HomeMy WebLinkAbout03/19/2002, PH6 - PARKING IN-LIEU FEE ORDINANCE CHANGE conn c k M.6,"w March 19,2002
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CITY OF SAN LUIS OBI SPO
FROM: Mike McCluskey, Director of Public Works
Prepared By: Keith Opalewski, Parking Manager
SUBJECT: PARKING IN-LIEU FEE ORDINANCE CHANGE
CAO RECOMMENDATION
Introduce an ordinance to print amending section 4.30.020 (Parking In-lieu Fees for the Central
Commercial Zone-Calculating Fees) of the San Luis Obispo Municipal Code eliminating City
provided financing of Parking In-lieu fees.
DISCUSSION
On January 22, 2002, the City Council approved increases for parking in-lieu fees for new
construction ($11,000) and use changes ($2,750) and implemented an annual CPI adjustment for
both fees. As part of the approved CAO recommendation, Council also directed staff to return
within 60 days with an amendment to the parking in-lieu fee ordinance that would delete the
provisions for City-provided long-term financing of parking in-lieu fee payments.
Current Ordinance
Section 4.30.020 Paragraph D-2 of the current parking in-lieu fee ordinance allows a developer to
finance payment of required parking spaces for a period of up to 20 years. The amount due can
be amortized over 20 annual payments payable each January 1 if the total amount is over $5,000.
In-lieu fees under $5,000 can be financed for a 10-year period with annual payments. The City
provides the financing arrangements by setting the interest rate and invoicing the developer on an
annual basis. This process allows a developer to fulfill their parking requirement by signing an
agreement promising to pay for the spaces sometime in the future. Although this practice
technically fulfills a developer's parking space requirement, in essence it equates to the City
issuing an unsecured loan that can run in the hundreds of thousands of dollars with no guarantee
of receiving full payment over the life of the loan. The current practice places the City in the
position of acting as the lender of an unsecured loan over a long period of time before the entire.
financial obligation is paid in full. As a result, staff recommended, and the Council concurred on
January 22"d, that a change to the ordinance eliminating this practice was warranted.
Proposed Change
In accordance with previous Council direction, the proposed change to the ordinance is simple:
eliminate city-provided financing. Discontinuing the City-provided financing for in-lieu fees
offers several advantages:
1) The "full" fee is paid at the start of a project as opposed to stretching out payments for 10
or 20 years,
P/
Council Agenda Report—Parking In-lieu Fee Ordinance
Page 2
2) It eliminates staff time for setting interest rates and processing new invoices and
payments each year, and
3) Provides cash infusion to the Parking Fund to potentially expedite funding for future
parking projects.
The parking in-lieu fee increases were approved to establish a more level playing field for the
business community to pay a cost-adjusted share of parking space development. The logical
progression is to assure these additional fees are realized at the time of new development or use
change as opposed to the current policy of receiving full payment at the end of a 20-year period.
Enacting this change would not curtail a developer from financing their parking requirements
through some type of payment plan,but through other means than the City serving as fiscal agent
for fulfilling this requirement. Furthermore, this change would only take effect upon final
adoption and not impact all previously built and approved projects or agreements. It also would
not affect all projects that currently have an approved payment plan with the City. Only new
projects submitted after the final adoption of the recommended change would be affected by the
revised ordinance.
CONCURRENCES
The proposed ordinance change to eliminate City-provided financing is supported by the
Community Development Department. Discussions with the Downtown Association (DA)
Parking Committee indicated they would be preparing a position paper regarding the recent fee
increases and the proposed ordinance. The Chamber of Commerce also indicated they do not
support the proposed ordinance change. To date, no formal response has been received from
either group.
FISCAL IMPACT
As mentioned above, eliminating the in-lieu city-provided financing can provide a cash infusion
to the Parking Fund. This is a significant point, especially when reviewing the history of parking
in-lieu fee payments under the current ordinance. Attachment 1 details all parking in-lieu fees
that have been committed to since the start of the program in 1989. The in-lieu fees fall into
three categories:
].Paid in cash at time due.
