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HomeMy WebLinkAbout1997-07-07 City Council (34)TO: City ofPalo Altl 4 C ty Manager’s Report HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PLANNING AGENDA DATE: July 7, 1997 CMR:308:97 SUBJECT:RECOMMENDATION CONCERNING NEW PARKING ~STRUCTURES IN DOWNTOWN PALO ALTO - REFERRAL FROM POLICY AND SERVICES COMMITTEE AND FINANCE COMMITTEE REQUEST Thepurpose of this staffreport is to provide additional information on the proposed new parking structures in the downtown, in conjunction with recommendations coming back fi’om the Policy and Services Committee and the Finance Committee. RECOMMENDATIONS The recommendation of the Policy and Services Committee and the Finance Committee is that Council: 1.Approve, in principle, and direct staff to proceed with the necessary steps leading to: (a) the construction of a multi-level parking structure (four elevated decks, one at-grade level, and two below-grade levels on the Lots S/L site); (b) the construction of a multi-level parking structure (three elevated decks and one at- grade level) on the Lot R site in the Downtown Business District; and (c) the formation of a parking assessment district to fund such a project; 2.Authorize staff to negotiate a Phase II design contract with the consultant team utilized in Phase I and, if unable to successfully negotiate a satisfactory Phase II design contract, pursue a general solicitation of other consultants, consistent with the City’s established consultant selection procedures; 3. Direct staffto proceed with the appropriate steps to secure the following additional services: design/construction management, assessment district engineer, bond counsel, and financial advisor; and 4.Direct staffto proceed with-the appropriate steps to identify an alternative suitable location for the Teen Center, within the downtown area. CMR:308:97 Page 1 of 8 Staff also .recommends. that Council direct staff to use the balance in the In-Lieu Parking Fund account to help finance the consultant services needed prior to the formation of an assessment distg.ict, with the understandingthat if, for whatever reason, an assessment district is not eventually formed, such funds will need to be reimbursed to the In-Lieu Parking Fund by the General Fund. POLICY IMPLICATIONS The policy implications are the same as those discussed in CMR: 183:97 (Attachment 1). EXECUTIVE SUMMARY Council has previously approved a comprehensive parking plan for Downtown Palo Alto, one element of which included consideration of one or more new parking structures within the University Avenue Parking Assessment District. A feasibility study, prepared by Watry Design Group (Watry) was subsequently completed and forwarded to the Council on March 24, 1997, with referral to both the Policy and Services Committee and the Finance Committee for review and recommendation back to the Council,. The staffreport and feasibility study were discussed at the Marcia 25 meeting of the Policy and Services Committee, and the April 1 meeting of the Finance Committee. A copy of the staff report mad feasibility study (CMR:183:97) and the minutes of both Committee meetings are included as Attachments 1, 2 and 3, respectively. (The feasibility study is attached only to Council Members’ copies. Available to the public in the Transportation Divi’sion office, sixth floor, City Hall). During the Committee’s review, staff was asked to provide two additional items of information when this topic returned to the full Council. The first item concerns an informal survey of property owners to assess their level of interest and support for the proposal to constn~ct and fund two new parking structures. The second item concerns the amount of money that would be required to be expended prior to the formation of an assessment district, with the goal of minimizing the amount. Survey of Property. Owners As part of its review of the parking structure staff report and feasibility study, the Finance Committee asked staff to conduct an informal survey of property owners to assess their level of support for the proposal to construct and fund two new parking structures. The survey was to be based upon existing, readily available information, and the results were to be presented to the full Council at the time that the two Committees returned to the Council with their recommended actions. CMR:308:97 Pag~ 2 of 8 On April 14, survey material was sent to all property owners within the University Avenue Parking Assessment District. The survey material included: (1) an introductory cover letter, (2) a summ. ary of information from the feasibility study, (3) information on the estimated annual assessment for each individual property, and (4) a pre-addressed postcard survey response form. A set of these materials is included as Attachment 4. The survey response form provided an opporttmity for each property owner to check one of the following two choices: I support the proposal to build and fund two new parking structures. I do not support the proposal to build and fund two new parking structures. Responses have been received from owners of 148 parcels out of a possible total of 253 parcels. The results are summarized in Table 1. TABLE 1. Downtown Parking Structures Survey Results .. Responding Parcels (148)Total Parcels (253) Based upon assessment 66% YES 44% YES dollar amount 34% NO 22% NO Based upon parcel count 67% YES 39% YES 33% NO 19% NO The responses received, as well as the distribution of yes and no votes, are generally spread throughout the range of high, medium and low estimated assessments. While this was not a formal survey on whether or not to form an assessment district, it is interesting to understand how this particular response compares to the provisions of Proposition 218. The.relevant text, excerpted from the Proposition 218 Implementation Guide (Page A-7), is as follows: "The agency shall conduct a public hearing upon the proposed assessment not less than 45 days after mailing the notice of the proposed assessment to record owners of each identified parcel. At the public hearing, the agency shall consider all protest against the proposed assessment and tabulate the ballots. The-agency shall not impose an assessment if there is a majority protest. A majority, protest exists if, upon the conclusion of the hearing, ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment. In tabulating the ballots, the ballots shall be weighted according to the proportional financial obligation of the affected property." CMR:308:97 Page 3 of 8 ¯If the current survey results were interpreted according to the provisions of Proposition 218, .the upper left hand cell in the above table would be the appropriate basis. With a 38 percent NO vote and a 62 percent YES vote, a majority protest would not exist and the agency, therefore, would have the legal right to impose an assessment. The results of the survey indicate that: (1) the response rate is quite good for this kind of low key informal survey, and (2) there is a solid majority of respondents who support the proposal to design, build and fund two new parking structures (one on LOt R and one on Lots S/L). While one might expect that some of the yes votes might change to no when a formal ballot is taken, it is also likely that some of the no ballots and many of the non- respondents will become yes votes, once a final proposal is developed and presented in a pro-active manner, rather than the passive nature of this current informal survey. Review of Up-Front Costs As part of their review of the parking structure staff report and feasibility study, both the Policy and Services Committee and the Finance Committee expressed co.n.cern about the prospect of the City having to make a commitment, which could potentially be up to $2,000,000, prior to the formation of an assessment district. While such funds would be reimbursed from the proceeds of a bond sale if a new assessment district were successfully formed, there is no identified source of funding to reimburse such costs to the City’s General Fund flit turns out that a new assessment district cannot be formed. This concern has become more acute with the advent of Proposition 218, whereby a majority no vote from respondents to a formal survey, at the time of the formation of a new assessment district, would legally preclude the Council from forming the assessment district. Therefore, both Committees asked staffto review the up-front costs with the goal of reducing the amount to the minimum practical. Staffhas given considerable attention to this matter, with the objectives of: (a) defining the various work elements that need to be done, (b) identifying what portion of each work element must be done prior to the formation of a new assessment district and what portion can be delayed until after the formation of a new assessment district, and (c) determining reasonable cost estimates for each of the needed services. Based upon past experience, some survey information, and discussion with private sector representatives, staff believes the Architectural and Engineering design fees for this project should be in the order of 5 to 7 percent of construction costs, rather than the 9 percent incorporated into the feasibility study cost estimates. A precise amount for the design fee would be established through formal contract negotiations, which have yet to transpire. Table 2 provides a summary of the work elements and the associated cost estimates for such services that would be necessary to expend prior to the formation of a new assessment district. CMR:308:97 Page 4 of 8 TABLE 2, Cost Estimate for Work Elements to be Completed Prior to the Formation of an Assessment District 2. Project Management 3. A.D. Engineer’s Report 4. Financial Advisor 5. Bond Council 6. Balloting Process 7. Contract Planner Totals Architectural and Engineering (5-7%)$275,000 -494,000 180,000 15,000 25,000 0 10,000 $45,O00 $550,000 -675,000 $15,000 is for adjustment in current assessment district formula. Ifa new formula needs to be developed, .the amount would increase to $70,000. The amount of $550,000 to $675,000 is predicated on a decision that the action to form a new assessment district could reasonably be made at approximately the point where the plans are 60 percent complete, rather than 100 percent complete. As a project like this one progresses through the iterative steps of design and review, the time at which enough is known about the project to reasonably estimate the total cost to complete the design and construction is referred to as the Design Development Phase, which roughly coincides with the time at which the design drawings are approximately 60 percent complete and the design fee is approximately 40 percent expended. At this time, the project has gone through all of the City review bodies and there should be enough known about the mechanical, electrical, and plumbing systems to know what can and cannot be done. Based upon this level of design and related cost estimates, the City can proceed with the formation of an assessment district with reasonable assurance that the projects can be fully constructed within the funding limits of the bond sale. If the assessment district were based upon a lesser level of design (e.g., Schematic Design at 25 percent) there would not be sufficient understanding to assure that the projects could be completed for the cost estimate prepared at that time. These various levels of design phases and levels of detail are described in a letter fi’om Watry Design Group dated May 1, 1997, which is included as Attachment 5. Items 1 and 2, and to some extent Item 7, in Table 2, are directly related and proportional to the amount and level of design work completed at the time a new assessment district is formed. For example, the numbers shrwn are for a 60 percent level. A lower level of design completeness with higher risk would tend to lower these numbers, while a higher level of design completeness and lower risk would tend to increase these numbers. Items CMR:308:97 Page 5 of 8 3, 4 and 6 are costs totally expended in the period leading up to the formation of a new assessment district, and would not change as a result of proceeding with a higher or lower level of design cqmpleteness. Item 5 is done on contingency; therefore, a cost occurs only if and when a new assessment district is actually formed. Staff has had some discussion with several representatives of major properties in the downtown area concerning the idea of some public/private joint sharing of the up-front costs which are needed to fund the required services prior to the formation of a new assessment district. While there was interest and enthusiasm for working together .to achieve time and cost efficiencies, there was no interest or support for sharing the up-front costs. Their perspective was that the business vitality of the downtown is an important asset to the City, and, as such, the City should be willing to fill this particular role. Once the assessment district is formed, downtown property owners would be fully responsible for payment of all costs associated with the project. ALTERNATIVES In the previous staff report (CMR:183:97; March 24, 1997) several alternatives were included for Council consideration, including: o Do not proceed further with any new parking structure. Proceed with the development of only one of the recommended new parking structures, either (a) Lots SiL or (b) Lot R. Proceed, as recommended, with the development of two new parking structures as proposed; a seven-level structure on Lots S/L and a four-level structure on Lot R. Proceed with the development of larger or smaller sized parking structures on (a) Lots SiL and/or (b) Lot R. Proceed with further study and evaluation of a new parking structure on a site other than Lots S/L or Lot R. FISCAL IMPACT Funding in the amount of $80,000 was approved in the 1994-95 Capital Improvement Program (CIP No. 19530) for the purpose of conducting the feasibility study. Approximately $75,000 of that amount has been expended. The portion of Phase II [Parts A and B] work that requires funding, prior to the availability of funds from the formation of a new parking assessment district and the sale of bonds, is estimated to be approximately $550,000 to 675,000 in consultant services and other related costs. These services are a necessary precursor to a final decision regarding the formation of an assessment district. Therefore, funds to accomplish this work must originally be advanced from non-a;sessment district sources. This could require that the CMR:308:97 Page 6 of 8 City make a commitment to allocate approximately $550,000 to $675,000 from the. General Fund Budget Stabilization Reserve, until such time that an assessment district is formed (12 to 18. months). If a new. assessment district is successfully formed, proceeds from the bond sale would be used to reimburse the General Fund. If an assessment district is not eventually formed, this funding would not be recouped. Staff is recommending using the balance in the In-Lieu Parking Fund account (currently $760,000) to finance the portion of the monies needed for the consultant services that are needed prior to the formation of an assessment district. If an assessment district is not eventually formed, for whatever reason, such funds will need to be reimbursed to the In- Lieu Parking Fund, by the General Fund. ENVIRONMENTAL ASSESSMENT An environmental assessment will be prepared prior to the review and approval of the parking structures project. NEXT STEPS If Council approves this recommendation, future additional steps requiring Council approval include the following: a.A resolution expressing the Coua~cil’s fi~tent to use the proceeds from an anticipated future bond sale for reimbursement of Phase I costs, as well as Phase II design, management, and financing consultant services related to the development and funding of the parking structures, and incurred prior to the bond sale. b. Budget amendment ordinance(s) to provide funding for: (i) the design