HomeMy WebLinkAbout01/22/2002, B-5 - PARKING IN-LIEU FEES council move'anuary 22,2002
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C I T Y OF SAN LUIS OBISPO
FROM: Mike McCluskey, Director of Public Works'AN
Prepared By: Tim Bochum,Deputy Director of Public Works
Keith Opalewski, Parking Manager
SUBJECT: PARKING IN-LIEU FEES
CAO RECOMMENDATION
1) Adopt resolution:
a) Adopting a policy that the Parking In-Lieu Fee will collect a minimum of 40% of
the cost of providing a new structured space in the downtown area.
b) Modifying parking in-lieu fees for the Central Commercial Zone at $11,000 for
new construction and$2,750 for use changes to reflect that new policy.
c) Approving an annual CPI adjustment for both fees.
2) Direct staff to return to Council within the next 60 days with an amendment to Ordinance
1101 (1987 Series) that will delete the provisions for long term financing of in-lieu fee
payment.
REPORT-IN-BRIEF
On May 1, 2001, the City Council approved the first-tier recommendations for implementing the
draft Parking and Downtown Access Plan (PDAP). As part of consideration of that item, Council
directed staff to perform additional analysis for increasing parking in-lieu fees and to return with
recommendations by November 2001 for implementation. Staff has conducted additional
research on this item and has further investigated the history and existing policies regarding the
Parking In-Lieu fee.
Staff is recommending that Council establish revised Parking In-Lieu fees in the amount of
$11,000 per space for new construction and $2,750 per space for changes in use in the in-lieu fee
area. These revised fees are based upon two factors: 1) the actual cost of constructing a new
garage space and 2) the existing policy of in-lieu fees capturing at least 40% of the cost of that
price. As detailed later in this report, staff considered five alternative models for establishing a
revised in-lieu fee amount.
Finally, staff is recommending that Council approve the discontinuation of City financing of the
in-lieu fee for all future developers. Under the existing ordinance, new development projects may
finance (at City cost) the Parking In-Lieu fee for up to twenty years. While this financing system
allows new developers greater flexibility in arranging their project financing, it places the City in
the unnecessary role of being a conventional lender for an unsecured loan.
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Council Agenda Report—Parking In-lieu Fees
Page 2
DISCUSSION
A. Parking In-lieu Fee History
Standardized parking requirements for the downtown (Central-Commercial or C-C zone) were
established for downtown businesses in 1981. In order to promote compact urban form and
redevelopment and investment in the downtown, parking requirements were set at 50% of the
city-wide standard for restaurants and housing and 60% of the parking required for offices. These
ratios have allowed development within the CC zone to build more square footage with
substantially less parking space requirements compared to other areas of the city.
Similarly, for general retail uses, a 1:500 square foot requirement was established, which for
some cases (such as specialty shops) achieves as much as a 60% reduction in required parking
spaces when compared to other commercial areas of the city. These zoning regulations also
established an in-lieu fee program that would eventually (once a fee amount was determined)
allow developers an option of payment of a per space fee to the city instead of physically
providing the required parking spaces either on-site or on nearby properties. Many downtown
merchants agreed to participate in the in-lieu fee program pending the final determination of the
fee amount.
The matter of the fee was continued for a number of years without resolution. Then, in 1986, a
major parking study (IBI Group)was commissioned to determine potential future sites of parking
structures, the scope of which included funding sources for repayment of debt service for these
planned facilities. One major recommendation resulting from this study was that of establishing
the"parking in-lieu fee" at $4,000, which at the time represented 40% of the cost of developing a
structured parking space, excluding land costs. Ironically, this amount also reflected 40% of the
then-current cost of constructing a surface lot space in the downtown, including land acquisition
cost. Each of these costs was estimated at approximately $10,000 per space.
In essence, with the amount recommended, a policy was established that 60% of the cost for
providing the parking requirements for projects participating in the in-lieu fee program would be
discounted, in other words - paid by someone else (i.e. the shopper/user) and the developer
would pay 40%. To date, most of these monies have been paid for by the user side of the parking
fund equation—i.e. parkers, fines and forfeitures.