2.Financed fee and loan paid.
3.Financed fees and loan agreement still outstanding.
The total of all of the above fees is $884,000, with $149,000 paid in cash, $105,00 paid via City
financing, and an original fee amount of $630,000 is still being financed. All but one was
financed for 20 years, which means the remaining balance will not be paid in full for nearly
another 10 years. If the City had not provided long-term financing for the outstanding fees, the
full amount would have been available to help fund parking projects currently under construction
(Marsh Street Expansion), or in the process of acquisition (Copeland) or in future study mode
(NARF).
Council Agenda Report—Parking In-lieu Fee Ordinance
Page 3
Previous projections from the increased fees indicated revenues of slightly over $200,000 would
result on a five-year average. What revenue can be generated from the new fees will depend on
the level of development over coming years. However, the key issue is to acquire the full
amount of the fees at the outset of projects and not prolong the retrieval of funds over a long time
period. Moreover, the size of the area that would qualify for payment of in-lieu fees could also
change over time, thereby increasing the potential for additional cash payments to the Parking
Fund. In short, the recommended change will increase cash reserves and streamline the overall
process for satisfying parking in-lieu payments.
ALTERNATIVES
Council could consider other alternatives.
1. Maintain current policy but adjust the amounts that could be financed and for how long.
The current $5,000 amount could be increased to $22,000, $33,000, $44,000 or higher in order to
be eligible for financing. The time period could be shortened as well. This would still put the
City in the financing role as it would apply to all but the smallest projects. It is not
recommended as it still produces most of the negative results of the current program and does
little to help the Parking Fund.
2. Maintain current policy but adjust the number of spaces that are eligible for financing.
The number of spaces eligible for financing could be increased to a minimum of 5, 10, 15, or
more. Depending on the number set, this would still finance the larger projects. However, it is
these projects where the percentage cost of in-lieu fees to the total project cost is small and
private financing is available. This option keeps the biggest projects from contributing
immediately to the parking fund — thus depriving it of the largest cash flow and is not
recommended.
3. The time periods for financing could be adjusted.
The City could provide financing for periods shorter than the current 20 years. This would speed
up the recovery of lost cash flow but would still keep the City in the financing business.
Although the above alternatives are various scenarios for the amount and number of spaces that
could be considered for financing options, they still place the City in the role of fiscal agent that
allows payments to be deferred to some future date. Considering the reduced number(50% less)
of parking spaces required in the Central Commercial and the subsidy provided (40% of actual
development costs) through payment of in-lieu fees, staff recommends the City curtail acting as
fiscal agent for financing parking in-lieu fees in order to retrieve the monies early in the project
development process.
Council Agenda Report—Parking In-lieu Fee Ordinance
Page 4
ATTACHMENTS:
1. Parking In-lieu Fee Payment History
2. Legislative Draft Ordinance
3. Proposed Ordinance
4. Ordinance No. 1101
L\Council Agenda Reports\Parking Issues\ParkingIn-IicuFeeOrdinanceChange v2.