work (architectural design, construction plans, cost estimate, specifications, mad related bid documents), (ii) preliminary (Assessment District) Engineer’s Report; (iii)the design/construction management work; and (iv) the financing work (bond counsel and financial advisory finn) with the source of funds being from the General Fund and with the understanding that the General Fund is to be reimbursed from the proceeds of a bond sale, subject to the formation of a new parking assessment district. If an assessment district is not formed, the expenditure of General Fund monies will not be reimbursed. c. Award of a consultant contract for project management services during the design and construction phases. d. Award of a Phase II design contract for preparation of detailed engineering design and construction drawings, a detailed engineer’s estimate, general requirements and technical specifications, and other-related bid documents. e. Award of contract for preparation of a preliminary (Assessment District) Engineer’s Report for proposed Assessment District. CMR:308:97 Page 7 of 8 f. Acquisition of the services of a bond counsel finn and a financial advisory firm. g. Formation of a new parking assessment district. h. Sale ofbonds. i. Award of contract for construction of the parking structures. ATTACHMENTS 1: CMR:183:97; March 24, 1997 2: Minutes of March 25, 1997 Policy & Services Committee meeting 3: Minutes of April 1, 1997, Finance Committee meeting 4: Survey materials mailed to property owners 5: May 1, 1997 letter from Watry Design Group Prepared By:Ashok Aggarwal, City Traffic Engineer Marvin L. Overway, Chief Transportation Official Department Head Review: City Manager Approval: KENNETH R. SCHREIBER Director of Plamling and Community E Manager Planning Commission Architectural Review Board Historic Resources Board Public Art Commission Utilities Advisory Commission Project Study Committee Susan Frank, Chamber of Commerce Watry Design Group CMR:308:97 Page 8 of 8 ATTACHMENT 1 TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PLANNING AGENDA DATE: March 24, 1997 CMR:183:97 SUBJECT:Recommendation Concerning New Parking Structures in Downtown Pale Alto REQUEST .. In March 1994, the City Council appro~ced" a comprehensive parking plan for downtown Palo Alto. One of the elements of the plan was consideration of one or more new parking structures within the University Avenue Parking Assessment District. The City Council, subsequently, approved an agreement with the Warty Design Group (Watry) on December 4, 1995, to conduct a feasibility study. The purpose of this report is to forward the final parking structure feasibility study report to the Council for action and to request that Council direct staffto initiate the process that will lead to construction of two parking structures and the formation of a parking assessment district to fund such a project. RECOMMENDATIONS Staff recommends that Council: 1.Approve, in principle, and direct staff to proceed with the necessary steps leading to (a) the construction of a multi-level parking structure (four elevated decks, one at-grade level, and two below grade levels on the Lots S/L site); (b) the construction of a multi-level parking sllueture (three elevated decks and one at- grade level) on the Lot R site in the Downtown Business District, and (c) the formation of a parking assessment district to fund such a project; 2. Authorize staff to negotiate a Phase II design contract with the consultant team utilized in Phase I and, if unable to successfully negotiate a satisfactory Phase I~ design contract, pursue a general solicitation of other consultants, consistent with the City’s established consultant selection procedures; CMR:183:97 Page 1 of 37 3.Direct staff to proceed with the necessary and appropriate steps to secure the following additional services: design/construction management, bond counsel, and financial advisor; and 4.Direct stttff to proceed with the necessary and appropriate steps to identify an alternative suitable location for the Teen Center. Future additional steps requiring Council approval. a.A resolution expressing the Council’s intent to use the proceeds from an anticipated future bond sale for reimbursement of Phase I costs, as well as Phase II design, management, and financing consultant services related to the development and funding of the parking structures, and incurred prior to the bond sale. b.A budget amendment ordinance to provide funding for: (i) the design work (architectural design, construction plans, cost estimate, specifications, and related bid documents), (ii) the design/construction management work, and (iii) the financing work (bond counsel and financial advisqry finn) with the source of funds being from the General Fund and with the understanding that the ~eneral Fund is to be reimbursed from the proceeds of a bond sale, subject to the formation of a new parking assessment district. If an assessment district is not formed, the expenditure of General Fund monies will not be reimbursed c.Award of a consultant contract for project management services during the design and construction phases. d.Award of a Phase II design contract for preparation of detailed engineering design and construction drawings, a detailed engineer’s estimate, general requirements and technical specifications, and other related bid documents. e.Acquisition of the services of a bond counsel firm and aftnancial advisory firm. f.Formation of a new parking assessment district. g.Sale of bonds. h.Award of contract for construction of the parking structures. POLICY IMPLICATIONS Provision of additional parking in the downtown area is consistent with existing Comprehensive Plan Transportation Policy 10: Reduce employee or commuter parking in residential neighborhoods. It is also consistent with recommendations from the 1986 Downtown Study and the 1994 Chamber of Commerce/City of Palo Alto Downtown Multi-point parking program. The Downtown Urban Design Guide identifies parking as a crucial element to the ongoing success of a downtown commercial area and indicates that there is a general feeling that CMR:183:97 Page 2 of 37 there is not enough parking. The Downtown Urban Design Guide identifies two locations, Lots S/L and Lot R, as appropriate for new above and/or below ground parking structm’es. While the inclusion ofrestrooms appears to have broad general support, the provision of public restrooms in the downtown area is a new policy direction for the City and should be recognized as such. Most significantly, apart from the initial capital expenditure, public restrooms will necessitate a high level of ongoing daily maintenance and monitoring that must be provided and, consequently, funded. In the past, under substantially different circumstances, when the issue ofrestrooms was raised in conjunction with Johnson Park, the Council decided not to support the provision of restroorns. More recently, the Council has approved a CIP project for improvements in the downtown area, which includes consideration of the provision of public restrooms. Proposition 218 has introduced new risks for the City with respect to initiating an assessment district. If’parking assessment district property owners do not vote to approve an assessment, the City would have to absorb all costs incurred up to that decision point in time, including costs for the feasibility study, design, project management, and financial and legal services. Staff has estimated that expenditures for these items will be $2,000,000, in addition to the $75,000 ($80,000 budgeted) that has already been spent for the feasibility study. As only $80,000 has been budgeted to date, most of these funds are yet to be committed. The risk is higher because the decision on whether or not to form an assessment district could involve property owners, tenants, and residents at-large, rather than only the Council. The higher level of risk is a significant, changed condition regarding Council’s historic policy of committing City funds in anticipation of the formation of an assessment district. EXECUTIVE SUMMARY Based upon policies established as part of the Downtown Study (1986) and a comprehensive plan for downtown parking approved in 1994, Council established a Capital Improvement Program (No. ~19530) to study the feasibility of building a new parking structure(s) on one or more existing surface parking lots in the University Avenue Parking Assessment District. A consultant was hired, a Project Study Committee provided .guidance, and the study has now been completed. The scope of the study addressed parking need, site analysis, Schematic design options, financial analysis, and environmental assessment. Based upon the information developed during the feasibility study, including review comments by the Planning Commission and Architectural Review Board, plus a public workshop early in the process and a public meeting toward the conclusion of the study, the primary conclusions and recommendations are as follows: CMR:183:97 Page 3 of 37 There is a need for additional parking in the downtown area and there is support for the City to proceed with the provision of additional parking. While the mount of parking needed may vary according to one’s perspective of the probl’em, an amount in the order of 500 to 800 additional spaces, seems to be an appropriate next increment. The most suitable locations for one or more parking structures (based upon need, site characteristics, cost, and functional efficiency) are Lot R on the western edge of the downtown and Lots S/L in the central portion of the downtown. Lot O is not a realistic option, nor is a combination of Lots R and P. All other surface lots are also unsuitable for a stand alone parking structure. This does not preclude the possibility that at some time in the future one or more of these lots may have some potential, in conjunction with the redevelopment of adjacent private property. The recommendation is to build two parking structures, one on Lot R and one on Lots S/L. The parking structure on Lot R would be one surface level, three elevated levels and no below-grade level, for a total of four levels. This would pro~ide a total of 210 spaces, or 139 additional.spaces beyond the 71 spaces that presently exist. The parking structure on Lots S/L would be one surface level, four elevated levels, and two below-grade levels, for a total of seven levels. This would provide a total of 699 spaces, or 590 additional spaces beyond the 109 spaces that presently exist. The total net gain would be 729 spaces. The estimated 1996 cost (design, construction, financing and other related costs) to build these two new parking structures is as follows: 1996 COSTS BASED UPON FEASIBILITY STUDY Lot R ~ ~2h_R21_~2L Total Cost Cost/stall Cost/added stall $4.7milfion $14.4million $19.1milfion $ 22,600 $ 20,700 $ 21,100 $34,100 $ 24,500 $ 26,300 The above costs are in 1996 dollars. Depending upon when actual construction is started on each of the two proposed parking structures, the actual costs are expected to increase, due to inflation. For reference, the figures below reflect the effect of four years of cost increase (to the year 2000) at a 3 percent annual rate of increase. See Attachment 1 for the effect of this increase for the intervening years. YEAR 2000 COSTS BASED UPON 1996 COSTS + 3% PER YEAR INCREASES Total Cost $5.3 million $16.3.million $21.6 million Cost/stall $ 25,400 $ 23,300 $ 23,700 Cost/added stall $ 38,400 $ 27,600 $ 29,600 ClVlR:183:97 Page 4 of 37 The economic analysis indicates that the bonding capacity of the District appears to be substantially more than adequate to support the construction of both parking structures. The proposed parking structures would result in the following additionbJ annual assessments (estimated) to downtown properties over a period of 20 years, based on 1996 costs: ASSESSMENTS BASED UPON 1996 COSTS Lot R $ 0.21 Lots S/L $ 0.59 Both R & S/L $ 0.80 Current Rate $ 0.34 per assessed square foot per year per assessed square foot per year per assessed square foot per year per assessed square foot per year Again, for reference, the same information based upon estimated costs for the year 2000, including 3 percent annual cost increases, is provided below.See Attachment 1 for the effect of this increase for the intervening years. ASSESSMENTS BASED UPON 2000 COSTS Lot R $ 0.23 per assessed square foot per year Lots S/L $ 0.67 per assessed square foot per year Both R & S/L $ 0.90 per assessed square foot per year Current rate N/A The recent passage of Proposition 218 changes some of the procedures for establishing new special benefit assessments. While the extent of such change is not fully evident, it will likely increase the cost of debt financing and also require that the City pay an assessment for City Hall. It does not appear to preclude the use and appropriateness of a new parking assessment district to fund parking structures for the downtown area. For the structure on Lots S/L, the inclusion of a limited retail element at the comer of Bryant and Lytton would significantly enhance the urban design characteristics of the structure and the immediate surroundings. Due to the size and shape of Lot L, a small retail element can be achieved without the loss of any parking spaces, and, as such, seems to have the support of most interested parties. However, City staff would prefer not to have the iesponsibility for owning and managing such a retail space. The retail portion turns out to be relatively expensive on a cost per square foot basis. Furthermore, the retail portion of the parking structure will need a separate financing mechanism, since the parking assessment district mechanism cannot be used for the retail portion. CMR:183:97 Page 5 of 37 The recommendation includes incorporation of public restrooms into each of the proposed structures. A more complefe summary of the study process, findings, and conclusions is provided in the main body of this staff report, as well as the Downtown Parking Structure Feasibility Study - Final Report, a copy of which is included with this staff report. In addition, an Interim Report (June 12, 1996) that provides more detail regarding the site evaluations and the schematic design options, is available for review in the office of the Transportation Division, Civic Center, 250 Hamilton Avenue, sixth floor. In summary, there is a recognized need for more public parking, the most appropriate sites are Lot R and Lots S/L, there is support for parking structures on these two sites, the costs, albeit high, are supportable by downtown owners/businesses, and there is a strong imperative to proceed with a commitment to both structures simultaneously and in the most expeditious manner practical (planning, design, and financing); recognizing that the actual construction would very likely occur sequentially. At this time, it is premature to specify which structure might be built first. That decision can best be r~ade toward the end of the design stage, when it needs to be made and when more information is readily available. Primary_ Issues for Council Consideration Based upon the information developed during the feasibility study, including public meetings, study committee input and oversight, and preliminary reviews by the Planning Commission and the. Architectural Review Board,. staff has identified the following issues as being most pertinent to Council consideration and action, at this time. Issue 1: Number of Structures The study recommendation is to proceed with two parking structures, which together would provide 729 additional parking spaces (909 total parking spaces) in the downtown area. This conclusion is based upon the following considerations: The need for additional parking clearly exceeds the increment associated with any one structure. The addition of 729 new parking spaces, which would be provided by the two structm’es, seems to be an appropriate next increment.. The need for additional parking is geographically dispersed and the two proposed new parking structures would serve