Additionally, the actual benefit for projects that participate in the downtown in-lieu program,
range from 80% - 84% of 1986 costs of providing a public parking space in the downtown area.
For example, a new retailer would first be required to provide 40% of the number of parking
spaces needed and then be required to pay 40% of the amount of cost of construction. Thus the
developer would be responsible for 16% (40% x 40%) of normal parking needs and would
receive the 84%benefit mentioned. The fee paid is based upon 1986 costs.,
There were good reasons then — and there remain good reasons now — for discounting parking
requirements and costs in the Downtown, including;
1. Encouraging development and redevelopment in the Downtown;
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Council Agenda Report—Parking In-lieu Fees
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2. Encouraging compact urban form (including consolidating surface parking lots into
parking structures);
3. Recognizing that a public space — perhaps some distance from a contributing
business—is less useable to the business owner than a private space;
4. Recognizing that there may be a large time lag between payment of the fee and the
actual development of new parking.
On the other hand, the fee allows Downtown property owners to use more of their property for
building area, which has obvious economic advantages. So, the issue when the fee was being
considered was one of striking the right balance (as it remains today).
In any case, Council adopted Ordinance 1101 in 1987, which established parking in-lieu fees,
and by Resolution 6332 set the fee at the recommended $4,000 for new development and $1,000
for use changes for,uses in the Central-Commercial Zone. This ordinance also maintained the
reduced parking ratio requirements for the downtown uses. At the time the ordinance was
adopted, approximately 40 merchants signed acknowledgements to formally participate in the
parking in-lieu fee program by the fall of 1989.
Finally, in September 1990, as a result of a $400,000 operating deficiency in the Parking Fund,
staff made recommendation to Council that modifications to the revenue stream of the Parking
Fund be implemented. One recommendation was that the in-lieu fee amount be increased from
$4,000 to $6,000. After substantial debate, the Council enacted other revenue enhancing
measures mostly raising the user side revenues such as rates and fines, but thein-lieu fee amount
stayed at the$4,000 per space amount.
B. 2001 -A"Parking" Space Odyssey
2001 was a milestone year for the Parking Fund. The Marsh Street Garage expansion project was
finally able to go to construction and the Parking and Downtown Access Plan (PDAP) was
considered by Council. The PDAP, which was to be used as the guiding document in place of the
existing Parking Management Plan, has been controversial to many of the stakeholders who have
interests in downtown parking issues. However, by creating a tiered system of the plan's
recommendations, many of the "low hanging fruit"recommendations were able to be adopted by
Council. Most of these again included increases to the user side of the Parking Fund revenue
stream. As part of this partial PDAP approval, Council directed staff to return at a later date with
recommendations for increasing the parking in-lieu fee to more accurately reflect the current
costs of constructing public parking spaces in the downtown.
As discussed earlier, establishing the amount of the panting in-lieu fee has never been a purely
quantitative exercise for the City of San Luis Obispo. Recognizing. that various community,
economic and land-use policies and opinions will affect the final modified fee, staff, as part of
review of this issue, attempted to develop a number of different "models" that could be used to
normalize the in-lieu fee process. The five models developed were:
1) Comparable Fees In Other Cities
2) Comparison To Recent City Parking Project Actual Costs
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Council Agenda Report—Parking In-lieu Fees
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3) Inflation Analysis
4) Parking Supply Versus Revenue- Gap Analysis
5) Comparison To Private Development Costs .
These models and their commensurate parking in-lieu rates are detailed below.
1. Comparison to Other Cities
Since the adopted fee is based on 1986 dollars and has not been increased for over 15 years (14
years since adoption) staff, as a starting point for comparison purposes; conducted a survey of
other similar California cities that use parking in-lieu fee programs. The initial survey was
conducted in April of 2001, with a follow-up survey in August of 2001. The supplemental
survey consisted of verifying three issues:
1) Does the current fee represent full recovery cost for space development?
2) If not,what percentage of the fee is subsidized (financed by the agency)?
3) Does the fee include the cost of land?