ATTACHMENT 1
city of san Luis oBispo
Parkin In-Lieu Fee Payment History
Agreement Agreement Original Fee
Name Site Address Term Date Amount
Financed Fees: Loan Agreement Still Outstanding 630,000
Milton Piuma 599 Higuera 20 years 7/25/89 28,000
Rossi King 1011-1025 Monterey 20 years 8/10/89 9,000
Timothy Yale(SLO Brew) 1119 Garden 20 years 9/1/89 5,000
Riley's (Now Copelands Sports) 837 Marsh 20 years 1/1/91 112,000
Ted Frankel 680 Higuera 20 years 10/15/91 68,000
Don McHaney 940 Chorro 10 years 9/2/94 1,000
Downtown Centre 800 Block: Higuera& Marsh 20 years 11/1/94 368,000
Tom McLaughlin 699 Higuera 10 years 10/3/97 3,000
Mary Mitchell-Leitcher 1015 Nipomo 20 years 7/28/00 24,000
Mary Mitchell-Leitcher 1015 Ni omo 20 years 4/23/01 12,000
Financed Fees: Loan Paid-Off 105,000
Stanford Clinton 1023 Chorro 7/27/89 4,000
Jerry Martin 1040& 1050 Broad 8/1/89 3,000
Rob Rossi 1000 Higuera 9/12/89 3,000
Alan McVay 994 Monterey 9/13/89 1,000
Alan McVay 998 Monterey 9/13/89 1,000
Rob Rossi 1017 Monterey 9/15/89 2,000
Rob Rossi 1009 Monterey 9/20/89 3,000
Rob Rossi 1023 Monterey 9/25/89 1,000
Stephen Harding 569 Higuera 9/26/89 8,000
Robert Takken 1027 Marsh 12/11/89 12,000
Rob Rossi 1088 Higuera 4/26/90 8,000
Robert Takken 668 Marsh 5/8/90 24,000
Lori Silvaggio 672 Higuera 5/18/90 30,000
James & Patricia Dee 817 Palm 7/31/90 4,000
James&Patricia Dee 817 Palm 3/24/94 1,000
Paid in Cash at Time Due 149,000
Helen Grau 1110 Garden 6/12/89 1,000
Stephen Wise 1121 Broad 7/17/89 22,000
Stanley Cole 1011 Higuera 7/17/89 3,000
Garry Holdgrafer 969 Monterey 8/2/89 1,000
Maino 1135 Chorro 8/14/89 1,000
Rob Rossi 1005 Monterey 9/20/89 2,000
Anselm Varni 1108 Broad 10/11/89 1,000
Dan Smith 1212 Garden 3/20/90 1,000
Doyle Manley 733&751 Marsh 7/31/90 48,000
The Creamery 570 Higuera 11/29/90 10,000
John Olsen 725 Higuera 7/15/94 5,000
David &Vicki Billingsley 1001 Higuera 12/19/94 8,000
Sargen Family 751 Marsh 1/11/95 3,000
Anthony Gomez 675 Higuera 1/10/96 4,000
Brubeck/Brad Schwan 726 Higuera 12/17/96 8,000
Thomas Smith 1065 Higuera 3/25/99 8,000
David Monteith 1050 Broad 7/21/99 1,000
Carl Karcher Enterprises 698 Higuera 1/5/00 2,000
Robert& Dora Carpenter 1128 Garden 5/10/01 12,000
Coast National Bank 553 Higuera 7/27/01 8,000 .
Total $ 884,000
6 -,s-
ATTA( 'ENT 2
LEGISLATIVE DRAFT
Chapter 4.30
PARKING IN-LIEU FEES FOR THE CENTRAL COMMERCIAL ZONE
Section:
4.30.020 Calculating fees.
D. The.per space fee for new construction, additions or changes in occupancy may
Must be paid in-eitkerby e-f-the following methods:
1. In a lump sum, prior to the issuance of construction permits for the structure or
occupancy for which the parking is required or prior to the issuance of a city business
license for the activity for which the parking is.required, if no construction permit is
required,. For- these ..1 _ ha,,,- signed . 1, g, ek ..Tea..., ents the 1. m pa
r.. ..V �. ..xxa vuyaia�
shall be paid ne later- than ninety (90) days after- the awar-d ef a ee it fef
b .
2 Tn ene t 11 t .idea in an .,«+,eAiv.,t a eked le established-by
the City Finanee Difeeter-. The tefm of said sehedule shall not exeeed VA,en�y years fe
fees $5,000 er- gFea4er-, fier- ten year-s.fer- fees less than $5,009. The inteoest rate shall be
deteffrAned by the Finanee Difeetef eaeh January for- that easuing yeaf, based en euffent
xfi)Eedt i eegheu4. the efAir-e=pa)Taef4 peried The „ ..,t instaHmefi4 .sha4l be due e
shall be as pr-evided faf pr-epet4y twies. Unpaid fees shall beeeme 4 lieff UpOR the
for-whieb the b
is r-equir-ed-.