distinct, non-overlapping areas and needs. The additional required investment oftirne, energy, and money associated with the study, planning, design, construction, and financing of a second structure, at some future time, would be substantial and is unnecessary. CMR:183:97 Page 6 of 37 The bonding capacity of the parking assessment district is more than adequate to support two structures, and the annual assessments to property owners appear manageable. The level of support from interested parties in the downtown area appears to be higher for proceeding with both structures, than for either single structure. An alternative would be to proceed with only one parking structure at the present time, reassess the parking needs at the time that the initial parking structure is completed and fully operational, and then decide whether to proceed with the design, financing, and construction of a second parking structure. In this event, a choice would need to be made now regarding which of the proposed new structures would be first. The structure proposed for Lot R would provide 139 additional parking spaces (210 total parking spaces) while the structure proposed for Lots S/L would provide 590 additional parking spaces (699 total parking spaces). Given the level of need for parking, the increment of 590 spaces associated with the Lots S/L site would favor its selection over the Lot R increment of 139 spaces (210 total parking spaces). Doesthe Council agree that the City should proceed with two parking structures in the downtown, simultaneously, recognizing that actual construction may occur sequentially? Issue 2: Location of Structures An important part of the parking study was a comprehensive review of all downtown City parking lots, to assess the feasibility of using any single site as well as a combination of sites, to construct a parking structure. As illustrated in Attachment 2, ten of the existing surface parking lots (Lots A, C, E, F, G, K, L, N, P, and T) ended up with a rating of POOR; another two (Lots D and H) were rated FAIR; and three received a rating of GOOD. The study process reached the conclusion that Lot R and Lots S/L are both suitable for parking structures, and, furthermore, along with Lot S by itself, are the only sites that are suitable for parking structures given the level of technical understanding developed during the feasibility study and reasonable cost considerations. Attachment 3 provides a good visual picture of the areas of influence for each of the two proposed new parking structures, as well as their relationship with similar information for the four existing parking structures (Q Garage, Ramona Plaza, Civic Center, and Webster-Cowper). While it is physically possible to build a,parking structure on any surface parking lot, the realities associated with access, surrounding land. uses, and aesthetics introduce constraints that limit suitability. Design factors, including functional design and CIVIR:I83:97 Page 7 of 37 circulation requirements, seriously limit the munber of parking spaces and rapidly escalate the cost per net new space to a point where building a structure no longer makes reasonable sense. Does the Council agree that further steps related to the design of parking structures should be limited to Lot R and Lots S/L? Issue 3: Appearance of Structures What the proposed parking structures will look like is of concern and interest to everyone and, in no small way, influences a person’s perception regarding the suitability of the proposed new parking structures. While the feasibility study looked at a comprehensive range of issues that evaluated the feasibility as Well as identified some of the design features that the projects may incorporate (e.g., height, massing, retail, open areas, art, amenities, etc.), it clearly was not intended to establish the design appearance of the structures. For purposes of visualization, the consultant did prepare preliminary sketches of what such projects could look like. However, the actual design and appearance will flow out of the next step in the process which is to proceed with a design contract. That design will build upon the ideas that have come forth during the feasibility study, and undergo the same rigorous review and scrutinythat any project in downtown Palo Alto would experience. At this stage, it is only necessary to establish the overall general size, massing, amenities (art, multiple elevators, restrooms, security, natural lighting, etc.) and other features that should be carried forward into subsequent design work. Does Council support the overall general size, massing, amenities and other features associated with the two proposed structures and/or what other features should be carried forward into subsequent design work? Issue 4: Implementation/Timing The proposed structure on Lot R is a major project. The proposed structure on Lots S/L is significantly larger given its greater size, as well as the inclusion of below ground construction. Both projects represent a very significant undertaking that will have negative impacts during construction that must be minimized, and will require management staffresources that exceed current availability in terms of time and expertise. An optimistic schedule for proceeding, such as the one given in the Feasibility Study (Page 76), would have both structures completed midway through the year 2000..A more realistic schedule is probably 1 to 3 years beyond that point, depending upon what level of management resources the City decides to dedicate to these projects. CMR:183:97 Page 8 of 37 Staff believes that it is wise to complete these projects as soon as practical in order to: (i) reduce adverse impacts that will occur during the construction period, (ii) combat escalating prices and (ill’) provide needed additional parking as soon as possible. In order to complete th~se projects in a timely and efficient manner, it will be necessary for the Public Works Department to retain the services of a project management firm to provide both the expertise and day-to-day staffing needs for the projects. Such outside management services are an absolute necessity, if these projects are going to proceed into the design and construction stages. These project management services will reduce, but not eliminate, the need for City staff involvement and review during all phases of the project, and as a result, other scheduled projects may need to be delayed or rescheduled. Does Council support a strategy to complete the construction of the proposed parking structures as soon as practical, including a firm commitment to support and fund the use of a project management firm to provide both expertise and day-to-day staffing needs for the projects? Issue 5: Funding In the past, public parking structures, as well as surface parking lots, in the downtown area have been funded through the formation of Parking Assessment Districts. The City Council sells the bonds needed to fund all aspects of the planning, design, construction, financing, and management of the projects, and forms a Parking Assessment District to levy the necessary assessment on properties within the District, to pay off the bonds over an extended period of time, typically 20 years. Total annual assessment is equal to the current annual payment required of the City. The amount of the annual assessment to each individual property is in direct proportion to the parking deficiency attributable to each individual property (e.g. a property that provides all of its required parking pays no assessment). Staff does not see any reason or benefit from deviating from this precedent. Of more immediate importance is the need to fired (1) essentially all of the design work, (2) the project management services during the design phase, and (3) the financing and bond counsel services, prior to and in preparation of the formation of an assessment district. These consultant services are a necessary precursor to a final decision regarding the formation of an assessment district. Therefore, funds to accomplish these tasks must originally be advanced from non-assessment district sources. This would require that the City make a commitment to allocate approximately $2,000,000 from the General Fund, for an interim period of time. Ira new assessment district is successfully formed, proceeds from the bond sale can be used to reimburse such monies advanced from other sources. If an assessment district is not eventually formed, there is no other realistic source of funding, to reimburse such costs to the City. C/VlR:183:97 Page 9 of 37 Is the Council prepared to commit approximately $2,000,000, in order to proceed with the work that is necessary to reach a point where an assessment district can be formed, and does the Council agree in principle to the concept of using the sale of bonds and the formation of a new Parking Assessment District in the downtown, as a means to finance these proposed parking structures? Issue 6: In-Lieu Parking Fees In 1994, Council adopted an in-lieu parking fee for the downtown area. The fee, which is currently set at $17,848 (FY 96-97), is adjusted annually to reflect changes in the Construction Cost Index. To date, a total of approximately $760,000 has accumulated in the University Avenue Parking Assessment District In-Lieu Parking Fund due to payments for 42 in-lieu parking spaces and accrued interest. This sum represents payment for parldng spaces that certain developments (eligible for in-lieu payment) were required, but unable to provide. The intended purpose 0fthe monies collected through tl~e in-lieu fee is toiase them to pay for a portion of the cost of the proposed parking structures. Any balance in the account will be used to adjust downward the amount of the bond sale that is eventually established for these projects. /.fin-lieu fees continue to accumulate during the life of the bond repayment (20 years) they will be used to make what would be a small downward adjustment in the amount of the annual assessment to downtown properties, which is needed in order to meet the required annual bond payment. At the time the parking structures are fully completed and an accurate cost accounting is prepared, staff will review the appropriateness of making an adjustment to the in-lieu parking fee, and bring such information with recommendations to the Council for further consideration. Since the in-lieu parking fees are intended for paym. ent toward the cost to construct additional parking spaces, an appropriate possible use of the current monies in the in-lieu account is to help fund a portion of the $2,000,000 needed for the consultant services that are a necessary precursor to a final Council decision regarding the formation of an assessment district (see Issue5). However, if thismoney is used for this purpose and in an assessment district is not eventually formed and parking structures actually built, the in-lieu monies would need to be reimbursed to the In-Lieu Account, for future use in the provision of additional parking spaces in the downtown area. The funds that are currently available in the in-lieu parking fee account are not included in the cost information in the feasibili~ study or this staff report. The effect would be a marginal change in the estimated assessment rate of approximately a 4.5 percent reduction, based upon the eurrerit account balance of $750,000. CMR: 183:97 Page 10 of 37 Does Council want to use the balance of funds in the In-Lieu Parking Fund account to help finance a portion of the monies needed for consultant services that are needed prior to the formation of an dssessment district, recognizing that if an assessment district is not eventually formed, such funds will need to be reimbursed to the In-Lieu Parking Fund? Issue 7: Maintenance, Operations and Enforcement Costs Two additional parking structures within the downtown area will result in increased costs for maintenance and operation of the two structures, as well as increased costs for parking enforcement. Such costs include sweeping and cleaning, repair and replacement, eleetri¢ity, enforcement, etc. Current City policy, with respect to downtown parking, is to include operating and maintenance costs as part of the City’s operating budget with funds coming from the sale of parking permits rather than the establishment of a maintenance assessment district for operating and maintaining parking facilities. While it appears that an increase in maintenance and opergting costs can be addressed by increasing the number of parking permits that are sold, as well as increasing the price of the parking permits, which appear to encompass sufficient elasticity to support an increase, it is equally important that the City be committed to securing the necessary staff and/or contract services to provide for the additional work. The Police Department estimates that it will need one additional full time Parking Enforcement Officer (at $52,000 per year) when the two proposed garages are operational. The Public Works Department estimates that it will take an additional $100,000 to $200,000 per year to properly maintain the two proposed structures, including restrooms, on a day-to-day basis, PlUs management/staffing costs associated with overseeing the maintenance contract work, utility costs, and infrastructure repair/replacement costs. Is the Council prepared to make the necessary commitments to see that proper, appropriate funding mechanisms are established and approved to support the required levels of maintenance, operations and enforcement associated with the additional parking structures? Issue 8: Teen Center/425 Bryant Building A very important consideration, with respect to the proposed parking structure on Lots S/L, is the status of the small parcel of land and building (formerly the home of the Palo Alto Board of Realtors) at 425 Bryant, between Lot S and Lot L. The City’s Gas Fund purchased this property in 1985 from Gas Fund reserves, with the expectation that the property would eventually be used as part of a parking solution at the Lots S/L site. CMR: 183:97 Page 11 of 37 Currently, the building is being used as a City founded and sponsored teen center. The proposed parking structure for Lots S/L presumes that this small building will be demolished and that the parcel of land will be combined with Lot S and Lot L, upon which the proposed L6t SiL parking structure would be built. While the feasibility study did not evaluate alternative locations for a teen center, it was clearly recognized throughout the study that an alternative suitable location for the teen center would need to be established, before the proposed Lot S/L parking structure could be built. If Council directs staff to proceed further with the development of a parking structure on Lots S/L, Council should also direct staff to take the necessary steps to identify an alternative suitable location for the Teen Center. While there will likely be a cost associated with securing and occupying an altemative suitable location for theTeen Center, the cost is unknown at this time. The source of funding for such costs is likely to be the General Fund, since it would not be an appropriate charge to include in the parking assessment district funding. An additional significant issue related to this property is the ownership ahd value of the property itself. The property was. purchased with Gas Fund reserves and is owned by the Gas Utility. /.fit is to be used for the purpose of parking, the parking assessment district should pay the current market value and transfer ownership to the City, as per all existing downtown parking lots and structures. The property was appraised in 1993 and was valued at $450,000. Staff believes that this is an appropriate amount to in include in the parking assessment district for payment to .the Gas Fund, in return for transfer of ownership to the City for parking purposes. Consideration of this cost is not included in the cost information in the feasibility study or this staff report. The effect would be a margiinal change in the estimated assessment rate of approximately a 2.7 percent increase, based upon a value of $450,000. Is the Council prepared to initiate a process to identify an alternative suitable location for the Teen Center, and does the Council agree in principle to the concept of having the parking assessment district reimburse the Gas Fund an amount of $450,000 for a transfer of ownership of building and property at 425 Bryant? Issue 9: Public Restrooms Incorporating public restroom facilities as part of each structure would help address the recognized need for such facilities within the downtown area. The conceptual sketches developed as part of the feasibility study included the provision of public restrooms, and the study committee, public meeting comments and staff recommend that they be incorporated into these facilities. The cost to build the restrooms can be included as part CMR:183:97 Page 12 of 37 of the parking assessment district funding, and has been included in the cost information included in the feasibility study and this staff report. The conceptual lblan, at this early stage, is to have two units in the proposed structure on Lot R and two units in the proposed structure on Lots S/L, with each unit being self- contained, self-cleaning, unisex, and with a full complement of facilities. While the inclusion of restrooms appears to have broad general support, the provision of public restrooms in the downtown area is a new policy direction for the City and should be recognizedas such. Most significantly, they will necessitate a high level of ongoing daily maintenance and monitoring, which must be provided, and, consequently, funded. The ongoing cost of maintenance and monitoring is unknown at this time. Summary: Is the Council prepared to support the idea of including public restroom .