As shown on Attachment 2, San Luis Obispo is the lowest fee of the 16 cities surveyed that have
a fee program. The City's fee is 71% below the average fee of $14,960 and 56% below the
median fee of $9,125. Most cities have increased their fees in recent years and several have.
doubled their fee in the last 5 years. In and of itself, this information demonstrates that other
cities have already needed to review their fee structures as we are attempting to do now.
The survey yielded other information as well. In terms of a cost discount:
1. 60% of the cities discount the cost in some form—40% require full cost recovery
2. 50% of those who recover full cost, include land cost
3. 20% have discount policies similar to San Luis Obispo (60% revenue from
somewhere else)ranging from 25%to 87%.
Utilizing this model and establishing a policy that fees for San Luis Obispo should be moderate
would suggest the fee be somewhere between the median and mean, or $9,125 to $14,960 per
space.
2. Actual Recent SLO Parking Space Development Costs
Staff calculated the per space cost of developing a parking space in downtown based upon the
actual costs of the three most recent parking space development projects. This information is
shown in Table 1.
The analysis shows that the actual cost of a moderate size parking structure in the Downtown
(including land) is $27,640 per parking space. The value of land in the downtown, as opposed to
other areas, can have a significant effect on the per space cost of providing parking. A good
example of this is shown in the development cost of the surface lot for the Nipomo/Palm site,
where land prices alone added over$13,000 per parking space cost of the project.
Council Agenda Report—Parking In-lieu Fees
Page 5
Table 1
Project Construction Factors Cost Per space
Marsh St. Garage Expansion Construction Only $18,497 @ 354 spaces
Design and Construction $24,552 @ 354 spaces
Land Included $27,640 @ 354 spaces
Lot 14 Palm-Ni omo Construction Only $3,971 @ 35 spaces
Land Included $17,228 @ 35 spaces
Railroad Transfer Center Construction Only $11,194 @ 134 spaces
Land Included $16,417 @ 134 spaces
A significant conclusion can be drawn from this information. The 1986 IBI recommendation to
use the equitable cost of building a surface lot space as the basis for determining the fee is a
flawed one.
Comparing the difference between a structured space and a surface lot space ($27,640 vs.
$17,228) and the difference between a surface space with land and without land ($17;228 vs.
$3,971) demonstrates a potential flaw in the previous recommendations that in-lieu fees be based
partially upon construction costs of surface lots.
By using the cost of providing a surface space in the downtown as a variable in calculating the
in-lieu fee amount we paint ourselves into a corner of constantly under-funding the Parking
Fund. In essence, if we view the costs of providing public parking in the downtown on a purelX
objective fiscal basis, we would have to conclude that developing surface parking lots are the
preferred methodology for satisfying downtown parking supply. Quite simply, they are cheaper
to build than structured parking. While this method would result in a potential savings of$7,000
to $11,000 (assuming land costs are either in or out of the calculation) this policy would not
satisfy the goals and objective of the City's General Plan or The Conceptual Physical Plan for
the City's Center, which plan for compact urban form and the ultimate conversion of surface
parking in the downtown area.
Therefore, we conclude that any in-lieu fee calculation should be based upon the true costs of
providing structured parking spaces in the downtown. However, the parking fee should not be
placed at the actual cost ($27,640) because it would discourage redevelopment of property in the
downtown. Thus, the question boils down to: "What percentage of the true cost is the City
willing to require of new development?"
As stated previously, the current fee structure is based upon a policy to capture 40% of that cost.
40% of$27,640 would suggest.a fee of$11,056.
Council Agenda Report—Parking In-lieu Fees
Page 6
3. CPI Adjustment and Inflation Analysis
Using the January 1986 publication date of the IBI Study as the base point, the U.S. Consumer
Price Index for all Urban Consumers (CPI-U) has increased by 61.9% as of November 2001.
Applying this to the original fee would represent a $6,475 fee in today's dollars if annual CPI
increases had been incorporated into the original fee proposal. At a minimum, this amount
should be captured by the new parking in-lieu fee rate.
