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Commission approves amended MOU, 100‑year lease and tax exemption approach for downtown parking garage
Summary
The commission approved an amended memorandum of understanding and lease with West Augustine Gateway LLC to build a downtown parking garage. The amendment moves to a 100‑year lease to secure property‑tax exemption, sets a minimum 650 public spaces (design at 707), and provides options for purchase and funding timing.
The Saint Augustine City Commission on Jan. 12 approved an amended memorandum of understanding and lease agreement with West Augustine Gateway LLC (the “Bridal” project) to construct a public parking garage at West King Street.
Assistant City Manager Reuben Franklin told the commission the amendment was restructured after discussions with the property appraiser to allow the city and developer to qualify the site for property‑tax exemption. The change lengthens the lease term to 100 years, includes a lease schedule with a 30‑year principal and interest payment scenario, and provides the city an option to buy the land at fair market value in year 30.
The current design includes 707 parking spaces; the amended MOU guarantees a minimum of 650 publicly available spaces. Franklin said the conceptual rent schedule was updated to reflect higher interest rates since the original MOU and that the developer will fund design and construction while the city will operate and maintain the garage after delivery.
Franklin explained staff’s approach to limit city fiscal exposure: the project will use lease financing and non‑ad valorem revenues to cover debt service, and staff will return to the commission if construction costs or financing terms exceed the conceptual schedule included in the MOU. He also confirmed the property-appraiser’s advice that the 100‑year lease will produce full property‑tax exemption for the garage (city, county and school‑district levies), while non‑ad valorem assessments such as fire assessments would still apply.
Commissioners discussed parking counts and design and asked staff to include tight milestone reporting as the project moves toward final construction documents. The commission approved the amended MOU and directed staff to proceed with lease execution and the next design milestones, provided construction costs and financing come in at or below the rent schedule included in the amendment.
Key points: the approved amendment (1) raises the guaranteed minimum public spaces to 650 (current design 707), (2) converts the lease structure to a 100‑year term to allow a tax‑exempt structure, and (3) allows the city to pay certain design costs to reduce the developer’s principal if desired. Staff expects to finalize construction documents by mid‑2026, start construction in September 2026 and open the garage in approximately September 2028, subject to permitting and financing.