~ facilities in each of the new parking structures? Issue 10: Retail Element The clear and single focus of these proposed project’s has been to pr0;vide additional parking and not to create retail space, or any other non-parking related uses. However, through the feasibility study process, it has become evident that for the proposed structure on Lots S/L, the inclusion of a small retail element at the comer of Bryant and Lytton would significantly enhance the urban design characteristics of the structure and the immediate surroundings, and should be made a part of the project. Furthermore, due to the particular size and shape of Lot L, this small retail element (about 2400 square feet) could be incorporated without the loss or displacement of any parking spaces. A small mini-park is an alternative use that was considered for this relatively small residual space, as a means to soften the comer and complement Cogswell Park across Bryant. A mini-park would entail some construction costs, as well as ongoing. maintenance costs. Another potential use for further consideration, is the possibility of including space for the Teen Center. The inclusion of the small retail element is recommended by the study committee, and seems to have the support of most interested parties. City staff’, however, would prefer not. to have the responsibility for owning and managing such retail space, and is concerned that the inclusion of such retail space may be perceived and/or represented by some as City intrusion into the downtown retail property sector. Whether this space is used for retail, a mini-park, the Teen Center, or other public uses, it is dear that the funding for that particular portion of the total structure would not be eligible for inclusion in the parking assessment district financing, and, therefore, would CMR:183:97 Page 13 of 37 require an alternative source such as the General Fund. The incremental cost of the-retail component is approximately $740,000, including all hard and soft costs related to design and construction, but excluding financing related costs. Included as Attachment 4, is a letter from the Watry Design Group explaining the retail-related cost components included in the cost estimates. The cost information included in the feasibility study and this staff report include funding for the retail component as part of the total assessment district funding. A cost comparison for the proposed parking structure on Lots S/L, with and without the retail component, is shown on Page 44 of the Feasibility Study Final Report. The deletion of the retail component from the parking assessment funding would result in a marffinal change in the estimated assessment rate of approximately a 4.5 percent reduction, based upon a cost of $740,000. Given the relatively high estimated cost of $740,000 to provide a relatively small retail building component of 2,400 square feet ($300/square foot), the appropriateness of expending public funds for this component is questionabl.e. An altemative approach.could be to not include a retail/other use building component, and simply proceed with an open landscaped area, or a mini-park (mini-park is estimated to cost about $80,000 more than the simple landscaped option) and leave the door open to the future possibility of a private development proposal to utilize this space for retail use, if and ’when the market would support such a decision. Another possibility would be to include space for the Teen Center in-lieu of, or in addition to, retail space. Staff believes that the issue of whether to include a retail component and/or space for the Teen Center or a mini-park, can best be studied and resolved as part of the further design development work and review process. It may be possible to come up with design solutions that meet multiple objectives. Does the Council support the possible., inclusion of a retail component, possible inclusion of space for the Teen Center, or some other use building, as part of the proposed parking structure on Lots S/L? Issue 11: Public Art During the feasibility study process, representatives of the Public Art Commission raised the issue of inclusion of art within the design of the two proposed parking structures. The architect involved in the feasibility study expressed the view and vision that art could be part of the design of the structures, and, therefore, need not be high cost. The Study Committee voiced concerns regarding having the parking assessment district pay for public art, but also agreed that .the inclusion of public art is appropriate, if limited to simple art at minimal cost. CMR:183:97 Page 14 of 37 SUMMARY COSTS - TABLE 1. 1996 COSTS BASED UPON FEASIBILITY STUDY Total Cost $4.7 million Cost/stall $22,600 Cost/added stall $34,100 Assessment*$0.21 LaILS]L~Both R & S/L $14.4 million $19.1 mi!lion $20,700 $21,100 $24,500 $26,300 $ 0.59 $ 0.80 *per assessed square foot per year YEAR 2000 COSTS BASED UPON 1996 COSTS + 3% PER YEAR INCREASES Total Cost $5.3 million $16.3 million $21.6 million Cost/stall $25,400 $23,300 $23,700 Cost/added stall $38,400 $ 27,600 $ 29,600 Assessment*$0.23 $¯ 0.67 $.0.90 *per assessed square foot per year Effect of various potential changes on estimated costs shown above: Change due to use of available monies in In-Lieu Parking Fund equals a 4.5% reduction in costs and corresponding $0.04 reduction in the annual assessment rate. Change due to reimbursement to Gas Fund for 425 Bryant property equals a 2.7% increase in costs and a corresponding $0.02 increase in the.annual assessment rate. Co Change due to deletion of retail component from Lot S/L financing equals a 4.5 % reduction in costs and a corresponding $0.04 reduction in the annual assessment rate. Does the Council support the inclusion of public art as a component of the design of the proposed two parking structures? Issue 12: Assdssments for Civic Center One of the changes associated with Proposition 218 is that public buildings are to be included in the assessment role. The City has two public buildings within the parking assessment district, the Senior Center, which has regularly paid an annual assessment in the same manner as private properties and the Civic Center, which has been handled in a different manner. Historically, when the Civic Center was built, the City directly paid for what is currently 139 spaces for its use. The rest of the spaces (currently 569) were funded through assessment district financing. City ’ employees and other City related uses utilize about 279 spaces, or 140 more spaces than the original 139 that were paid for by the City. This number is based upon an annual survey of garage usage and varies slightly from year tO year, based on City employee parking needs, occasional.restriping, and pa.st projects such as the seismic retrofit project and the provision of designated handicapped parking stalls, both of which resulted in the loss of spaces. Rather than pay into the assessment district, the City has historically paid for the ttse of these excess spaces by offsetting maintenance costs for parking facilities that would otherwise have been paid through some type of maintenance assessment district. The provisions of Proposition 218 appear to require that the Civic Center be treated exactly like other properties in the downtown. Based upon that criteria, the 71,000 square feet in the Civic Center (including the Police Department portion) would require 284 spaces (4 spaces per 1,000 square feet). Since the City has provide 164 spaces itself, the deficit for the Civic Center would be 120 spaces. The 120 space deficit (or the associated 30,0050 square feet) would be the basis upon which the Civic Center building would be assessed a proportional share of the annual debt service, or approximately 1.4 percent of the 2.1 million square feet of assessed square footage in the downtown area. This would translate into approximately $25,000 per year as the City’s share of the total annual assessment of $1,776,000 (1996 dollars)for both structures. Summary: This is an informational issue, not requiring policy direction at this time. Issue 13: Neighborhood Residential Parking One of the purposes of the proposed parking structures is to create additional parking spaces that can be used by downtown.employees who are presently on the wait-list to purchase a parking permit and/or are parking in residential neighborhoods to the north and south of the downtown area. While the impact of the relocation of the Palo Alto Medical CMR:183:97 Page 16 of 37 Foundation, as well as the outstanding Council assignment to assess the feasibility of establishing a residential parking permit program in adjacent residential areas, has yet to be determined, it is certain to create potential significant change which, in conjunction with increased availability of employee permit parking, could be a unique opportunity to seriously address and significantly resolve the issue of employee parking intrusion into residential areas adjacent to the downtown. Summary: This is an informaiional issue, not requiring policy direction at this time. FISCAL IMPACT Funding in the amount of $80,000 was approved in the 1994-95 Capital Improvement Program (CIP No. 19530) for the purpose of conducting the feasibility study. Approximately $75,000 of that amount has been expended. The portion of Phase II [Parts A and B] work that requires funding, prior to the availability of funds from the formation of a new parking assessment district and the sale of bonds, is the consultant services for: (a) all of the design work (architectural design, construction plans, cost estimate, specifications, and related bid documents); as well as (b) project management services during the design phase, and (c) some of the financing work (bond counsel and financial advisory finn). These consultant design services are a ¯ necessary precursor to a final decision regarding the formation of an assessment district. Therefore, funds to accomplish these tasks must originally be advanced from non- assessment district sources. This would require that the City make a commitment to allocate approximately $2,000,000 from the General Fund for an interim period of time. If a new assessment district is successfully formed, proceeds from the bond sale can be used to reimburse such monies advanced from other sources. If an assessment district is not eventually formed, there is no other realistic source of funding to reimburse such costs to the City. In the past, when the City has intended to use the proceeds from an anticipated future bond sale for reimbursement of some current expense (prior to the bond issue), it has been the City’s practice to ask the Council to pass a resolution of Intent to Issue Bonds, prior to the expenditure of any such funds. If directed to proceed with the proposed parking structures, staffwill prepare the necessary resolution for Council adoption prior to award of the Consultant contract. The City also has the option of using the balance in the In-Lieu Parking Fund account (currently $760,000) to help finance a portion of the monies needed for the consultant services that are needed prior to the formation of an assessment district. However, if an CMR: 183:97 Page 17 of 37 assessment district is not eventually formed, for whatever reason, such funds will need to be reimbursed to the In-Lieu Parking Fund. Other related fuiure cost items include increased maintenance and operations ($100,000 to $200,000 per year), increased enforcement (insert $52,000 for one Parking Enforcement Officer), and Teen Center relocation (cost to be determined). Construction of the two proposed parking structures will restflt in the loss of revenue from the paid attendent operation currently in Lot S, which will actually result in the City saving some money, since the current operation is not self-supporting, and, therefore, continues to be subsidized. There may be some potential reduction in parking citations during the period of construction, as well. Proposition 218 has introduced new risks for the City with respect to initiating an -assessment district. Ifparldng assessment district property owners do not vote to approve an asses.sment, the City would have to absorb all costs incurred up to the time of that decision, including costs for the feasibility study, design, project management, financial and legal services. Staff has estimated that expenditures for these items will be $2,000,000 in addition to the $75,000 ($80,000 budgeted) that has already been spent for the feasibility study. As only $80,000 has been budgeted to date, most of these funds are yet to be committed. The risk is higher because the decision on whether or not to form an assessment district could involve property owners, tenants and residents at-large, rather than only the Council. The higher level of risk is a significant, changed condition regarding Council’s historic policy of committing City funds in anticipation of the formation of an assessment district. The implications of Proposition 218 are discussed in more detail in the Fiscal Impact section of the main body of this staff report. ENVIRONMENTAL ASSESSMENT An environmental assessment will .be prepared prior to the review and approval of a parking structures project. CM’R:183:97 Page 18 of 37 Prepared By: Ashok Aggarwal, City Traffic Engineer Marvin L. Overway, Chief Transportation Official Department Head Review: KENNETH R. SCHREIBER Director of Planning and Community Environment City Manager Approval: GLENN S. ROBERTS Director~-’~’~"/,~~~~" of publie~~rks .. Manager CMR:183:97 Pago 19 of 37 Recommendation Concerning New Parking Structures in Downtown Palo Alto RECOMMENDATIONS Staff recommends that Council: Approve, in principle, and direct staff to proceed with the necessary steps leading to: (a) the construction of a multi-level parking structure (four elevated decks, one at-grade level, and two below grade levels on the Lots S/L site; (b) the construction of a multi-level parking structure (three elevated decks and one at-grade level) on the Lot R site in the Downtown Business District; and (c) the.