Ifinstallment t: is eleetea the femaining ..l balanee .be :a
installment,in full at anytime A44. ' L 1.1
.
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-JTACHMENT 3
ORDINANCE NO: (2002 Series)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO AMENDING SECTION
4.30.020 OF MUNICIPAL CODE CHAPTER 4.30, PARKING IN-LIEU FEES FOR THE
CENTAL COMMERCIAL ZONE AS ADOPTED BY THE CITY OF SAN LUIS OBISPO
WHEREAS, the City Council conducted a public hearing on , 2002, and
has recommended approval of amendments to the Parking In-Lieu Fees For the Central
Commercial Zone; and
WHEREAS, the City Council has considered testimony of interested parties, and the
evaluation and recommendation of staff, and
WHEREAS, the City Council finds that the proposed amendment is consistent with the
City's goal for development of downtown parking.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo as follows:
SECTION, 1. Section 4.30.020 of Chapter 430 of the San Luis Obispo Municipal Code
is hereby amended to read as follows:
4.30.020 Calculating fees.
D. The per space fee for new construction, additions or changes in occupancy must
be paid by the following method:
In a lump sum, prior to the issuance .of construction permits for the structure or
occupancy for which the parking is required or prior to the issuance of a city business
license for the activity for which the parking is required, if no construction permit is
required.
SECTION 2. If any provision of this Ordinance is for any reason held to be invalid by a
court of competent jurisdiction, the City of San Luis Obispo hereby declares that it would have
passed each and every remaining provision irrespective of such holding in order to accomplish
the intent of this ordinance.
SECTION 3. A summary of this ordinance, together with the names of Council
members voting for and against, shall be published at least five (5) days prior to its final passage
in the Tribune, a newspaper published and circulated in this City. This Ordinance shall go into
effect at the expiration of thirty(30) days after its final passage.
INTRODUCED on the day of 2002, AND FINALLY ADOPTED by
the Council of the City of San Luis Obispo on the day of 2002, on
the following roll call vote:
AYES:
NOES:
ABSENT:
Mayor Allen Settle
ATTEST:
Lee Price, City Clerk
APPROVED AS TO FORM:
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IyAtornt,J frey . Jorgensen
IMEM 1T 4
ORDINANCE NO. 1101 (1987 Series)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO ADJUSTING
PARKING STANDARDS AND ESTABLISHING PARKING IN-LIEU
FEES FOR THE CENTRAL-COMMERCIAL ZONE
BE IT ORDAINED by the Council of the City of San Luis Obispo as follows:
SECTION 1 . Findings. The Council makes these findings:
1 . The Community Development Director has found that the proposed °revised
standards and in-lieu fee program will not result in a significant adverse
impact on the environment and has approved a negative declaration for same
in accordance with the California Environmental Quality Act.
2. Establishment of new standards and parking in-lieu fees is consistent with
the general plan and and Goals for Downtown, as explained in the staff
reports referenced hereby, and will promote the public health, safety, and
welfare.
3. Parking in-lieu fees are development fees, not a tax or special
assessment.
SECTION 2. Parking Standards. Section 17.42.020(E) of the Municipal Code
is amended to read as follows:
E. Other sections of this Title notwithstanding, the Parking Requirements in
the C-C zone shall be as follows:
ti 1 . Restaurants, sandwich shops, take-out food, bars, taverns, night
clubs, other food service, or entertainment establishments, theaters,
auditoriums, convention halls, and churches: one-half that required in Section
17.16.060 provided, however, that in no case the requirement shall exceed one
space per 350 square feet gross floor area.
