Title
Authorization to Enter into a Parking Agreement with Quicken Loans
Description
Request authorization for the City Manager, or his designee, to enter into a Parking Agreement with Quicken Loans for spaces located in the East Parking Garage, located at 601 E. Washington St.
Report
Summary
As Community and Economic Development Department (CEDD) staff work with site selectors, corporate real estate executives, brokers and tenants on site decision locations into the Phoenix market, a common challenge heard from both the tenants, and their representatives, is the perceived lack of available parking in the Downtown and Midtown submarkets, along Central Avenue between 7th Avenue and 7th Street. While light rail and bus service is a tremendous benefit in these submarkets, to qualify for a project, a building must meet all of the criteria listed. Parking is consistently a top requirement to make a list for a tenant’s consideration. In today’s marketplace, that office parking requirement is typically 5 to 8 spaces/1,000 square feet of leased building space. As a comparison, buildings in the Central City were constructed during a time when parking densities were much lower, with existing buildings parking on average 3 to 4 spaces/1,000 square feet.
While employees will take advantage of mass transit, the Central City is frequently not under consideration for projects that it meets all requirements, except parking. Due in part to these challenges, the Central City’s office vacancy rate trends higher than the Region’s average.
Staff has worked with Quicken Loans to secure office space in Downtown Phoenix. This company will bring more than 1,100 jobs into Downtown, adding new activity into the market. No building in Downtown Phoenix could meet their parking requirement, so staff worked closely with the company to identify City-owned parking spaces that would meet their need. Staff has identified ample spaces available in the East Parking Garage, located at 601 E. Washington St. Quicken Loans has agreed to a long-term parking agreement, at prevailing market rate that will be subject to change based on the City's parking rate increases over time. The terms proposed are as follows:
-Quicken Loans will have the right to purchase up to 1,100 monthly parking passes from the City of Phoenix and Phoenix Convention Center.
-For the first year of the contract term Quicken Loans will pay $50 per month per parking pass. Thereafter Quicken Loans will pay the prevailing market rate for the occupied spaces for the term of the agreement.
-The Term of the agreement is for 10 years, renewable by Quicken Loans for two five-year terms if Quicken Loans conterminously extends their office lease in Downtown Phoenix.
Quicken Loans is a major employer in the Financial Services Sector, which is one of the identified Sector Strategy initiatives in the Community and Economic Development Strategic Plan. Bringing this significant employer, along with their workforce of more than 1,000 employees, will bring substantial new economic activity and vibrancy into Downtown Phoenix.
Contract Term
This contract is for a 10-year term, renewable by Quicken Loans for two consecutive five-year terms, if Quicken Loans conterminously extends their office lease in Downtown Phoenix.
Financial Impact
This is a revenue generating contract. Revenue generated from up to 1,100 parking spaces, as needed, in the East Garage will be deposited to the Phoenix Convention Center.
Location
East Parking Garage located at 601 E. Washington St.
Department
Responsible Department
This item is submitted by Deputy City Manager Paul Blue, the Community and Economic Development Department and the Phoenix Convention Center.