-formation of a parking assessment district to fund such a project; Authorize negotiation of a Phase I1 design contract with the consultant team utilized in Phase I and, if unable to successfully negotiate a satisfactory Phase II design contract, pursue a general solicitation of other consultants, consistent with the City’s established consultant selection procedures; o Direct staff to proceed with the necessary and appropriate steps to secure the following additional services: design/construction management, bond counsel, and financial advisor; and 4.Direct staff to proceed with the necessary and appropriate steps to identify an alternative suitable location for the Teen Center. Future additional steps requiting Council approval include. A resolution expressing the Council’s intent to use the proceeds from an anticipated future bond sale for reimbursement of Phase I costs, as well as Phase II design, management and financing consultant services, related to the development at~d funding of the parking structures and incurred prior to the bond sale. b.A budget amendment ordinance to provide funding for: (i) the design work (architectural design, construction plans, cost estimate, specifications, and related CMR: 183:97 Page 20 of 37 bid documents); as well as (ii) the design/construction management work; and (iii) the financing work (bond counsel and financial advisory fn’rn) with the source of funds being from the General Fund, with the understanding that the General Fund is to be rgimbursed from the proceeds of a bond sale subject to the formation of a new parking assessment district. Award of a consultant contract for project management services during the design and construction phases. Award of a Phase II design contract for preparation of detailed engineering design and construction drawings, a detailed engineer’s estimate, general requirements and technical specifications, and other related bid documents. eo Acquisition of the services of a bond counsel firm and financial advisory firm as well as a design/construction management firm. Formation of a new parking assessment district. g. Sale of bonds. h. Award of contractfor construction of the parking structures. ]3ACKGRO~ In July 1986, the City Council approved the Downtown Study, which included numerous measures affecting parking in the downtown area. One such measure was to undertake a study to evaluate the feasibility of constructing an additional parking structure in the downtown area. In March 1994, the City Council approved a comprehensive parking plan for downtown Palo Alto. One of the elements of the parking plan was consideration of one or more new parking structures withi~ the University Avenue Parking Assessment District (Downtown Assessment District). The City Council subsequently approved a Capital Improvement Program (CIP) Project for FY 94-95 (No. 19530) entitled "Downtown Parking Structure Feasibility Study". The purpose of the Downtown .Parking Structure Feasibility Study is to investigate the overall feasibility of developing a new parking structure on one or more sites located in the Downtown Assessment District. A Project Study Committee (PSC) was formed to help evaluate aud select a consultant to conduct the study, as well as to review and CMR:183:97 Page 21 of 37 comment on the consultant’s work and provide guidance to staff throughout the study process. The PSC is comprised of the following members: Chop Kegnan Roxy Rapp John Baer Georgie Gleim Rick Tipton Julie Maser James McFall Victor Ojakian Jim Harrington Jim Gilliland Ashok Aggarwal Marvin Overway Keenan Land Company : Roxy Rapp Company Premiere Property Management Gleim Jewelers American Hotels City Appointee - ARB (initial) City Appointee- ARB (current) City Appointee - Planning Commission City Staff- Public Works Department City Staff- Planning Department : City Staff- Transportation Division : City Staff- Transportation Division Following an extensive Consultant selection process, inciuding written proposals and oral interviews, the Warty Design Group (Watry) was selected to conduct the feasibility study. In December 1995, a contract with Watry was approved to conduct the Downtown Parking Structure Feasibility Study. That study has now been completed. While the current contract with Watry is for only the Phase I work (Feasibility Study), provision has been made so that if Council makes an affirmative decision to proceed with the Phase II work (final design and construction), Warty may be invited to negotiate for the Phase II work. ~OLICY IMPLICATION~ Provision of additional, parking in the downtown area is consistent with exi’sting Comprehensive Plan Transportation Policy 10: Reduce employee or commuter parking in residential neighborhoods. It is also consistent with recommendations from the 1986 Downtown Study and the 1994 Chamber of Commerce/City of Pale Alto Downtown Multi-point parldng program. The Downtown Urban Design Guide identifies parking as a crucial element to the ongoing success of a downtown commercial area, and indicates that there is a general feeling that there is not enough parking. The Downtown Urban Design Guide identifies two locations, Lots S/L and Lot R, as appropriate for new above and/or below ground parking structures. CMR: 183:97 Page 22 of 37 DISCUSSION Project Description The project was to study the feasibility of building new parking structure(s) on one or more existing surface parking lots within the downtown area. Such structures could be multi-level above and below ground structures (similar to the existing Webster-Cowper Parking Garage), a single deck over an at-grade level (similar to the two existing structures on Cambridge Avenue in the California Avenue Business District), or something in between. The scope of work for the current Feasibility Study included: (1) an evaluation of site characteristics, (2) an analysis of parking demand and supply, (3) development of schematic designs, preliminary architectural sketches, and cost information, (4) a financial and economic analysis, (5) an environmental assessment, (6) public meetings, and (7) conclusions and recommendations. Current Parking in Downtown At the present time, the Downtown Assessment District has 2,257 public off-street parking spaces located in 19 parking facilities (15 surface parking lots and 4 garages). Attachment 5 illustrates the location of each facility. The public off-street parking supply is used for (a) flee, short-term (2 and 3 hour) parking for customers and others and (b) all day permit parking for employees.. Lot S on Bryant Street across from the Senior Center was changed to an attendant pay parking lot in December 1995, for a trial period of one year. The purpose is to accommodate more cars through tandem parking, as well as to provide parkin~ for more than 3 hours on a daily basis. Subsequently, the first hour of parking in this lot was made free to enhance the parking lot usage and Council has approved additional time for this trial arrangement. Employee permits are sold ($200 per year; $65 per quarter) by the City and are valid for all day parking in certain designated lots. Permits are sold on a first-come first-served basis and, generally, there is a waiting list for most locations. Currently, there are 1,313 permits (755 annual; 558 quarterly) sold for the district and there is a waiting list of 1,317. While the cost of the permits has not changed since 1984, staffhas been working with the Chamber of Commerce Parking Committee to review parking related revenues and expenditures for the downtown area and expects to make a specific proposal to increase parking permit fees in the Mtmicipal Fee Schedule, as part of the review and approval of CMR:183:97 Page 23 of 37 the 1997/98 Budget; and, thereafter, to review and adjust such fees as appropriate, in conjunction with the City’s two year budget cycle. All of the on-street parking spaces are available for free, short-term (2 hour) parking for anyone. Need For Additional Parking The Downtown Study adopted by the Council in July 1986 established a parldng deficit of 1600 spaces in the downtown area. The 1996 Commercial Downtown Monitoring Report, which includes a report on the change in the number of parking spaces since 1986 due to construction projects, indicates that the parking deficit number is now 1,535 spaces (Attachment 6). Periodic surveys of parking intrusion into adjoining neighborhoods north and south of University Avenue indicate that approximately 1300 non-resident vehicles are parking in these areas. Not all of these non-resident vehicles are related to activities in the downtown core area (e.g., some vehicles relate to. people who work outside of the downtown such as PAMF, SOFA, etc.). The Downtown Marketing Committee and the Parking committee of the Chamber of Commerce, as well as property owners, have voiced serious concerns regarding the parking deficit and strong support for providing additional parking. As part of the current feasibility study, the consultant prepared an evaluation of the need for additional parking. The evaluation included: (a) a survey of existing parking lot utilization (occupancy) and, (b) an analysis of parking demand based upon building size and location. The survey confirmed the common perception that the peak demand occurs weekdays around the noon-time lunch period when, essentially, all parking spaces are fully utilized. Evenings and weekends are becoming increasingly busier, although parking spaces are still available, albeit not necessarily in convenient, well identified places. While the stu-vey found that Lot S was under-u~ed, this is attributable to instituting a paid parking lot on a trial basis. Prior to that change, Lot S was one of the most heavily utilized parking lots, due to its convenient central location. Using the blended parking rate requirement (4 spaces per 1,000 square feet) included in the City’s zoning ordinance, the consultant calculated the parking requirement for each building in the downtown area. The resultant total parking requirement, minus the private parking that some properties provide and minus the City’s public spaces in lots and garages, produced a theoretical residual parking deficit of approximately 6,000 spaces. CMR:183:97 Page 24 of 37 While this theoretical deficit substantially overstates the actual parking deficit, the data can be used as a helpful indicator for determhting the location(s) of the parking deficit. Using the theoretical parking deficit as a relative index (rather than an absolute measure), the Purple Zon~ (Lots R, P & O plus Q Garage) has the higl~est deficit, followed by the Lime Zone (Lots S, L, F, K, D, E & G). Relatively smaller deficits exist in the Coral Zone (Lots A, C & N plus B Garage & Civic Center Garage) and the Blue Zone (Lots T and H plus Webster-Cowper Garage). Site Characteristics There are presently 15 City-owned public parking lots and 4 parking garages in the Downtown Assessment District. Initially, each of the surface lots was evaluated with respect to the following characteristics: Accessibility and street Capacity Surrounding Land Use Soil Conditions Functional Efficiency Aesthetic Compatibility Attachment 2 shows a summary rating (Good, Fair, Poor) regarding the relative potential for developing a.parking structure. While it is possible to build a parking structure on any of the surface parking lots, it is not practicallo .do so on most of the lots due to ftmetional inefficiency resulting from the size and shape of the lot and/or adjacent property characteristics. From this initial evaluation, Lot S, Lot R, Lot O and the combination of Lots S/L were the only lots rated as GOOD. Lot D and Lot H were rated as FAIR, and the remaining lots (Lots A, C, E, F, G, K, L, N, P, & T) were rated as POOR. Based upon the existing site characteristics, location analysis of the relative parking deficit, and the cost per added stall, Lots R, S and S/L were finally selected for possible development of parking structures. (In looking at Lot R, there was also an interest in considering the possibility of combining it with Lot P [Lots R/P].) n~d~tual Design Alternatives Initially, the consultant developed 30 conceptual alternatives with associated general cost estimates. The alternatives varied from single elevated decks to multi-level structures, and the construction costs varied from a low of $13,900 to a high of $46,400 per additional CMR:183:97 Page 25 of 37 stall. The table on pages 32 and 33 of the Feasibility Study - Final Report provides a good sutmnary of the 30 conceptual alternatives that were considered in the early part of the study process. Lot O (Emerson/High): Due to its rating and parking demand, two design options were considered for Lot O. One is a single elevated deck with one level accessed from High Street and sloping up toward Emerson, and one level accessed from Emerson Street and sloping down (below grade) as it extends toward High Street. The second consists of one elevated deck set back from the property lines and accessed from High Street via a speed ramp (a ramp that takes vehicles directly to a floor above, without going through the parking area). While Lot O is a heavily utilized lot and would be a very good location to provide additional parking, the size and features of the lot and the adjacent properties make any structure functionally inefficient. While the cost/stall to build a parking structure would fall in a reasonable range, the cost/added stall falls in an unacceptably high range, due to the fact that the net gain in spaces is very .low. Therefore, ..Lot O Was not considered a reasonable candidate, and was not ftLrther evaluated. Lot R (High/Alma south): Several design options were evaluated for Lot R, including (1) a single elevated deck with one level accessed from Alma Street and sloping up toward High, and one level accessed from Emerson Street and sloping down (below grade) as it extends toward High Street, (2) a single elevated deck accessed from !