4. Parking Supply vs. Revenue Gap Analysis
Staff endeavored to duplicate the model developed for the 1986 effort by IBI Group to do a long-
term forecast of costs and revenues to provide the necessary spaces needed to meet future
demand as identified in the draft PDAP. As mentioned above, the analysis used as a basis a total
cost of$27,000 per space for a structured space and also the necessary bond indebtedness needed
to construct future projects including the Copeland garage structure. The revenue projections
included existing known revenue changes such as meter fee adjustments, increases in both fees
and fines, and lost revenues resulting from converting lots to structures such as the Court Street
proj ect.
While revenue and expense assumptions in this model made the outcome highly variable one
general conclusion could be drawn. In essence, even with full implementation of fee increases
proposed, there theoretically could be some future time when annual expenditures of the Parking
Fund exceed revenues. Although we would never actually let this occur, the prospect remains
that the debt financing of the North Area Regional Facility (NARF) project or the Palm/Nipomo
structure may surface this issue and require an in-depth analysis prior to proceeding. Thus, if we
truly wanted to keep pace with the actual parking demand created by new development we would
again, as-discussed above, require the fee to be $27,640. Again, this fee is unrealistic as it would
be a disincentive for redevelopment in the downtown.
S. Comparison with Private Development Costs
This model compared the cost to develop a surface lot space for private development projects
outside the downtown. This approach was difficult to model because each private project varies
considerably, thus no true "apples to apples" comparison was possible. The IBI Group Parking
Study estimated in 1986 that it cost $3,000 - $5,000 to build a parking space outside of the
downtown area. Staff solicited input from two local engineering fines to try and determine an
average cost per space that might be used for comparison on this issue: However, the information
varied widely depending on the actual size of development and the length of time that it took for
development, therefore a specific amount could not be obtained. In addition, it is not adequate to
simply calculate the "construction" costs of an 8'X 20' asphalt space somewhere in the outlying
areas. In order to be fair, the ancillary cost of improvements for new development outside of the
Downtown, such as utility extensions, street and infrastructure improvements should somehow
be factored into this equation to truly be a comparison to developmental costs in the Downtown
where much of the infrastructure is already in place.
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Council Agenda Report—Parking In-lieu Fees
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One firm estimated that the cost of developing a new non-Downtown space with land ranged
from $24,000 per space while another firm estimated the range from $8-10,000 per space that
did not include land. Since each private development is just that, private, staff is not in a position
to know actual land acquisition costs and private development agreements. The construction cost
to develop a parking space outside the downtown should be roughly proportional to cost in the
downtown, the difference being the underlying cost of land acquisition. However, with such a
wide range in costs it is difficult to say with certainty what that proportion might be.
In conclusion:
1. The City is long overdue in updating the parking in-lieu fee; the fees were
established in 1987 and are based upon 1986 construction figures.
2. The cost to develop a parking garage space should be based upon local, real, data
and should include all costs of developing that space: design, environmental, land
acquisition, and construction.
3. The actual average cost to develop a downtown parking space is approximately
$27,640.
4. A discount from the actual cost is appropriate in order to achieve other important
goals. However, the City should adopt a policy of establishing some actual
reasonable percentage of property owner responsibility for the costs of providing a
new structured parking space in the downtown area so as to bring clarity to this long
simmering debate.
5. The existing in-lieu fee was adopted based upon a recommendation that 60% of the
cost of construction of a downtown surface parking space for new development be
supported by other Parking Fund revenues. Using that policy again would result in a
new in-lieu fee of$11,000.
6. The remaining $16,640 needed per space would need to be generated via parking
garage fees, parking meter fees, or parking fines and is further discussed in Fiscal
Impacts.
In the final analysis, developing a parking garage space in downtown San Luis Obispo carries a
cost that is unique to the downtown. Available space is limited, and multiple properties must be
acquired and consolidated. Prime development locations are currently utilized as surface parking
lots, both publicly and privately and if the City is to keep making progress in supplying public
structured spaces and redevelopment of the downtown, better uses must be found for these
surface parking lots.
C. Change of Use_-Parking In-lieu Fee
A change of use occurs when a new business occupies an existing space but the type_ of use
requires a greater number of parking spaces than did the previous occupant/use. When this
occurs, existing regulations require that the new use pay an in-lieu fee for the difference between
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Council Agenda Report—Parking In-lieu Fees
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the current parking requirement and the previous requirement. The initial fee (1987) was 25% of
the new development fee,thus the same approach is being used for the new change in use fee.
