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THE CITY OF 8 CITY COUNCIL AGENDA REPORT PLEASANTON. July 19, 2022 Engineering TITLE: APPROVE A LEASE AGREEMENT WITH UNION PACIFIC RAILROAD TO UTILIZE A PORTION OF ITS PROPERTY AS A PARKING LOT BETWEEN ST MARY STREET AND DIVISION STREET SUMMARY The gravel parking lot between St Mary Street and Division Street, adjacent to the railroad corridor, is comprised of a City-owned parcel on the east side and property owned by Union Pacific Railroad (UPPR) on the west side. While the City installed gravel over both properties several years ago to create the parking lot and has been allowing public parking in the lot since the gravel was placed, there is no agreement between the City and UPPR allowing the City's use to encroach onto the UPPR property. Recently, UPPR contacted City staff stating that for the City to continue to allow parking on its property, the City must enter a lease agreement with UPPR for $5,000 annually, with a three percent annual increase. The parking area extends 30 feet into UPPR's property. As currently laid out, a total of 22 parking stalls encroach into the UPPR property. Given the value of downtown parking, staff recommends City Council authorize the City Manager to enter into the lease agreement. RECOMMENDATION 1. Approve a lease agreement with Union Pacific Railroad for use of the parcel for the St Mary Street parking lot. 2. Authorize the City Manager to execute the agreement. FINANCIAL STATEMENT There is an annual financial impact of $5,000, plus a three percent annual increase, for the proposed lease agreement with UPPR for use of its property. Additionally, the lease agreement allows UPRR to redetermine the fixed rent once every three years. Upon approval, the annual lease payments will begin FY 2022/23. Payment for the first year would be made from the General Fund and will require a budget allocation. Subsequent years will be budgeted through the biennial budget process.