-Iigh Street via a speed ramp, and (3) a multi-level structure with two to four elevated decks and one at-grade level, with a speed ramp that continues upward to provide access to additional floors. A total of up to four elevated decks (plus one at-grade level) could be achieved within the existing 50 foot heightlimit. Lots R/P (High Street): Given the proximity of Lot P to Lot R, consideration was given to the possibility of combining Lots R and P to create a much larger, multi- level structure. This would involve either an underground tunnel or an overhead bridge. Preliminary analysis concluded that these options were not practical, due to the relatively high cost of providing either a tunnel or a bridge, coupled with the relatively low number of additional parking spaces that would be created. Therefore, the Lot R/P (combination) was not considered a reasonable candidate, and was not further .evaluated. Lot S (Bryant/Florence): Several design options were evaluated for Lot S (without Lot L), including (1) a multi-level, structure with either two, three, or four elevated decks and one at-grade level (nothing below grade), (2) a multi-level structure with either two, three, or four elevated decks, one at-grade level, ~tg_d one CMR:183:97 Page 26 of 37 level below grade, (3) a multi-level structure with two elevated decks, one at-grade level and one level below grade, plus provision for two .additional elevated decks in the future, and (4) a multi-level structure with four elevated decks, one at-grade level, and two below grade. Lot S is the best site in terms of functional efficiency due to the size and shape. It is also in a convenient central location that will enhance accessibility and utilization, and the cost/added stall is relatively economical. Lot S/L (Bryant/Lytton): Taking into consideration the proximity of Lot L to Lot S and the fact that the City owns the intervening properly between the two parking lots, another viable option is a combination of the two parking lots coupled with the intervening lot. Several design options were evaluated for Lot S/L, including: (1) a multi-level structure with either two, three, or four elevated decks and one at- grade level (nothing below grade), (2) a multi-level structure with either two, three, or four elevated decks, one at-grade level, na~ one level below grade, (with and without retail and restrooms) and, (3) a multi-l.evel structure with, four elevated decks, one at-grade level, and either one or two below grade levels (with retail and restrooms 9_t with a public park and restrooms). The size and shape of Lot L are such that there would be some residual land that could be available for some other use, because it could not be effectively used for parking. Therefore, the inclusion of ground floor retail and/or a park was considered on the Lot L frontage. This feature provides an opporttmity to.reduce the visual impact, as well as improve the pedestrian environment. ~nmental Effects Probable environmental effects include: (1) increased street traffic in the immediate vicinity of the parking structure, (2) better accommodation of parking demand, with reduced parking intrusion into adjacent residential neighborhoOds, (3) displacement of existing parking during construction of the project, (4) pedestrian and bicycle circulation, (5) noise and air quality, and (6) visual impact in relation to the existing setting and adjoining sites. None of these effects were found to be significant .and staff does not anticipate that an Environmental Impact Report will be required. The Planning Commission and Architectural Review Board were asked to make a preliminary review when sufficient information regarding the .parking deficit, site selection, design concept alternatives, and the possibility of incorporating ground level retail was developed. CMR: 183:97 Page 27 of 37 Summary comments from the Planning Commission and ARB include: ® Support for additional parking, The most suitable locations for parking structures are Lot R, Lot S, or Lots S/L combined, Support for retail, bathrooms, public art, Support for construction of two structures, Support for two below-grade levels on the S/L site, Concern about mass and that the structures be well designed in terms of details, landscaping, lighting, safety, signing, pedestrian and vehicular circulation, and Concern about existing parking intrusion into the adjacent neighborhoods and interest in measures that would reduce its magnitude. The Project Study Committee (Committee) for this feasibility study has met on numerous occasions, to review and discuss the information presented by the consultant. While the Committee has generally agreed on all aspects of the work that have been completed to date, there was a notable difference of opinion regarding whether Lot S i~y itself should receive further consideration, as well as whether further consideration should be given to the inclusion of ground floor retail. By the time the feasibility study was completed, the Committee fully supported proceeding with a multi-level structure on both Lots S/L (not Lot S alone), as well as the inclusion of a ground floor retail element for the proposed structure on Lots S/L, but limited only to the residual area of Lot L that Cannot be used effectively for parking. The Committee voiced concern regarding paying for public art within the parking structures, but also agree that the inclusion of public art is appropriate if limited to simple art and minimal cost. The preliminary cost estimates prepared by the consultant reflect their professional judgment and experience based upon their preliminary understanding of the project, and represent a cost for which a parking structure could be provided under average conditions based upon 1996 costs. The special review and design considerations that typify Palo Alto projects, as well as unknown site conditions, may result in higher rather than lower costs. A more precise cost estimate will be prepared as part of the next phase of the work (Phase II, Part A). The cost information presented in the feasibility report and referenced in this staff report is organized into several components including (a) hard costs, (b) soft costs, (c) total costs excluding financing costs, (d) financing costs, and (e) total costs including financing costs. These same cost figures are alternately presented as: (i) cost per square foot, (ii) cost per CMR:183:97 Pag~ 28 of 37 stall, and (ih’) cost per added stall. There are no right-of-way costs included because each proposed project is planned for an existing City-owned parking lot. Any discussion of costs or cost comparisons with experience on other projects must be accompanied with a clear underst,qnding of what components of cost are being discussed and compared. Otherwise one ends up comparing apples and oranges with a less than helpful outcome. For example, the cost estimate (in 1996 dollars) for the proposed structure on Lots S/L ranges from $13,900 per stall to $24,500, depending upon whether one is talking about the hard costs only and referring to the total number of stalls provided ($13,900) or total costs including financing and referring to the cost per added stall ($24,500). Both numbers are correct, and there are several intermediate points that would be equally correct numbers. For general purposes, staff believes that the total cost and the cost per added stall, both of which should include financing costs, are the most suitable for discussion and comparison because they best reflect the true cost (total cost) and relative value (cost per added stall) of the project. Chapter 5 of the feasibility study provides concise information regarding the financing costs, the total bond sale requirements, the annual debt service and the assessment rate and range of assessments, attributable to each of the proposed parking structures, based upon 1996 costs. The following table provides a brief summary: 1996 COSTS BASED UPON FEASIBILITY STUDY Total Construction Costs (Hard and Sot~ Costs) Total Financing Costs Total Bond Issue Average Annual Debt Service Assessment Rate/Square Foot Lot R Lots S/L Lot R & Lots S/L $4,057,000 $12,589,000 $16,646,000 $683,000 $ 1,851,000 $ 2,534,000 $4,740,000 $14,440,000 $19,180,000 $439,000 $1,337,000 $1,776,000 $0.21 $0.59 $0.80 CMR:183:97 Page 29 of 37 YEAR 2000 COSTS BASED UPON 1996 COSTS + 3% PER YEAR INCREASE Total Construction Costs (Hard and Soft Costs) Total Financing Costs$ Total Bond Issue. Average Annual Debt Service Assessment Rate/Square Foot Lot R Lots S/L Lot R & Lots SfL $4,566,000 $14,169,000 $18,735,000 $769,000 $2,083,000 $ 2,852,000 $5,335,000 $16,252,000 $21,587,000 $494,000 $1,504,000 $ 1,998,000 $0.23 $0.67 $0.90 The current assessment rate per square foot for parking in the downtown area is $0.34 which covers two partially outstanding bond issues, a relatively small one ($60,000 to $70,000 annual debt service) that will be fully paid in 2003 and a larger one ($600,000 to $650,000) that will be fully paid in 2007. The feasibility study points out that the combined assessment of $0.80 ($0.’21 + $0.59) for both proposed parking structures implies a potential annual rent increase of’about 2.2 percent to 2.4 percent, based upon typical annual rent (NNN) of $33 to $36 per square foot for leased commercial space in the downtown area. While this is characterized as normally tolerable, sales per square foot and operating margins vary substantially from one business to another, and what is tolerable for one business may not be for another. The added parking capacity has the potential to provide a net benefit to a business if the increased sales of that business more than offset the increase in assessments. Public Meetings A public workshop was held on May 16, 1996, to share information and seek public comments regarding the information that had been developed. Approximately 1,000 notices of the workshop were mailed to property owners within the downtown assessment district, downtown merchants/tenants, neighborhood representatives for the residential areas north and south of downtown, members of the City Council, Planning Commission, Architectural Review Board, Historic Resources Board, Public Arts Commission and Comprehensive Plan Advisory Committee. Notices were also published in the Palo Alto Weekly and the Daily newspapers. Approximately 40 people attended the workshop. The comments received at the workshop are presented in Attachment 7. A second public meeting was held on November 21, 1996 to share the study findings and solicit additional public comments. Notice of the meeting was mailed to the same potential audience as described above for the first meeting. Approximately 30 people CMR:183:97 Page 30 of 37 attended the meeting. Comments received at the meeting varied from general support for constructing multi-level parking structures at both sites (Lot R and Lots S/L) to not providing additional parking, but rather regulating the demand for parking by charging for parking and imIilementing a local shuttle bus service. In preparation for the current discussion before the Policy and Services Committee and Finance Committee, approximately 1,000 notices (Attachment 8) were mailed to property owners within the Downtown Assessment District, downtown merchants/tenants, neighborhood representatives, and member of boards and commissions. Notices were also published in the Pale Alto Weekly and Daily. Recommended Plan The recommended plan is to proceed with the development of (1) a multi-level structure on the existing City parking Lots S/L site (four elevated decks, one at-grade level, and two below grade), and (2) a multi-level structure (three elevated decks and one.at-grade level) on the existing City parking Lot R site. -The recommended plan is expected to yield up to 729 additional parking spaces, at a total cost of approximately $19.1 million (1996 dollars) or $26,300 per added stall. With the addition of four years of cost increases (at 3 percent per year), the total cost of the recommended plan to build two parking structures would be approximately $21.6 million (2000 dollars) or $29,600 per added stall. The following table shows the relevant details. SUMMARY COSTS - TABLE 2. No. of Existing Spaces No. of Additional Spaces Total Construction Cost 19965 20005 Construction CostperAddedSpace 19965 20005 Total Cost(includingfinaneing)19965 20005 Total CostperAdded Space 19965 20005 Total AnnualAssessment(6.75%;20yrs)19965 20005 AverageAnnual Assessmenff SquareFoot 19965 20005 Lot R 71 139 $4.1 million $4.6 million $29,200 $32,800 $4.7 million $5.3 million $34,100 $38,400 $439,000 $494,000 $0.21 $0.23 Lots S/L 109 590 $12.6 million $14.2 million $21,300 $24,000 $14.4 million $16.3 million $24,500 $27,600 $1,337,000 $1,504,000 $0.59 $0.67 Total 180 729 $16.7 million $18.8 million $22,800 $25,700 $19.1 million $21.6 million $26,300 $29,600 $1,776,000 $1,998,000 50.80 $0.90 CMR:183:97 Page 31 of 37 ALTERNATIVES A host of alternatives were considered and evaluated as part of the feasibility study - 15 alternative sites’, 30 schematic designs for the most promising sites, and possibilities of retail or a mini-park as part of the Lot S/L structure. At this point, based upon the information provided throughout the feasibility study, the realistic alternatiVes to the recommended plan for Council consideration include the following: 1. Do not proceed further with any new parking structure, 2.Proceed with the development of only one of the recommended new p .arking structures, either (a) Lots S/L or (b) Lot R. 3.Proceed with the development of larger or smaller sized parking structures, either (a) Lots S/L and/or (b) Lot R. 4.Proceed with further study and evaluation of a nev~ parking structure" on a site other than Lots S/L or Lot R. FISCAL IMPACT Funding in the amount of $80,000 was approved in the 1994-95 Capital Improvement Program (CIP No. 19530), for the purpose of conducting the feasibility study. Approximately $75,000 of that amount has been expended. The portion of Phase II [Parts A and B] work that requires funding, prior to the availability of funds from the formation of a new parking assessment district and the sale of bonds, is the consultant services for: (a) all of the design work (architectural design, construction plans, cost estimate, specifications, and related bid documents); as well as (b) some of the design/construction management work; and (c) some of the financing work (bond counsel and financial advisory firm). These consultant design services are a necessary precursor to a final decision regarding the formation of an assessment district. Therefore, funds to accomplish these tasks must originally be advanced from non- assessment district sources. This would require that the City make a commitment to allocate approximately $2,000,000 from the General Fund (or the use of monies from the In-Lieu Parking Fund, for an interim period of time. If a new assessment district is successfully formed, proceeds from the bond sale can be used to reimburse such monies advanced from other sources. If an assessment district is not eventually formed, there is no other realistic source of funding to reimburse such costs to the City. CMR:183:97 Page 32 of 37 In the past, when the City has intended to use the proceeds from an anticipated future bond sale for reimbursement of some current expense (prior to the bond issue), it has been the City’s practice to ask the Council to pass a resolution of Intent to Issue Bonds, prior to the expendittire of any such funds. If directed to proceed with the proposed.parking structures, staffwill prepare the necessary resolution for Council adoption prior to award of the Consultant contract. The City also has the Option of using the balance in the In-Lieu Parking Fund account (currently $760,000) to help finance a portion of the monies needed for consultant sewiees that are needed prior to the formation of an assessment district. However, if an assessment district is not eventually formed, for whatever reason, such funds will need to be reimbursed to the In-Lieu Parking Fund. Other related future cost items include increased maintenance and operations ($100,000 to $200,000 per year), increased enforcement (insert $52,000 for one Parking Enforcement Officer) and Teen Center relocation (cost. to be determined),. Construction of the two proposed parking structures will result in the loss of revenue from the paid attendant operation currently in Lot S, which will actually result in the City saving some money, since the current operatioh is not self-supporting and therefore continues to be subsidized. There may be some potential reduction in parking citations during the period of construction, as well. Under Proposition 218, the "Right to Vote on Taxes" initiative passed by California voters in November 1996, there are new, more restrictive requirements now in place for ¯ special assessments. Those new requirements would apply to a new downtown parking structure assessment. They include the following points: ao A more rigorously defined Engineer’s Report, which clearly calculates the special benefits to each property from the project, and the amount of the assessment. Only special benefits are now assessable, not general benefits. bo "The amount of the proposed assessment for each identified parcel shall be calculated and the record owner of each parcel shall be given written notice by mail of the proposed assessment, the total amount...chargeable to the entire dislyiet, the amount chargeable to the owner’s particular parcel, the duration of such payments, the reason for the assessment and the basis upon which the amount of the proposed CMR:183:97 Page 33 of 37 assessment was calculated, together with the date, time, and location of a public hearing" on the assessment" (Proposition 218, Article X13D, Section 4c). c.A mail vot~ is required and each property owner must be mailed a ballot to vote on the assessment. A public hearing in which the votes received through the mail are tabulated. The votes must be weighted according to the proportion of the assessment. That is, a property owner with a $5,000 assessment would get a vote weighted twice as heavily as another with a $2,500 assessment. A majority of the weighted votes must be in favor of the assessment, in order to proceed. Once an assessment is approved by