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HomeMy WebLinkAbout03/19/2002, PH6 - PARKING IN-LIEU FEE ORDINANCE CHANGE conn c k M.6,"w March 19,2002 j acEnoa nEpoRt PH 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 . af b (CJ -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: lift Fly xqfflrz�� 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 �. / —��