As detailed in the discussions above regarding the various models investigated, the new
development fee is based on the cost of building a structured space as opposed to a surface lot.
This recommendation is based on the fact that future parking space development will take place
through the construction of multi-level parking structures and not in surface parking lots. The
40% figure is the same as was used to establish the original fee and is retained. Thus, 25% of
$11,000 is $2,750.
D. Annual CPI Adjustment
Staff is recommending that an annual CPI adjustment be built into the fee. This moderate
increase applied on a yearly basis would reduce the need for making large incremental increases
sometime in the future. However, this does not mean that the issue of a future look at the in-lieu
fee will never take place. Construction costs could radically change in the future.
E. City-Provided-Financing of Parking In-lieu Fee
The current in-lieu fee ordinance allows a developer to finance payment of required spaces for a
period of up to 20 years. The amount due is amortized over 20 annual payments payable each
January 1 if the total amount is over $5,000. Fees under $5,000 can be financed for a 10-year
period with annual payments. The financing has been handled by the City, which includes
setting the interest rate and processing all invoices and payments. Although the current process
allows developers to fulfill their parking requirements, it places the City in the position of acting
as the lender of an unsecured loan over a long period of time.
Therefore, we are recommending that the City discontinue this practice. If a project wishes to
finance parking payments they still can do so, but through means other'than the City serving as
fiscal agent for this requirement. Because this component of the fee program is set by ordinance,
staff will need to return to Council at a later date with a revised ordinance to remove this
component of the program.
This change will not affect all previously built and previously approved projects or memoranda
of agreement, and would only take effect upon adoption.
F. Recommendations
As explained in the following sections, staff is recommending that the following changes be
made to the Parking In-Lieu Fee:
1)Adopt a policy that the Parking In-Lieu Fee will collect a minimum of 40% of the cost of
. providing a new structured space in the downtown area.
2) Establish a revised fee at $11,000 per space for new development and$2,750 for change of
use based on 40%of developing a parking structure space including land.
3) Establish an annual CPI adjustment to be applied on January 1 of each year.
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Council Agenda Report—Parking In-lieu Fees
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4) Eliminate city-sponsored financing of all parking in-lieu fees.
CONCURRENCES
Discussions with the Downtown Association (DA) Parking Committee indicated they could
potentially support a parking in-lieu fee in the $6,000 range for new development. Fees above
this and including full cost recovery would not be supported by downtown businesses. Some
members thought there should be no fee at all and that the users should support the full costs of
implementation. However, neither the parking committee nor the DA Board of Directors
formally recommended a final fee amount.
The Chamber of Commerce echoed similar potential support for a moderate fee of$6,000. They
too would not support a fee that represented full recovery costs. As with the Downtown
Association the Chamber presented no final recommendation. Much discussion was centered on
the need for continuing with the in-lieu fee itself. A clarification paper (Attachment 3) for the
purpose and background on parking in-lieu fees clearly defines the "mission" and need for
additional fees, which have been a part of City-adopted policies for a long time. In short, there is
a strong need and justification to continue with the fees at an adjusted rate.
FISCAL IMPACT
As the need for more parking continues to increase, revenue adjustments must be made across
the board in order to fund future debt service for pending projects such as the Northern Area
Regional Facility (NARF) and the Court Street Copeland development project. Longer-term
projects such as the Pahn-Nipomo garage also need to be calculated into the equation so revenue
projections can be achieved within reasonable and periodic increases. The long duration (1987-
2001) for not increasing parking in-lieu fees necessitates that the fee adjustment make a
substantial catch-up, while at the same time maintaining some level of acceptance for future
growth in the downtown area.
Imposing the recommended in-lieu fee of$11,000 will result in revenues of$203,500 on a five-
year average. This is an increase over the current five-year average of$33,335. What revenue
can be generated from the recommended fee will depend on the level of development over the
coming years. Additionally, the size of the in-lieu fee area that would qualify for payment could
also change over time, thereby increasing the potential for additional in-lieu fees as well as the
demand for more parking spaces.
