Posted on Wed, Sep. 08, 2010

The San Luis Obispo City Council has approved a 99-year lease agreement with the developer of Garden Street Terraces for the city parking lot at 736 Marsh St., located directly across from Big Sky Restaurant in downtown.

Garden Street Terraces, a 212,000-square-foot project, is to include a hotel, residential units, retail and commercial development along the stretch of Marsh Street from Broad to Garden streets.

Under the deal with WestPac Investments approved unanimously late Tuesday, the city will loan the developer up to $2.4 million from the city’s parking fund.

The developer is to pay base rent annually to the city for the site, which would be determined by appraisal once the project design is complete.

The developer is also to pay a percentage rent of 1.5 percent of gross individual hotel room revenues that exceed $71,500 per room per year, starting in year 15 of the lease.

In addition, the developer is required to make a one-time payment of $1.86 million for the loss of public parking spaces.

In June, the City Council certified an environmental report, use permits and a tract map for the project to move forward.

WestPac must return to the council at a future date for approval of the project design before proceeding with development.

The deal with the city also requires that WestPac pay for all design and construction improvements to Garden Street.

Those plans would be reviewed at the same time as the project design of Garden Street Terraces.