The San Diego City Council on Monday voted to extend the San Diego Zoo's lease in Balboa Park in exchange for an agreement to share revenue from new parking fees.
The city began negotiations with the zoo last summer in search of new revenue sources to help balance its budget. In exchange for an additional 44 years on its lease, the zoo agreed to give the city a minimum $3 million annual payment. That amount is set to increase by 3% each year beginning in 2030.
In addition, the zoo agreed to a 50/50 split of gross parking revenues if that amount ever exceeds the $3 million minimum payment. The zoo also committed to providing $250,000 worth of free admissions to nonprofit organizations, schools and children each year, and it agreed to follow certain labor and environmental standards that apply to city infrastructure.
Adam Day, treasurer for the zoo's board of trustees, told the council the lease extension gives the zoo the certainty it needs to invest more in the property.
"We plan in terms of decades, not years," Day said. "This extension gives us the ability to work with our financial institutions to further invest in deferred maintenance and new capital projects."
The lease, now set to expire in 2078, was approved by the council 8-0, with Councilmember Kent Lee absent. The original lease was signed in 1979. California law limits leases to a maximum of 99 years.
San Diego's Office of the Independent Budget Analyst estimated the entire lease extension could net the city about $98.5 million.
"This amendment strengthens the city's longstanding partnership with the San Diego Zoo, providing stability for continued investment in the property, and creates meaningful revenue for the city," said Councilmember Jen Campbell.
The zoo's minimum payment to the city would disappear if the city were to eliminate parking fees in Balboa Park. The payment would also be prorated if the city decides to eliminate the parking fees on certain days of the week.
