HomeMy WebLinkAbout1998-10-13 City Council (9)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT:ADMINISTRATIVE
SERVICES
DATE:OCTOBER 13, 1998 CMR:394:98
SUBJECT:APPROVAL OF ORDINANCE TO INCREASE THE IN-LIEU
PARKING FEE AND REVISE THE METHODOLOGY TO
CALCULATE THE FEE
RECOMMENDATION
Staffrecommends that Council approve the attached Ordinance increasing the in-lieu parking
fee and revising the methodology for fee calculation.
BACKGROUND
On August 3, 1998 the Council approved in concept staffs recommendation (CMR:292:98)
to make the following changes to the methodology used to calculate the in-lieu parking fee,
and directed staff to return to Council with an ordinance to:
Establish the fee based on the highest cost option for parking projects that are under
design or construction at the time, rather than the lowest cost option. At the current
time, the highest cost option being designed is Lot R, and amounts to a fee of $30,250
per in-lieu space in 1998 dollars.
Authorize staff to also adjust the in-lieu fee to reflect more up-to-date cost
information for parking projects already under design or construction in the following
instances:
b)
at the time when the construction contract is awarded; and
at the time construction is completed. .
Exclude any bond financing costs from the fee.,
CMR:394:98 Page 1 of 3
Require that an in-lieu payment be calculated at the rate in effect as of the date the
obligation is incurred, but that a payment be calculated at the rate in effect on the date
the deferred payment is actually made, rather than at the time the agreement is
executed.
DISCUSSION
Staff’s recommendation to include a surrogate for land costs in the in-lieu fee is a shift in
current policy. It results in a higher fee, which could potentially lessen the desirability of
developing smaller parcels downtown. Where developers use the in-lieu fee to pay for some
of the required spaces, the higher fee could result in a shift-towards more private, on-site
spaces instead of the public in-lieu spaces. Provision of public parking results in more
intensive use of stalls than if they were reserved for a particular business. The actual affect
of a higher in-lieu fee on downtown development and on the provision of private versus
public parking is unknown. Staff believes, however, that the impact of the recommended
higher in-lieu fee will be only a marginal factor in private decisions made about providing
on-site versus public parking.
Staff has worked with the City Attomey’s Office to draft such an ordinance, and it is attached
for Council approval. The provisions of the new Ordinance will take effect 60 days after
Council adoption.
RESOURCE IMPACT
Funds collected from the in-lieu fee are deposited into a separate fund, the University
Avenue Parking Assessment District In-Lieu Parking Fund (In-Lieu Fund). Funds are used
only to defray the costs of the next parking facility that is constructed in the District.
Increasing the in-lieu fee will increase the amount available in the In-Lieu Fund, and will
therefore incrementally lower the annual assessment charged. If property owners do not
approve the assessment in a mail balloting procedure, as required by Proposition 218, then
the in-lieu fees collected would need to reside in the In-Lieu Fund until sufficient funds were
available to provide additional parking. Dollars available in the In-Lieu Fund are estimated
to total about $1.4 million for 75 unbuilt parking spaces, including interest, as of June 30,
1998. (This does not include the in-lieu fee to be paid at final building inspection for 24
spaces for the 390 Lytton project, or the fee to be paid for 9 spaces for the 400 Emerson
project.)
POLICY IMPLICATIONS
Staff’s recommendation is consistent with the draft Comprehensive Plan, which states that
the City should "Provide sufficient parking in the University Avenue/Downtown and
California Avenue business districts to address long-term needs" ( Policy T-45).
CMR:394:98 Page 2 of 3
TIMELINE
For project applications that the Planning Department has deemed to be complete prior to the
effective date of this ordinance, the fee in effect prior to this ordinance shall be used; for
project applications that are deemed to be complete by the Planning Department on or after
the effective date of this ordinance,, the new fee requirements shall apply in accordance with
this ordinance.
ENVIRONMENTAL REVIEW
The Council approved a negative declaration for the project in 1994. ~
ATTACHMENT
Ordinance
PREPARED BY: Jim Steele, Manager of Investments and Debt
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
CARL YEA~-S /
Director, Adn~istrative Services
EMILkY HARRISON
Assistant City Manager
CC:Chamber of Commerce (Susan Frank)
Downtown North Neighborhood Association
University South Neighborhoods Association
Chop Keenan
Jim Baer
John Baer
Ed Storm
Roxy Rapp
Warren Thoits
CMR:394:98 Page 3 of 3
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING SECTIONS 16.57.010, 16.57.030 AND 16.57.040
OF THE PALO ALTO MUNICIPAL CODE REI~TING TO IN-LIEU
PARKING FEES FOR NONRESIDENTIAL DEVELOPMENT WITHIN
THE UNIVERSITY AVENUE PARKING ASSESSMENT DISTRICT
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION i. Background, Intent and Purpose.
A.Pursuant to Ordinance No. 4256, adopted January 17,
1995, the City Council established an in-lieu parking fee on
commercial development within the University Avenue Parking
Assessment District, for developments meeting certain criteria
described in Section 18.49.100 of the Palo Alto Municipal Code.
B In accordance with Ordinance No. 4256, the in-lieu
fees will be used to finance the construction of new parking
facilities to meet the increased parking demand caused by new
nonresidential developments which do not provide the~ required
parking. It was the intent of the Council that the amount of~such
fees would equal the full cost of providing the required number of
parking spaces. ’
C.In enacting Ordinance No. 4256, the City Council
determined that there is a reasonable relationship between new
nonresidential development within the boundaries of the Assessment
District and the resulting need for additional parking facilities.