ALTERNATIVES
The staff recommendation reflects previous council policy (40% payment) based upon current
day real costs ($27,640). Staff believes that some amount of"fair share" of the costs should be
paid. Alternatives are a greater or lesser parking in-lieu fee than the staff recommendation if
Council desires to approve a different fee. Staff feels that the true cost of construction should be
the base decision and that all alternatives should be based upon a new council developer
contribution policy. The council could then choose a higher or lower percentage as.a new policy.
Some of the alternatives that Council may wish to consider:
Council Agenda Report—Parking In-lieu Fees
Page 10
Contribution Policy vs. Subsidy In-lieu Fee Table
Contribution Discount Fee
Policy
100% 0% $279640
75% 25% 209730
50% 50610 139820
40% 60% $11,000
recommended
35% 65% $9 450
30% 70% $89100
25% 753/o $69750
Staff does not recommend going below the 25% percentage due to the fact that this amount is
slightly above the CPI adjusted model of the current fee, which is the minimum adjustment that
we should make to the fee at this time.
ATTACHMENTS 1. Resolution Establishing New Parking In-lieu Fees
2. Parking In-Lieu Fee City Survey
3. Paper on Purpose and Background of Parking In-lieu Fees
4. Minutes,December 2001 DA Parking Committee Meeting
I: Council Agenda reports/Parldng Issues/CARParkingIn-LieuFee 0
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Attachment I
RESOLUTION NO. (2002 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
SETTING A FEE IN-LIEU OF PROVIDING PARKING FOR THE C-C ZONE;
AND RESCINDING RESOLUTION NO. 6332 (1987 SERIES)
WHEREAS, Section 17.42.020 of the San Luis Obispo Municipal Code provided for the
option of paying a fee to the City in-lieu of providing parking in the CC zone; and
WHEREAS, Section 4.30.020 provides for the City Council to establish by resolution the
amount of the parking in-lieu fee for construction, additions and changes of occupancy in the CC
zone; and
WHEREAS, the City Council has considered the staff analysis regarding an increase of this
fee and the recommendations of the Downtown Association; and
NOW THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as
follows:
SECTION 1. The parking in-lieu fees for the CC zone shall be as follows:
A. New Construction. The parking in-lieu fee shall be $11,000 per vehicle space
required by the zoning regulations for the addition and not otherwise provided.
B. Additions to existing buildings. The in-lieu fee shall be $11,000 per vehicle space
required by the zoning regulations for the addition and not otherwise provided.
C. Change in occupancy requiring additional parking spaces. The in-lieu fee shall be
$2,750 per vehicle space required by the zoning regulations and not otherwise
provided. The number of spaces required by the change in occupancy shall be the
difference between the number required by the new use and the number required by
the previous occupancy.
D. This fee will adjust annually, effective January 151 of each year, per the Consumer
Price Indexes (Los Angeles-Riverside-Orange County).
Upon motion of and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was passed and adopted this day of 2002.
�I
Resolution No. (2002) _ - Attachment I
Parking In-Lieu Fees
Mayor Allen Settle
ATTEST
City Clerk
APPROVED AS TO FORM:
J fr . Jo ge n, (0ty Attorney
I:Council Agenda Reports/Parking Issues/Resolution—Parking In-Lieu
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_ Attachment .3
PURPOSE AND BACKROUND ON PARKING IN-LIEU FEES
December 21, 2001
The Broader Issue First: The In-Lieu Fee"Mission." The Parking Fund only has a handful of
revenue sources, the most important of which are meters, fines and structure fees. These three
revenues account for 85% of total parking revenues—and they all come from"the parkers."
In the past, we have discussed the need to broaden this revenue base(the "three-legged" stool
concept) to include property and business owners as well. The only progress we made along this
"diversification road" is the parking in-lieu fee.
The basis for the parking in-lieu fee comes directly from our General Plan:
"LU 1.14: Costs of Growth. The costs of public facilities and services needed for new
development shall be bome by the new development, unless the community chooses to
help pay the costs for a certain development to obtain community-wide benefits. The
City will adopt a development fee program and other appropriate financing measures, so
that new development pays its share of the costs of new services and facilities needed to
serve it."
