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Commission approves amended MOU and lease framework for West King Street parking garage; 100-year lease secures tax-exempt status
Summary
The commission approved an amended memorandum of understanding and lease framework with West Augustine Gateway LLC to build a municipal parking garage (design ~707 spaces; MOU requires minimum 650); the amendment restructures terms to qualify for property-tax exemption via a 100‑year lease and sets key financing milestones and a construction timeline.
The St. Augustine City Commission on Jan. 12 approved an amended memorandum of understanding (MOU) and lease framework with West Augustine Gateway LLC to deliver a municipal parking garage on the Bridal property at 198–212 West King Street.
Assistant City Manager Rudin Franklin summarized material changes: the amendment raises the MOU’s minimum public-parking requirement to 650 spaces (design is currently at about 707), restructures the lease to a 100‑year term to qualify for property-tax exemption, and allows the city to prepay certain design costs to reduce principal. The conceptual rent schedule was updated to reflect higher market interest rates since the original MOU.
Franklin said the amended schedule includes a 30‑year principal-and-interest repayment for construction cost and a ground-lease rent schedule starting at $275,000 escalating 2.5% annually over the 100‑year term; the city also has an option to purchase the land at fair market value in year 30. The developer will fund design, permitting and construction; the city will operate, maintain, repair and insure the garage once delivered.
The commission and developer discussed financing, public access and project timing. Staff said the design milestones are expected to be completed by July 2026, construction to begin in September 2026 and a garage opening around September 2028, subject to final permitting, interest-rate locks and confirmation that final costs fit the rent schedule.
Commissioners asked whether the tax exemption would include school-district and other taxing authorities; staff said the city received confirmation from the property appraiser that the structure would be tax-exempt across relevant taxing authorities, with only non‑ad valorem assessments (for example, a fire assessment) applicable.
The commission approved the amended MOU and directed staff to enter the lease at the appropriate milestone if final construction costs and financing conform to the rent schedule; if costs exceed projections, staff will return to the commission with options.
Several commissioners asked staff to prepare a resolution or budget schedule clarifying the dedicated revenue sources (non‑ad valorem and garage revenues) that would service the lease and to provide a tighter public-facing milestone schedule before construction.