2. Dwellings, motels, hotels and bed and breakfast inns: One-half that
required in Section 17.16.060.
3. All other uses: one space per 500 square feet gross floor area.
4. In determining the total number of required spaces, all fractions
shall be rounded to the nearest whole number. Fractions of .5 or greater shall
be rounded to 1 ; fractions less that .5 shall be rounded to 0.
5. For existing buildings. only the parking needed for additions thereto
or for changes in occupancy which increase parking requirement relative to
prior uses, shall be required.
6. The parking space requirement may be met by:
a. Providing the required spaces on the site occupied by the use;
b. Providing. the required spaces off-site, but within five hundred
feet of the proposed use, in a lot owned or leased by the. developer of the
proposed use; _
0 110'
Ordinance No. 1101 (1987 Series)
Page 2
C. Participating in a commonly held and maintained off-site parking
lot where other businesses maintain their required spaces;
d. Participating in .a parking district which provides parking
spaces through a fee or assessment program. (This subsection may be'satiefied
by participation of the underlying property in a parking district by ;
January 1 , 1988. If by that date the underlying property is not
participating in such a district, the parking .requirement shall be. otherwise
met);
e. Participating in an in-lieu fee program as may be established by
the City Council. Any parking agreement approved prior to adoption of the
parking standards contained in Sections E.1-3 above, .ma�y be adjusted to conform
with those standards, subject to approval by the Community Development Director
and City Attorney; or
f. Any combination of subsection E.4.a. through E.4.e of this
section.
The Community Development Department shall be notified of the
expiration or termination of any agreement securing required parking. The
department shall schedule a public hearing before the planning commission to
consider revocation of the use authorization where no alternative location for
required parking is provided (Ord. 1.050 1 (part). 1985: Ord. 1023 1 . 1984:
Ord. 1006 1 (part). 1984: Ord. 941 1 (part). 1982: prior code
9203.10(0).
t
SECTION 3. In-lieu fee program. Chapter 4.30 in added to the Municipal
Code, to read as follows: .
4.30.010 Purpose.
This Chapter establishes fees in-lieu of providing parking spaces within the
Central-Commercial (C-C) zone, as provided in the zoning regulations (Section
17.16.060 and Section 17.42.020). Fees collected pursuant to this Chapter
shall become part of the parking fund and shall be used solely for the
development or maintenance of,parking within the Central-Commercial zone.
4.30.020 Calculating fees
A. Amount of fees. The amount of the fee for new construction additions
to existing buildings and changes in occupancy shall be established by
resolution by the City Council.
B. 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.
Ordinance No. 1101 (1987 Series)
Page 3
C. The demolition or removal of all or a portion of an existing building
and its replacement with another structure of equal or less than the floor area
of the original building shall not be. considered new construction for purposes
of this chapter. However, all floor area in an amount beyond that contained in
the original building shall be considered an addition and fees shall be
calculated accordingly. Changes in occupancy which require additional parking
spaces and which occur in new construction or .an addition within two years of
final inspection of that new construction or addition shall be treated as new
construction or addition for purpose of this chapter.
D. The per space fee for new construction, additions or changes in
occupancy may be paid in either of the following methods:
1 . In a lump sum, prior to the issuance of construction permits for the
structure or occupancy for which the parking is required or prior to the
issuance of a city business license for the activity for which the parking is
required, if no construction permit is required. For those who have signed
parking acknowledgments, the lump sum payment shall be paid no later than
ninety (90) days after the award of a construction permit for a .municipal
parking structure located at Marsh and Chorro Streets.
2. In one installment per year, as provided in an amortization schedule
established by the City Finance Director. The term of said schedule shall not
exceed twenty years for fees $5,000 or greater, nor ten years for fees less
than $5,000. The interest rate shall be determined by the Finance Director
each January for that ensuing year, based on current market rates. The rate
offered at the beginning of any amortization schedule shall be fixed throughout
the entire payment period. The annual installment shall be due on January 1 '
' (delinquent on February 1 ). The penalty and interest for delinquent payments
shall be as provided for property taxes. Unpaid fees shall become a lien upon
the property for which the parking is required.