property owners, voters may circulate a petition to put the issue of the assessment before all of the voters. A majority of voters in the City (not a majority of property owners in the assessment district) can vote to overturn that assessment. While the likelihood of citywide vote.rs desiring to overturn an assessment that they themselves do not pay is remote, it is not impossible. f. If voters did vote to overturn an assessment, it is also unlikely that an assessment which pays for bond repayments could legally be overturned. As reported by the State Legislative Analyst’s Office, "many bond specialists indicate that the debt impairment clause in the federal constitution would prevent local residents fi’om eliminating a...revenue stream if that action would jeopardize the security of bonded indebtedness," (Understanding Proposition 218, December 1996, page 37). Most commentators on Proposition 218 believe it is extremely unlikely that the courts would allow an assessment that pays for bonded indebtedness to be overturned; A further complicating factor in Proposition 218 is a section which says that where "tenants are directly liable to pay the assessment...in question," those tenants shall be treated as if they were the property owner as far as participating in assessment proceedings and having the right to vote on the assessment. The impact of this clause is unclear. The author of Proposition 218, Jonathan Coupal of the Howard Jarvis Taxpayers Association, has written that "ifa tenant of real property is ~ (emphasis in original) liable to pay an assessment, that tenant would have the right to protest and vote" on an assessment (Proposition 218, Statement of Drafters’ Intent, Proposition 218 Implementation Guide, League of California Cities, page Ao 72). Staff does not know how many of the downtown leases between owners and tenants contain provisions in their leases for ~ pass through of assessments. When assessments are calculated by the City and delivered to the County CMR: 183:97 Page 34 of 37 Assessor’s Office, howev6r, it is the property owners that receive the assessment on their property tax bill. In summary, th~ fiscal implications of Proposition 218 are that if parking assessment district property owners do not vote to approve an assessment, the City would have to absorb all costs incurred up to that time for the feasibility study, design, financial and legal services. Staff has estimated the total budgeted expenditures for these items will be $2,000,000. As only $80,000 has been budgeted to date, most of these funds are yet to be committed. In conclusion, Proposition 218 has introduced new risks for the City with respect to initiating an assessment district. If parking assessment district property owners do not vote to approve an assessment, the City would have to absorb all costs incurred up to the time of that decision, including costs for the feasibility study, design, project management, financial and legal services. Staffhas estimated that expenditures for these items will be $2,000,000 in addition to the $75,000 ($80,000 budgete .d) that has already been spent for the feasibility study. As only. $80,000 has been budgeted to date, most offlaese funds are yet to be committed. The risk is higher because the decision on whether or not to form an assessment district could involve property owners, tenants and residents at-large, rather than only the Council. ENVIRONMENTAL ASSESSMENT An environmental assessment will be prepared prior to the review and approval of a parking structures project. STEPS FOLLOWING APPROVAl, With the completion of the Parking Structure Feasibility Study, Phase I of the two-phase process for the provision of additional public parking in the Downtown Assessment District has been completed. Procedurally, Phase II, if authorized by the Council, is comprised of three sequential parts: (i) Part A is the preparation of bid documents necessary to build a project, including detailed engineering design and construction drawings, a detailed engineer’s cost estimate, general requirements and technical specifications, and other related bid doenments; (ii) Part B is the process of forming an assessment district to finance the project; and (iii) Part C is the actual physical construction of.the project. CMR: 183:97 Page 35 of 37 Phase II; Part A Phase 17 A would require that the City retain the services of a qualified team of consultants to develop the detailed engineering design and construction drawings, detailed erigineer’s cost estimate, specifications and requirements, and other related technical and legal documents necessary to advertise and award a contract to construct a specific project. The development of such documents would include the review and necessary approvals by the City, including the Planning Commission, ARB., various affected City departments, and the Council, as well as public information meetings for property owners, tenants, and neighborhood residents. The Request for Proposals and the consultant evaluation and selection process were set up in such a way as to solicit, evaluate, and select firms based upon their capability to provide necessary services for both Phase I and Phase II. This was done to ensure continuity and consistency between the planning and feasibility work, and possible subsequent design and construction work. It was also done with the understanding that if (and only if) Council ,makes an affirmative decision to proceed with the Phase 17 work, and subject to the discretion of the City’s project manager regarding the quality of the work performed and continued suitability of the selected firm, the consultant selected for Phase I would be invited to negotiate for Phase II work (without going through another consultant selection process). If staff was unable to successfully negotiate a satisfactory contract for Phase II work, a general solicitation to other consultants, consistent with the City’s established consultant selection procedures, would occur. In any event, a final design contract for Phase 17 would go to the Council for approval. Staff is satisfied with the Phase I work done by the consultants, believes that they would be suitable for the Phase II work, and proposes to pursue negotiations with them for the Phase 11 work, if the Council makes an affirmative decision to proceed with Phase 17. Phase II, Part B Phase 11 B, is the process of forming a new assessment district to finance a project. Phase ~ B would require that the City also retain the services of a bond counsel firm and a financial advisory firm to assist staff with the legal and procedural steps related to the formation of an assessment district, and the preparation and sale of bonds. Also, as part of Phase 17 B, it would be necessary to establish the legal boundaries of the new assessment district and a proceedings formula to be used to determine the annual assessments upori the real property within the assessment district. This CMR:183:97 Pago 36 of 37 will be reviewed and considered at the time of preparation of the Engineer’s Report, but at the present time staff does not anticipate any changes from the current boundaries and formula. Phase II, Part C Phase II C involves the issuance and sale of bonds to raise the necessary funds to pay for the project, and the actual construction of the parking facility. The construction work will involve advertisement and award of a construction contract and related items necessary to construct, manage, and finance the project. ATTACHMENTS/EXHIBITS 1: Effect of Inflation on Parking Structure Costs and Assessments 2: Parking Lot Rating Summary 3: Parking Structure Areas of Influence (Parking Supply Radius Map) 4: Letter from Watry Design Group, dated March 17, 1997 5: Map of Parking Facilities in Downtown Area 6:Excerpt from 1996 Commercial Downtown Monitoring Report (Parkin~ Deficit Table) 7:Comments from Public Workshop 8:Notice of Council Committee Discussions 9:Downtown Parking Structure Feasibility Study - Final Report co:Planning Commission Architectural Review Board Historic Resources Board Public Art Commission Human Relations Commission Utilities Advisory Commission Project Study Committee Susan Frank, Chamber of Commerce Watry Design Group CMR:183:97 Page 37 of 37 ATTACHMENT 2 Excerpt of minutes from March 25, 1997 Policy and Services Committee meeting Special Meeting March 25, 1997 o o Oral Communications ...................2 Downtown Parking Structure Feasibility Study .......2 Adjournment : Review of Legislative Positions and PLatforms for 1997 15 Discussion of Future Meeting Schedules and Agendas 20 The meeting adjourned at 9:48 p.m .......21 2.Downtown Parking Structure Feasibility Study Chief Transportation Official Marvin Overway said the staff report (CMR:183:97) addressed recommendations from the recently completed Downtown Parking Structure Feasibility Study (the Study) regarding the provision of one or more new parking structures in the Downtown area. The Study examined a broad range of issues in a general level of detail and was not intended to provide detailed d~sign and final resolution. The specific details would be left to the following phase of the design development and review, provided a policy decision to proceed was made. The specific recommendations before the Policy and Services (P&S) Committee were for the City to: i) develop two parking structures, one on a combination of Lots S and L with four levels above ground and two below ground, and a second structure on Lot R along Alma and High Streets, three levels above ground and one at ground, none below ground; 2) negotiate a design contract with Watry Design Group Architects & Engineers (Watry) toward the implementation of the contracts; 3) proceed with securing additional services; and 4) initiate a process to locate an alternative site for the Teen Center. The steps, although relatively benign, were the first in a process which would lead to a $20 million project for two major new parking structures and the formation of a Parking Assessment District to fund the structures which would provide a net gain of 729 new parking spaces in the Downtown area. The tota! cost for building was roughly $19.18 million, so the value per additional stall was $26,300, or $0.80 per square foot per year for 20 years on each assessable square foot in the Downtown Assessment D±strict. The staff report had identified a number of primary and secondary issues: I) Two structures would be provided simultaneously providing the 909 total spaces. 2) Design and financing should proceed simultaneously with the possibility of construction, sequentially or simultaneously. 3) The appearance of the structute dealt primarily with the overall size, massing, and types of amenities rather than specific architectural design, which had not yet been determined. 4) The inclusion of art, elevators, restrooms, security, etc., warranted some consideration and could either be built into the design or not. 5) Implementation and timing had indicated a completion date of mid-2000; however, staff thought realistically one to three years longer.. The general consensus was to complete the structures as quickly as possible to reduce adverse construction impacts, combat escaiating prices, and provide additional parking as soon as possible. 6) In order to proceed in an efficient and timely manner, the Public Works Department needed a full-service project management consultant both for the professional expertise brought to the job as well as day-to-day staffing needs. A project of such size was beyond the capability of City staff to include as another item and proceed with any kind of time efficiency. 7) The proposal was to form a Parking Assessment District, similar to the way all former parking projects had been handled in the past. The new Proposition 218 had changed some aspects of assessment district financing. The staff report identified the need for up to $2 million before the formation of an assessment district, with certain risks being associated with the funds. Should an assess- ment district not be formed for any reason’, the $2 milliDn would not be collectible. 8) An in-lieu parking fee had been established some time back, currently at $760,000, which could be used to fund the up-front costs. If, however, an assessment district were not formed, the monies would have to be reimbursed to the in-lieu parking fee, since legally collected with the intent of construct- ing parking. 9) Maintenance and operation as well as police enforcement would bring on additional costs. To counter the cost, increased revenues from permit sales would be seen. i0) In 1985, the City purchased with Gas Fund monies the Teen Center which had been appraised in 1993 for $450,000. The Parking Assessment District would.reimburse the Gas Fund the amount of $450,000 for ownership of the property which would pass to the City. ii) The concept was for two restroom facilities in each structure. The preliminary design in the Study had incorporated the structure in a manner which would not adversely impact the amount of parking provided. The restrooms would be as self-contained and self- cleaning as possible, recognizing a certain level of maintenance would be required. 12) The prospect of providing approximately 2,400 square feet of retail in a portion of the structures on the corner of Lytton Avenue and Bryant Street couldnot effectively be used for parking spaces. The structure would occupy a portion of Lot L; but because of the layout, a residual piece of land would either be left open or landscaped or used for retail. The retail component, although opposed by some at the beginning of the Study, had taken on additional support. The cost for retail was substan- tial and would require discussion. 13) The Study had identified the interest in having p~blic art included in the structures. Discussions with the architect as well as the Public Art Commission 3/25/97 P&S: 3 (PAC) were to seek ways to incorporate art into the actual design of the building rather than taking a spot and putting a "piece of art on a podium. 