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BACKGROUND In-lieu parking agreements for properties in the Downtown are authorized by the Municipal Code and are encouraged by the Downtown Specific Plan and Design Guidelines. There are several policies in the Downtown Specific Plan that address sharing and consolidation of Downtown parking lots and the need to acquire land for off- street public parking areas. In addition, the Downtown Design Guidelines indicate that parking should be accommodated in shared facilities at the rear of the property so that parking lots and access driveways are not required on Main Street, where they disrupt the continuous retail building frontage. Specific to the 600 Main Street, project, as a result of an extensive review and approval process, the Planning Commission conditionally approved an approximately 3,896 square foot, two-story addition to the historical Kolln Hardware building, the relocation and restoration of two easterly one-story structures and the elimination of the four on-site parking spaces. Per the Pleasanton Municipal Code, ten parking spaces were required for this project so one condition of approval was that the property owner enter into an in- lieu parking agreement to provide funding for the City to acquire/construct parking spaces off-site and within the Downtown. IN-LIEU PARKING FEE AGREEMENT/AMENDMENTS On September 5, 2005, the City and Peak Property, entered into an In-Lieu Parking Agreement to fund the property's in-lieu parking obligation of$140,000. On February 23, 2009, the parties entered into a First Amendment to the In-Lieu Parking Agreement, extending the repayment period and modifying the timing of the payments. On March 18, 2010, the City Manager — via written correspondence to Peak Property — further modified the timing of the payments in acknowledgement of the owner's difficulty in leasing the property. Given the challenging economic climate since 2006 and the difficulty in finding tenants to occupy all of the leasable space, Peak Property has not made payment to the City toward the agreement. Now that the property is fully leased and the economic climate is improving, the parties seek to further modify the terms of the agreement by entering into a Second Amendment to the Agreement. The original obligation to the City was $140,000. Staff recommends the City credit Peak Property $39,000 for the expense Peak Property incurred in engaging consultant Wayne Rasmussen to manage the project through the development services process, and that the City credit Peak Property $28,500 for providing an economic benefit to the community by restoring the historic "Kolln Hardware" building and providing space for additional downtown businesses. The net fee of $72,500 would be due and payable over five years, ending 2019, with no interest. The credits of $67,500 would be funded by transfers from the responsible funds, including the City's General Fund, to the Downtown Parking Fund. The Second Amendment to the In-Lieu Parking Agreement is attached for the Council's consideration. Staff has continued to work with the property owners on this issue given the extensive amount of investment made in the site, in recognition that the Kolln building is one of the most iconic buildings in downtown Pleasanton. The Kolln building was constructed around 1900 and was home to one of the longest running businesses in Pleasanton, Page 2 of 3