The City Council further determined that there is a reasonable
relationship between new nonresidential development and the use of
in-lieu fee revenues to finance construction of such additional
parking facilities. Relying upon the "Nexus and Cost Basis Study -
In-Lieu Parking iFee," prepared by the City of Palo Alto
Transportation Division, dated September 1994, and in the staff
report (CMR:524:94), dated November 28, 1994~ the Council determined
that cost estimates supporting the amount of the fee are reasonable
estimates of the cost of providing the necessary parking facilities,
and that the fees to be generated by new development would not exceed
the total costs of providing parking to serve the parking demand
created by such new development.
D.Subsequent to the adoption of Ordinance No. 4256, the
Council has approved for further design the consideration of two
identified multi-level parking structures on City-owned Lots S/L and
R. Based on cost estimates documented in the January 16, 1997,
"Downtown Parking Structure Feasibility Study" by the Watry Design
Group, summarized in CMR:183:97 (March 24, 1997), the Council has
determined that the costs for such structures will be considerably
more than originally estimated, and that the in-lieu parking fee
should be increased. Further documentation for this determination is
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included in CMR:292:98, and in CMR:394:98, which accompanies this
ordinance.
E.The Council hereby finds that the fees approved by
this ordinance will not exceed the total costs of providing parking
to serve the parking demand created by the development that will be
required to pay the fees. The Council further incorporates by
reference and thereby restates the findings made by the Council in
enacting Ordinance No. 4256.
~ECTION 2. Section 16.57.010 of Chapter 16.57 [In-Lieu
Parking Fee for New Nonresidential ~Development in the Commercial
Downtown (CD) Zoning District] of the Palo Alto Municipal Code is
hereby amended to read as follows:
16.57. 010 Applicability.The in-lieu parking fee
regulations set forth in this chapter shall apply only to
nonresidential development within the .University Avenue Parking
Assessment District which meets the eligibility criteria set forth in
subsection 18.49.100 (d) of this Code. i~iiiiii~~iiiii~iiiii~~
SECTION 3. Section 16.57.030 of Chapter 16.57 of the Palo
Alto Municipal Code is hereby amended to read as follows:
16.57.030 Calculation of In-lieu payment.
(a)Initial Fee. The fee for each 250 square feet of
gross floor area in a development shall equal the sum of the
construction, land acquisition, if any, and administrative costs
attributable to the provision of one new parking space, as
established by the City Council on the basis of calculations made by
the chief transportation official. The fee s all be ~,,~0
per 250 square feet of gross floor area,
~ -h ’~~ti ..............................
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SECTION 4. Section 16.57.030 of Chapter 16.57 of the Palo
Alto Municipal Code is hereby amended to read as follows:
16.57.040 Timing of payment.
~i!!!!~iii!i ~~i Fees shall be due and payable to the City of
Palo Alto at the transportation division prior to issuance of a
building permit for the development~l!ii!~ili~i~iiiiii~ii!li ~!~iii;,~ii~liiiii~
~iiii~~- Payment of the fee may be deferred to the date of final
building inspection approval of the development, provided the owner
of the real property for which the fee has been required enters into
an agreement with the city prior to. issuance of the building permit
for the development.
............ total .........of ....fee ..........................-’ - - ~
lOii .
per year { 8~ pe~ ....................fzom ........of issuance of
u~,= wu~u~ pexmit fo~ ....~,,= p~oject un~e .of p~>q~ent.. The
agreement shall also provide that in any action to collect the fee or
any portion thereof the City shall be entitled to all of its costs of
enforcement and collection, including reasonable attorneys fees. The
director of planning and co--unity enviro~ent shall be authorized on
behalf of the City to execute the agreement described in this
section, in a form acceptable to the city attorney.
SECTION 5 This ordinance was adopted at a duly noticed
public hearing. All supporting studies, reports and data were maSe
available to the general public for a period of at least i0 days
prior to the public hearing.
SECTION 6. The City Council certified the Final EIR for the
Downtown Study and ~approved the project described in the Study on
July 14, 1986, One of the provisions adopted in that action was to
authorize payment of an in-lieu fee for parking. This ordinance
implements the fee, No new regulations have been adopted that would
affect parking. Further, the current parking deficit of 1,490 spaces
(as of September 1993) is less than the 1986 deficit. Therefore, the
Council finds that the Downtown Study EIR may adequately serve as the
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basis for the environmental assessment and negative declaration (#94-
EIA-23) prepared for this project. Accordingly, the Council found in
its adoption of Ordinance No.4256 that establishment of the in-lieu
parking fee would not have a significant effect on the environment.
This ordinance enacts changes of an administrative nature only, and
it can be seen with certainty that such changes will have no
significant effect on the environment.
SECTION 7. This ordinance shall be effective on the thirty-
first date after the date of its adoption; provided, however, that in
accordance with Government Code section 66017, the fee hereby adopted
shall be effective 60 days after adoption of this ordinance.
SECTION 8. The fee established by this ordinance shall be
applicable to all projects for which a completed application has been
filed with the Department of Planning and Community Environment on or
after the effective date of this ordinance. Projects for which a
completed application was filed prior to the effective date of this
ordinance shall be subject to the fee in effect prior to the
effective date of this ordinance.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City dlerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of
Administrative Services
Director of Planning and
Community Environment
Acting Chief Transportation
Official
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