And our adopted Fiscal and Budget Policies say the much the same thing:
" . . . development impact fees should be created and implemented at levels sufficient to
ensure that new development pays its fair share of the cost of constructing necessary
community facilities."
Our adopted Fiscal and Budget Policies also say that fee adjustments should be ongoing:
"Fees will be reviewed and updated on an ongoing basis to ensure that they keep pace
with changes in the cost-of-living as well as changes in methods or levels of service
delivery."
As discussed below,parking in-lieu fees have never been adjusted since they were adopted in
1987, over 14 years ago. And on this note, the Draft Parking and Downtown Access Plan
(PDAP) calls for increasing the fee by at least changes in the consumer price index since then.
Parking Policy. The underlying requirement for parking in-lieu fees comes directly from our
zoning ordinance, which requires new development anywhere in the City to meet its parking
demand on-site. However, in the Downtown only, new development is allowed the option of
meeting this requirement by paying an in-lieu fee instead.
In 1987, this was set at 40% of what a parking space was estimated to cost at that time($10,000),
for a fee of$4,000 per space. This substantial 60% subsidy(now closer to 85%) was in
recognition that—as noted in our General Plan policy—there are "community-wide"benefits to
providing public parking in the downtown.
In summary, in directly answering your question: we have very clearly articulated goals and
"mission" for parking in-lieu fees—and we have for a very long time.
J '�7'
Attachment 4
SLO Downtown Association
Parking and Access Committee
14 December 2001
Parking Conference Room
Minutes
Present
Tom Swem
Dave Romero
Doug Shaw
John Donovan
Cindy Ashley
Maureen Forsberg
-Deborah Holley, staff
Keith Opalewski
Austin O'Dell
Call to order 8:07 AM by Swem.
Approval of minutes; motion by Shaw, 2"d by O'Dell, PAIR
Marsh Garage Expansion Update
Opalewski said City Finance Manager Bill Statler secured a lower interest loan, saving
money on the project; regarding the project itself, a few rain days but slated to start
drilling next week then pour slab; after first of year,walls and decks, may have to close
Pacific during some of that time, garage access won't be impaired; completion date
projected late August, delays may be able to be made up. Swem thanked Opalewski and
Statler for their efforts to save money.
Copeland's Project Update
Swem said Copeland's have received an MOU to move forward, now has to start the
process; Opalewski said it's an ambitious schedule, Copeland wants permits by Sept. of
next year.
In lieu fee increase
Opalewski said item is on Jan 22 Council.meeting; Swem said went to Property Owners
Association meeting and the item was discussed there, most organizations have reviewed
and asked why should be more than 15% if can get financing; Romero reviewed history,
passed out handout, Swem said if cities are intending to encourage high intensity, why
Attachment 4
would they try to discourage this with high fees, city should want to put money from
general fund to finance entire core to encourage the highest density.
Romero said initially started to achieve compact form, have parking available for
everyone, didn't want businesses to move to outlying areas; City uses money for a long
time before it builds parking with in-lieu fees, also parking is not always built near the
person who contributed; some businesses with private parking have to hire a guard.
Regarding"subsidy," Romero asked subsidy for whom, the parker pays for the space,
cost should be based on parking structure space cost, not.surface lot cost; ultimately, what
is the purpose of having the parking fee. Romero said the Chamber Parking committee
wants to meet with other groups and City staff and formulate a fair fee, not just go with
current recommendation.
Swem said if bond funding is available for a garage, whatever that covers, the difference
is what is needed (financing less price); Romero said it could be 100% financed; the
spaces are paid for by parkers. Swem said there is no reason for in-lieu fees; Romero
said rates pay fees. Swem said why are doing this? To dissuade people from building.
Opalewski said the term "subsidy" is a sticking point; since the developer is only paying
a portion of cost, it's considered a subsidy. Swem said parking is built for customers to
use; the in-lieu fee doesn't do much of anything.