If the installment option is selected, the remaining principal
balance may be paid in full at any time without penalty.
For any use or structurefor which in-lieu fees are to be paid by
_ installment, the first installment shall be due on the January 1 following
issuance of the business license or building permit, but no sooner than ninety
(90) days after the award of a construction permit for a municipal parking
structure located at Marsh and Chorro Streets.
4.30.030 Change or cessation of use.
Once a property is subject to an obligation for in-lieu parking fees, the
following shall apply if the use is changed or discontinued:
Ordinance No. 1101 (1987 Series)
Page 4
A. If a structure is enlarged or a use is replaced with a use for which
more parking is required according tothetoning
glain
regulations.
the
es. as additionalparking requirement may be met by paying additional
in-lin Section 4.30.020.
B. If- a structure is reduced in area, or wholly or partially becomes
vacant, or a use is replaced with a use for which less parking is required
according to the zoning regulations, there shall be no change in the obligation
for parking in-lieu fees. There shall be no refund of a lump-sum payment nor
an abatement of installment payments. Once satisfied, the obligation for
parking in-lieu fees shall be deemed to meet the parking requirement for any
structure or use in the same location having a parking requirement equal to or
less than that for which the in-lieu fee amount was previously determined.
C. If a structure is destroyed, upon the property owner's request the
city shall refund the lump-sum payment or cancel the obligation for following
installment payments. Any future structure or use at the same location would
thereafter be required to meet the parking requirement as provided in the
zoning regulations, which may include payment'of a lump-sum in-lieu fee or
commencing at the beginning of the installment payment schedule.
D. If a structure is replaced'by a permanent structure intended for uses
requiring fewer parking spaces than those in the previous structure, according
to the zoning regulations, the city, upon the property owner's request, shall
refund the difference between the lump-sum payment for the previous structure
and the lump-sum payment which would be due for the replacement structur@,.or
cancel the obligation for the proportionate number of spaces covered. by .
1 installment payments.
4.30.040 Ownership change; dividing or merging properties
A change of ownership or the dividing or merging of properties shall not affect
an obligation for parking in-lieu fees or a determination that parking
requirements have been met according to fees paid for a particular use.
SECTION 4. A summary of this ordinance. approved by the City Attorney,
together with the ayes and noes, shall be published at least five (5) days
prior to its final passage in the Telegram-Tribune, a newspaper published and
circulated in said city, and the same shall go into effect at the expiration of
thirty (30) days after its said final passage. A copy of the full text of this
ordinance shall be on file in the office of the City Clerk on and after the
date following introduction and passage to print and shall be available to any
interested member of the public.
6 -•a
• r �
Ordinance No. 1101 (1987 Series
Page 5
INTRODUCED by the Council of the City of San Luis Obispo, at its meeting
held on the 21st day of September _ 1987, on motion of
Councilwoman Raova r seconded by Councilman Griffin
and on the following roll call vote:
AYES: Councilmembers Rappa, Griffin, Dovey, Settle and Mayor Dunin
NOES: Hone
ABSENT: None
14C
yor RON DUNIN
ATTEST:
City Clerk PAM VOGES
t APPROVED:
Ordinance No. 1101 (1987 Series)
Page 6
APPROVED:
City A inistrative Officer
City Atto ey
Community Development Director
1
ORDINANCE NO. 1101 (19.87 Series)
FINALLY PASSED this 20th day of October ,
19 gZ on motion of Councilman Settle- , seconded by
Councilman Griffin , and on the following roll call
vote:
AYES: Councilmembers .Settle, Griffin, Dovey and Mayor Ron Dunin
NOES: None
ABSENT: Councilwoman Penny Rappa
yor Ron Dunin
ATTEST:
1
City Clerk Pam&oges
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