, it appears a solution is close at hand.

The city is shuffling some parking spaces at the Water Street Garage for the new Mall hotel developers.

The developers are in the final stages of working out a deal with the city to lease 70 spaces in the Water Street Garage, just south of the Mall. The garage is jointly owned by the city, Charlottesville Parking Center Inc. (CPC) and Jefferson Properties Inc. The city owns 629 of the 1,019 parking spaces, while CPC and Jefferson Properties own 284 and 106 respectively.

The hotel wants a 60-year lease for the 70 spaces. That’s a problem for the city, since the Virginia law governing leases of city-owned property says that any lease of more than five years can only be awarded after a competitive bidding process. The maximum term for such a lease is 40 years, a term much shorter than the hotel wants. The solution? Juggle some parking spaces between owners.

The CPC, a private business, isn’t bound by the same law as the city, so the hotel is requesting a good old parking space switcheroo. Here’s how it would work: The city would give CPC 49 spaces within a limited-access area, and CPC would give up 49 spaces elsewhere in the garage to the city. Thus having more than enough parking spaces for the hotel, CPC would then lease it the spaces. The deal would skirt Virginia state law and wouldn’t necessitate a bidding process.

According to city staff reports, Minor and Danielson want the spaces quick-like. A long-term lease is necessary for the developers to close on financing for the hotel. The lease that’s currently on the table—an initial term of 20 years with the right to renew for two more 20-year terms—would apparently satisfy their lenders.

Whether the spaces are leased to the hotel is of little financial concern to the city. Under the revenue-sharing agreement, all income from the lease of parking spaces, no matter where they are in the garage, is allocated between the CPC and the city.

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