Swem said need to come up with basic philosophy, what is the purpose, what do we want
to accomplish, like writing a business plan; then how do we get there, what are
impediments, define what monies are used for,if not for down payments of structure, are
they necessary or what is fair, if for betterment of community,then they should pay for it,
if they pay 100% why should be any fee? This is the bigger issue than just determining a
fee.
Swem said reduce to philosophical issue before arguing dollars; do with other groups.
Holley will contact Wilmore; Spangler, Bochum and City Council member(as an
observer) to meet with their groups' representatives prior to Council meeting. Romero
said only two members can attend meeting. Position at this point.is to think through
philosophy, meet with other groups and take a united front to Council, committee agreed.
Gold Pass Program
Forsberg said 11 passes have been sold since July, three are returns, eight have tried and
have not reinvested; is meeting with retail representatives, showing power point
5--��
K .TING AGENDA
DAt 1-22-PaL ITEM#
San Luis Obispo Chamber of Commerce
January 16, 2002 1039 Chorro Street • San Luis Obispo, California 93401-3278
(805) 781-2777 • FAX (805) 543-1255 9 TDD (805) 541-8416
David E. Garth, President/CEO
Mayor Allen Settle
Members of the City Council NCIL ❑ CDD DIR
City of San Luis Obispo ❑ FIN DIR
❑ FI CHIEF
990 Palm Street W(COANEY W DIR
San Luis Obispo, CA 93401 CLERK/ORIG ❑ POLICE CHF
❑ D HEADS ❑ AEC DIR
Re: In-Lieu Parking Fees ❑ RID RIR
IR
Dear Mayor Settle and Council Members,
The Chamber's Parking/Access Task Force has made a careful study of the proposed increase for
in-lieu parking fees which you will consider at the Council meeting of January 22. After much
discussion surrounding the purpose and background of these fees, the task force unanimously
forwarded the following motion which was subsequently approved by our Board of Directors:
The San Luis Obispo Chamber of Commerce requests that prior to adopting any
change in downtown parking in-lieu fees, the City allow a period of three months for the
Chamber's Parking/Access Task Force and other stakeholders to work with City staff in
creating a model for such fees that is consistent with the goals of maintaining and improving
a vibrant, mixed use downtown. We feel that this is an opportune time to thoroughly review
the current in-lieu system, its relevance, and other possible alternatives in a joint effort
toward reaching the City's and the community's goals related to our central core.
We ask that you would give careful consideration to this request and agree to allow some time to
consider what action will best achieve.the goal of a strong downtown core. We hope you will
concur that it would be inopportune to take actions now that may discourage future
development, renovation and expansion of both commercial and non-profit entities in the
downtown. There are other alternatives, for example creating an assessment district, that may
more equitably and successfully ensure revenues for the City's parking financing strategy.
Thank you for considering our position.
Sincerely,
RECEIVED
!AN 6 20112
L/Jeanne Potter
Chairperson of the Board SIA CITY COUNCIL
cc: Mike McCluskey, Public Works Director
e-mail: slochamber@slochamber.org • websites: www.slochamber.org www.visitslo.com
r ,-
ML_,ING AGENDA
DATE -Z�ITEM #
From: <berkley751 @dellepro.com>
To: <sstendahl@ci.san-luis-obispo.ca.us>
Date: 1/21/02 11:39AM
Subject: In-Liue Fee Increase
Dear Council Members,
In regards to item 5 on the Jan 22, agenda. In-Lieu Fee Increase.
In keeping with the city's desire to increase housing in the central commercial zone, I would like to
recommend you consider leaving the$4000 per space in-lieu fee the same on the "residential portion"of
those mixed use development projects that incorporate housing. This would serve as a great incentive to
include housing into future projects downtown.
Sincerely,
CS3FJNCIL ❑ CDD DIR
Stan Carpenter 0 ❑ FIN DIR
751 Buchon St. 2 QED RHIEF
e
ORNEY Ci7'PSan Luis Obispo, CA 93401 RK/ORIG d POLICE CHF
❑ g PT EADS REC DIR
(®� UTIL DIR
❑ HR DIR
RECEIVED
20[0
SLO CITY COUNCIL