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July 3, 2007

Facilities

UTA eventually to own parking garage

The university will inherit the land and property when the lease expires in 2016.

Story by: Dennis Mitchell

Contributor to The Shorthorn

Students seldom use the Maverick Parking Garage tucked between Hammond and Pickard halls. Some don’t even know it’s there.

Located in the heart of the campus, the $2 million facility opened on Sept. 2, 1986. It was built on the site of a pay parking lot by Dallas-based Ridgemont Contracting Co.

The university entered into a 30-year ground lease agreement with the Ames-Teague joint venture, which owns Ridgemont Contracting. Ames-Teague is a partnership that comprises two alumni who work in north Texas. The garage was built at no expense to the university, which will retain the garage when the lease expires.

“An advantage of a ground-lease approach is the owner doesn’t have to provide capital on the outlay,” said John Hall, vice president for administration and campus operations. “The company finances the construction of the garage and also the operating cost, so UTA did not have any out-of-pocket expenditures. The lessee provides financing and operational costs.”

At the end of the lease, both the land and any physical improvements to the property, like the parking garage, reverts back to the university.

Other ground leases at the university are Centennial Court apartments and the UTA Bookstore, Hall said.

According to Article 3 of the parking garage ground lease, Ames-Teague agreed to pay rent and percentage rent on the property. Rent paid to the university is $100 per year for each year of the lease, and percentage rent is paid for each fiscal year during the term if entire gross revenue of the project exceeds $750,000.

In that case, between 1 and 7.5 percent of the gross rent could be paid to the university, depending on a specific year’s revenue.

According to both Hall and Dave Teague, a general partner in the joint venture that leased the property, no revenue sharing has occurred since the inception of the lease in 1986, meaning the university has taken in about $2,000 in rent from Ames-Teague over 20 years.

Hall said there have been no attempts to renegotiate the contract. There have been some preliminary discussions about extending the contract and/or adding a second garage on campus. Those discussions are still in the early stages, and no final decisions have been made.

“It’s been 18 or 20 years, and it’s been a mutually satisfactory relationship so far,” Teague said. “It’s up to UTA if the contract is renewed.”

He said that these days the university is satisfied with the contract, though the amount of money his partnership has made from the ground lease agreement is not a “fantastic amount.”

“We went into that with some data that was not the best in the world, and we suffered for about 10 or 12 years,” Teague said. “We’re just now getting to where we are making money.”

Ground leases are typically 20 to 30 years because the lessee needs sufficient time to recover its initial investment, Hall said.

Teague said the surveys taken to determine how many people would park in the garage turned out to be inaccurate.

“We built several of these, and what happened is universities, when they start allocating money, parking is at the bottom,” he said. “When we came along, it sounded good for us to put in parking, but it probably worked out better for UTA than for us because you got the parking and we haven’t made a huge amount off of it.”

Parking garage usage stayed consistent over the years.

“It’s pretty much a deficit,” Teague said. “With weekends and Thanksgiving and Christmas and spring break, it’s not a retirement plan.”

The garage can hold 368 vehicles, and semester passes cost $135 in fall 1987, according to The Shorthorn archives. A semester pass for fall 2006 cost $380. A ticket is $2.20 for the first hour and $1.65 for each additional hour not to exceed $7.15 per ticket.

“It’s probably more than most college students want to pay,” Teague said. “But it satisfies some segment of the market. It takes some pressure off the streets.”

According to Article 14, Section 14.16 of the lease, the owner, the university president, its administration and invitees are entitled to use the garage for parking at any time without charge for 5,000 hours of parking per year.

“It’s provided to various schools and colleges for visitors to conferences and things of that nature,” Hall said. “Many officials visit campus and park there.”

The 5,000 hours is calculated by multiplying the total number of cars parked without charge in the garage by the total number of hours each car is parked in the garage.

Hall said that while it was advantageous at the time to use a private developer, the university will probably finance and operate any future facilities.

The lease term expires Feb. 19, 2016.