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City leases downtown garage floors to hotel operator for reserved stalls; $25 monthly per space
Summary
The commission authorized a 5½‑year lease with HCW (Hilton operator) for 250 reserved stalls (expandable to 300) in the downtown parking garage, establishing a $25/month per reserved stall rent, annual revenue share and private enforcement for leased spaces.
The Manhattan City Commission authorized city administration to finalize and execute a lease giving HCW (the operator for the Hilton conference center) exclusive control of 250 reserved parking stalls in the downtown parking garage, with an option to increase to 300 stalls. The commission approved the lease authorization by a 5‑0 vote.
City staff described the lease terms as a 5½‑year agreement that assigns the Second and Third floors primarily to HCW as reserved stalls; the agreement allows HCW to expand to 300 reserved stalls at the same monthly rate. The monthly rent is $25 per reserved space; at 250 stalls that produces roughly $6,000 per month or $75,000 annually, revenue that will be deposited in the city’s parking fund for garage upkeep and capital investment.
The lease contains a revenue‑share clause that will begin once HCW has been operating for a full calendar year. Under the formula discussed at the meeting the city would receive 25% of HCW’s annual net parking revenue after subtracting a 15% fee (to reflect parking‑management fees) and a $150,000 deduction (which includes the $75,000 annual rent the city receives plus allowable expenses). City staff said the first revenue‑share payment would be calculated after calendar‑year 2026, with the first payment possible in 2027.
HCW is responsible for signage and basic upkeep of the leased floors; staff clarified that the city must approve signage design and placement. The lease also allows for negotiated shared use during large community events; staff said those arrangements would be made case‑by‑case and could include temporarily turning off pay stations or applying mutual waivers. Enforcement inside leased floors was described as HCW’s responsibility in the manner of a private parking lot; staff said HCW would need to arrange private towing and enforcement for vehicles that are not authorized to use reserved stalls.
Jared (city staff) explained that earlier ParkMobile promo‑code problems delayed full implementation of previously approved fee changes; the new lease aims to provide predictable reserved parking for the conference center while preserving city stalls on the ground floor for general public use. The city will retain ground‑floor stalls and curb access for hourly ParkMobile customers, permits and public ADA stalls.
Public comment was minimal on the item. One resident suggested the city should seek a wholesale price rather than the proposed market arrangements; staff replied that the agreement and the $25 monthly rent reflect local market conditions and the city’s need to recover operating and capital costs.
The commission directed city administration to finalize the lease consistent with the terms discussed and to have the mayor and city clerk execute the agreement once finalized. Chelsea (city clerk) called the roll at the vote: the motion carried 5‑0.
