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Home My WebLink AboutDTS-06-001 - Epton Parking Lot Development Business CaseDate of Report: January 4, 2006 Report No.: DTS 06 -001 Subject: EPTON PARKING LOT DEVELOPMENT BUSINESS CASE RECOMMENDATIONS: "That Council approve the development of a surface parking lot on the Epton lands as outlined in the attached business case during the 2006 construction season, and further; That funds in the amount of $1.2 million be taken from the Economic Development Investment Fund for the development of this lot, with net revenues from this lot used to pay back the capital development costs. Upon occupancy of these spaces for future phases of the University Campus, any outstanding balance of the capital costs be recovered from the University of Waterloo." BACKGROUND: The City, in partnership with the University of Waterloo, has identified a need and developed a vision to locate a Health Sciences Campus in Downtown Kitchener anchored by the School of Pharmacy. This is supportive of the City's economic development strategy which includes a focus on building an education and knowledge creation cluster in the Downtown. The opportunity exists to develop additional surface parking on the Epton site to meet both the City's existing and committed demand for long term parking as well as the requirements of Phase 1 of the School of Pharmacy. REPORT: The parking lot developed on the existing Epton site (including lands leased from the Ontario Seed Company) consists of 450 spaces. It provides long term parking for approximately 167 monthly parkers. With the development of Phase 1 of the School of Pharmacy, approximately 300 spaces will be lost due to construction. The City has made a commitment to Wilfrid Laurier 4 University School of Social Work to provide up to 175 parking spaces as of Sept 2006 to accommodate their needs. The intent is to provide these spaces on the Epton site. The opportunity exists, to develop additional surface parking on the Epton site to meet the City's existing and committed needs as well as the future needs of the School of Pharmacy. The construction of Phase 1 of the School of Pharmacy is tentatively scheduled to start in March 2006 resulting in the immediate loss of about 300 parking spaces. It is intended that this parking lot expansion be undertaken as part of the City's general road contract and that it be one of the first projects scheduled in 2006. It should take approximately 2 months to complete and occupancy is anticipated by June 30, 2006. The intent is to have the City provide the initial capital funding for the development of the surface parking lot. The City would then be entitled to operate a municipal parking lot for at least three (3) years, commencing May 1, 2006 and until such time as the City had recouped its capital costs for the development of the parking lot through the revenue generated from the operation of the parking lot minus any costs to operate the parking lot. After the three (3) year period, or until such time as the University requires the land for incorporation into the University Campus, the City will continue to operate the municipal parking lot. At such time as the University requires this land for continued expansion of the Campus, if the City's capital costs to develop the parking lot have not been fully recouped, the University will pay the City for any outstanding capital costs. The capital construction costs have been estimated to be approximately $1.2 million. This allows for the development of approximately 279 additional parking spaces in the undeveloped area between the existing parking areas, Ontario Seed Property and the railway tracks as well as provide a 3 m setback from Victoria St to be in compliance with the City's Zoning Bylaw. A number of reasonable assumptions were made with respect to the lighting fixtures, landscaping, the removal and replacement of contaminated soil, etc, based on a preliminary parking design. A 10 % contingency, as well as $100,000 for engineering fees, landscape plans, storm water management plans, lighting plans and site grading plans have been included. As far as revenues generated, there are currently 167 monthly parkers that will be paying approx $55 per month and there will also be up to 175 WLU parkers at $55 per month ($40 per month plus a $15 EDIF subsidy). This would generate revenues of approximately $215,000 per year upon full annualization (only 150 WLU spaces assumed to be occupied). This would result in approximately $150,000 net annual revenue to the City and equate to about an 8 year payback. The payback period is subject to leasing rates, and may be reduced if additional surplus spaces are provided to the City. FINANCIAL IMPLICATIONS: Funding for the construction of this parking lot in the amount of $1.2 M is to be taken from the Economic Development Investment Fund. Net revenues generated by this lot would be used to payback the development costs. In the event that the University requires these lands prior to the initial development costs being recouped, the University will reimburse the City for any outstanding capital costs. The 2006 Operating Budget includes net revenues of approximately $24,000 from the operation of the existing surface lot. The use of net revenues from this lot to pay back the development costs, will result in a reduction of $24,000 from general City revenue. CONCLUSIONS: The development of the surface parking lot at the Epton site will satisfy both the City's short term parking demand as well as the University's long term parking needs as other phases of development come on stream. The manner in which the agreement between the City and University is structured, will ensure that the City recoups its development costs, either through operating revenues or as a payout from the University if those spaces are required prior to the recovery of all capital development costs. John P. McBride Director Transportation Planning Hans N. Gross, P. Eng. Director of Project Administration & Economic Investment Rob Shamess, P. Eng Director of Engineering R 4 .. iii 'i�E'- a,i[�k -, t ".SI.Rr�„- L��o•� :g - r p MR _ �i Jt�.: 7i% dZ` z["' �•`.' Xif"^- :7Y' °- .c:]/n-'^tk;rrai:T,�i�:; l_•.'.`_731xk..ri:� fyy��'^^hf.� _ `_. � � - _ ttJJ Ah'•��'a SS x!-�S[i -�: rte. 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