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BACKGROUND The parking lot between St Mary Street and Division Street, adjacent to the railroad corridor, was recognized as a temporary parking lot in the Downtown Parking Strategy and Implementation Plan adopted by City Council on April 18, 2017. The plan identified the lot for use by downtown business employees or attendees during special events. The parking lot is comprised of a City-owned parcel of land (APN 94-125-7-1) and a portion of UPPR's parcel of land (APN 094-125-7-2). The City's parcel has been undeveloped since the construction of Anderson Street in 1990. The area has been used for temporary parking, primarily during the Alameda County Fair. The Order of Demolay leased the western half of the parking area from UPPR for Alameda County Fair event parking until May 2021. In 2016, the City added gravel, striping and signage and promoted the use of the parking lot as downtown parking. The parking lot is scheduled to have lights installed this fall as part of the Lighting Improvements on St Mary Street from Peters Avenue to the City/Railroad Parking Lot Project, CIP No. 20462. The lighting is proposed to be installed on the City-owned portion of the lot. DISCUSSION In May 2022, UPPR contacted the City about leasing the eastern 30 feet of its parcel, which is the western half of the current St Mary Street parking lot. The gravel parking lot accommodates a total of 43 parking stalls, including 22 stalls that encroach onto UPPR's property. The lease agreement will allow for the continued use of the western half of the parking lot. If the City does not enter into the lease agreement, entry and parking will no longer be allowed on the western side of the current parking area. Continuing to allow parking in the eastern portion will require the layout of the parking on the City-owned property to be reconfigured, although it is estimated that the capacity of the reconfigured City lot would remain at 21 parking stalls. The parking lot's popularity has been increasing, however, the use is still low overall, with minimal use during the day and an increase in use in the evening. No formal study has been conducted but visual observations have identified that about half of the parking spaces are in use during peak periods. The lease agreement is for an annual term of$5,000 per year that automatically extends from year-to-year and is subject to a three percent annual adjustment in cost. Additionally, the lease agreement allows UPRR to redetermine the fixed rent no more frequently than once every three years. If the premises are specially assessed for public improvements by the county tax assessor's office, the annual rent will automatically be increased by 12 percent of the full assessment amount. The parking lot is scheduled to have lights installed this fall as part of the Lighting Improvements on St Mary Street from Peters Avenue to the City/Railroad Parking Lot Project, CIP No. 20462, to improve the safety and promote the use of the lot. The lighting project as it is being designed intends to install the light standards on the City Page 2of3