14) In the past, the Civic Center had not paid into assessment districts because the City had outright paid for a certain number of spaces, and the assessment district had been formed to pay for an additional increment of spaces. Over time, the City had used more spaces than had been paid for initially. Each year, an accounting was made for the excess spaces in the maintenance funds of the parking assessment districts, i.e., rather than paying into the assessment district, the City had paid for maintenance of the existing parking facilities. Proposition 218 failed to provide for such flexibility or approach. If public facilities were to be part of the assessment, which staff had estimated on the $20 million project, the amount was $25,000 for the parking deficit the City had in the building. The other public building, the Senior Center, paid into the assessment dis£rict all along and had provided some of its own parking. The neighborhood residential parking was a unique opportunity to seriously address and resolve the issue of employee parking ihtrusion into~esiden- tial areas. The new structures, in conjunction with Council’s direction to investigate residential parking and the changes which would occur with the movement of the Palo Alto Medical Foundation (PAMF), would provide the City with opportunities it never had before. While no particular plan had been developed, the opportu- nity was available to do things which would not otherwise be possible. Council Member Eakins asked why a portion of Lot L was unbuildable. Mr. Overway said the layout of Lot L was determined in relation to the ability to enter, exit, and circulate with the Lot S portion. Two right-angle rows of parking were possible and were the most efficient; however, a space along the corner could not be used for parking. If the area were not used for retail, it could be use.d for a mini park or landscaped area. Council Member Eakins asked about the possibility of incorporating art into the building design. T. J. Towey, Architect, Watry Design Group, said that during the meetings with the public, PAC, and the Planning Commission, the idea of having the parking structure contain a certain amount of ornamentation either through tile in the base or ornamental metal involving an artist and adding ~n extra dimension of the building had been discussed. For e~ample, the handrails on the outside of the building, while a functional necessity, with some extra attention and some extra funding, could provide an artistic 3/25/97 P&S: 4 element, or a pre-cast panel could be replicated across the building. Council Member Fazzino asked about using landscaping to essentially hide the structure and create a more positive visual effect, particularly a structure which would be located in the center of Downtown. While supportive of a structure, a parking garage which was the primary image of Downtown Palo Alto was not supported. Mr. Overway agreed. By adding Lot L, the amount of frontage exposure increased proportionally. Many on the Study Committee had expressed the same ~concerns. As the design had emerged and developed, he had become convinced it was possible to design a building with attractive features. Mr. Towey said Lot L would provide an opportunity for landscaping within the 15 feet available. The.structures would be 50 feet tall; however, a very tall tree or landscaping would be necessary to actually hide the facility. The landscaping element Should be considered for the setback area and the large wall abutting the adjacent property where significant landscaping could climb the wall to make a "green" wall. On two of the sides, which abutted right onto the street, landscaping would be impossible. Mr. Overway said the structure would be designed to appear more like a building than a parking structure. Mr. Towey said a sufficient amount of work had been done on the design aspect to avoid sloping floors being seen from the outside, and so the standard vertical and horizontal motifs could be developed. Through sensitivity in design and color, the structures could be made to look like a regular building. Mr.Overway said the entire ground-floor level where parking was not shown could all be used for landscaping, retail, etc. Council Member Fazzino asked to what degree Council would be involved in reviewing the design alternatives. Seattle had a parking garage in the middle of the city which detracted from its beauty, which he wanted to avoid in Palo Alto. Mr. Overway said the design would go through all of the City’s review processes, including the ARB, Historic Resources Board (HRB), Planning Commission, public meetings, etc. Staff was in possession of a design cgncept drawing which had assisted in envisioning how a building of such size might appear. Although not 3/25/97 P&S: 5 the design the structure would ultimately take, it showed how a parking structure could avoid looking like one. Mr. Towey described an overview of the design concept. The retail element helped break up the fagade, while the "L" portion was pushed back to obtain modulation of the fagade. The entries were clearly marked architecturally, breaking up the fagade and adding visual interest. The surface contained tile, showing that by use of materials and openness, the structure could be made attractive. Council Member Eakins asked whether any surface treatment would appear on the open bays. Mr. Towey said the open bays were truly open into the structure which was necessary for airflow in and out of the building. At the lower level, the scheme in conjunction with the retail was a large- scale wooden trellis which assisted in bringing plants into the setback strip. Benches and seating were possible with a small retail area. The look was very open. Mr. Overway said what appeared to be a two-story building was actually a five-story building. Mr. Towey said although a 50-foot building could not be hidden, the idea of the double-floor motif was.to simplify the number of elements on the building, i.e., rather than having I00 openings, only 50 would appear on the fagade as a means of simplifying. Council Member Fazzino thought the example appeared more like a place where a treaty would be signed than a place to park a car. He asked whether the reason retail could not be incorporated into the assessment district was that of Proposition 218. Senior Assistant City Attorney Sue Case replied no. The retail aspect could not be part of the assessment district primarily because of the Internal Revenue Service (IR$) and because of the City’s own assessment district law. The City could include the retail; however, for IRS purposes, the City would have to sel! taxable bonds to cover the private aspect. Under the City’s own regulations, the City would have to call it "surplus space" in order to conduct private enterprise. Council Member Fazzino asked about the typicalincremental cost.for a Downtown property owner basedupon typical square footages. Mr. Overway said the assessed square footage was directly related to the parking deficit. If a property owner provided al! of its 3/25/97 P&S: 6 own parking, there was no deficit and no assessed value. Some property owners could be assessed as much as $6,000 to $20,000. The amount was proportionate, to the parking deficit. Vice Mayor Andersen asked why staff had only proceeded with two structures rather than three since the City’s parking deficit was 1,500 and the proposal provided just over 700 new spaces. The staff report (CMR:183:97) had indicated proceeding with two structures was good from a cost-effective standpoint, and staff’s analysis had rated three facilities as good. Mr. Overway said staff had examined all the facilities; and while Lots P and R had been considered good, the parking gain was very expensive. Additionally, staff had examined the use of Lot 0 behind Good Earth which was always full, in high demand, and in high need; but the size and layout were such that because of certain constraints the gain would only result in a per cost basis of $41,000 per net new gain. The layouts were not very satisfac- tory either. If a structure were built ih conjunctionwith the redevelopment of properties along the site, the geometrics of the shape of the !ot would change, making it more feasible. Vice Mayor Andersen asked whether the City was at the point of not being able to add parking above what was being proposed. Mr. Overway replied no. The proposal represented a major increment and undertaking. After completion, if it were obvious more parking was needed, two options remained: i) structures in conjunction with private development, which had been seen in the past and would be seen in the future, with a combination of an adjacent.private property with a City parking ~ot were possible; and 2) if the demand for parking were truly well beyond what the increment proved to be, then the cost of providing parking on some of the other spaces, i.e., the lot across from the Post Office, would be possible. Cost was relative. If the demand were great enough, the spaces would remain available and decisions could be made about whether to bear the costs at the time. Vice Mayor Andersen asked why the price of the Teen Center had remained at $450,000. Assistant City Manager Emily Harrison said the price had been part of a negotiation undertaken between the City Manager’s Office and the Director of Utilities. An alternate argument could probably be made to have the property reappraised; however, the Utilities Department had taken the position of not wanting to make a killing on the sale, recognizing the importance of the Teen Center to the 3/25/97 P&S: 7 community. The condition of the building was not good and had not been good at the time of the appraisal. Director of Utilities Ed Mrizek said the Gas Utility had purchased the property a number of years before and no money had been made on the investment. The best scenario would be to recapture the investment and reinvest into the reserve fund to generate some revenues. Taking $i per year from the Teen Center and $i per year when used for the Centennial had not made the utility any money. To sell back to the Parking District at the $450,000 price would put the money to good use. Mr. Overway said when the property had been purchased in 1985, the Downtown Study had not been completed, which meant a property could be developed without providing parking. Currently, more restric- tions were attached to the property. Vice May~r Andersen said staff had indicated the project would be completed by the year 2000 to 2001 with i three- to four-year period prior to completion. Yet one of the components would alleviate a problem having nothing to do with parking, which was the need for public restroom facilities. He asked whether any consideration had been given to an interim response to the project while the problem was underway. Ms. Harrison said Council had made an assignment to examine a comprehensive approach to Downtown needs, including the need for restrooms. The assignment was being pursued. Currently, staff had no recommendation to return to the P&S Committee; however, staff was examining interim alternatives. Council Member Eakins asked whether the residual ground from Lot L was sufficient for a Teen Center. Mr. Overway replied yes. The idea of a Teen Center could be pursued further in the design aspects. Council Member Eakins queried a rock climbing wall for the Teen Center. Ms. Harrison said staff had proposed a rock climbing/repelling wall for the tower well site; however, liability considerations had arisen. Council Member Eakins said the skateboarding facility had been very successful. 3/25/97 P&S: 8 Ms. Harrison said the City Manager was deeply committed to finding a constructive place for teens Downtown. Great energy was being spent to find a place to relocate,~ especially given the popular nature of Downtown and the high price of property. Vice Mayor Andersen asked how Proposition 218 would impact the process, particularly with regard to the possible loss of the $2 million front-load and whether the City had some assurance of support for the assessment district. Ms. Harrison said the issue was a significant policy issue. Risks the City had never experienced would be introduced with. the assessment district. The City had always been able to depend upon the property owners within the assessment districts to provide security for the money it had invested for the formation of the district. Under Proposition 218, that was no longer possible because of the introduction of the risk of referendum and.the ambiguity as to whether tenants had a right to vote on whether the district was formed. Many legal advisors ’were still ffhding it difficult to define Proposition 218 in the day-to-day world. No concrete assurance could be given for the assessment district, the rates as part of the budget, etc. A tremendous amount of work was .necessary by legal and legislative individuals. The City faced a greater risk-in forming an assessment district because there was no security in the goodwill and good intentions of the people the City had always depended upon to ensure money was safeguarded. Vice Mayor Andersen said because of Proposition 218, Council could decide the risk was too great for the City and vote against the parking structures. Council was being asked to place at risk funds it would normally not put at risk. Ms. Harrison said that as policymakers, council would be able to have a sense of the risk the funds faced and might make the decision the risk was.not sufficient to forgo the structures. Chop Keenan, 700 Emerson Street, Chairperson of the Downtown Parking Committee (DPC), considered the proposed parking structure a public/private partnership in a very positive sense, and the City should view the project as a private project. The front-end monies would eventually be returned, if the project were successfu!, and property owners would ultimately pay the bill. The ground-up process began with Council’s go-ahead, after which the proponents would attempt to compel aesthetibs through the ARB process, ending with the need to convince the property owners, without which the project would not move forward. The fee-development approach to the project could be explored whereby the project would truly 3/25/9~P&S: 9 become a private project, ultimately paid for by the property owners. The process could take on a dynamic which literally cut the time in half, as little as 18 months. The $2 million included the architects’ design fee and attendant engineering fees, structural, electrical, mechanical, etc. The City was encouraged to request the electrical and mechanical fees be "design billed," so bills could come. in after the basic building was designed and costs captured. A design bill could be bid with a performance specification which could move forward on that basis, with the $2 million exposure reduced to $i million or less. The issue of aesthetics was large and one which the DPC had discussed at length and vigorously. In response to Vice Mayor Andersen’s question about only considering two structures, the City was moving forward on the 1,400 deficit in a meaningful fashion with the 700-plus reduction. Kathleen Gwynn, Senior Coordinating Council (SCC), 450 Bryant Street, said the SCC was not opposed to a parking structure at Lot S/L. The location was right, given the parking deficit. However, concern was expressed about the needs of the seniors in the community and the impact on the Senior Center. The new garage should actually assist seniors because of its proximity to the Senior Center but would only really be of benefit if on ground level and comfortable for seniors. The recent disruption to senior activities with the retrofit of the Senior Center, even with the cooperation of City staff, significantly decreased the use of services. With any construction process, whatever was possible with the assistance of Council and City staff should be done to minimize the disruption to senior services, especially if the process were fast-tracked. During the construction phase, the loss of current spaces at Lot S/L, which was substantially used by Senior Center clientele, was an issue. More than 50 seniors used the lot every day in addition to existing availability to street parking and the lot behind the Senior Center. Prior to construc- tion, the main issue was the architectural design of ~he Senior Center which.was historic and wel! lit. The parking facility should allow for adequate light into the Senior Center lobby and should have a gracious exterior. After construction, concern was expressed for the need to have the new lot be user-friendly, which was Critical for seniors, i.e., light, sense of light, no hidden cubbyholes, and surface level parking. As a nonprofit corporation, the Senior Center paid $3,700 for the parking assessment district, and the additional lot would place an additional burden of $8,800. Although the parking benefit wis recognized, a fee in excess of $11,500 for a parking assessment district would need to be raised from the community. 3/25/97 P&S: i0 Faith Bell, 536 Emerson Street, expressed concern about the appearance a large parking garage would have at the entrance to the City from Alma Street. Ways had been sought for making Palo Alto inviting at entry points. Parking permits should be granted on floors other than street level and into less desirable spaces because of the need for street-level parking for customers. Lot S/L had a number of advantages over Lot R which would require more ramps and was less cost efficient. Support from the community for an assessment district was questioned. The additional cost of $350 per year per space for maintenance of the new spaces was a consideration; it Was $150 more per space than the cost of a permit. Permit parking should at least cost the same as mainte- nance of the space. Better signage on available lots was encour- aged, especially Lot Q. The in-lieu parking fees should be increased to include the cost o~ building the space. Staff was asked to name the interested parties mentioned on page 7 of the staff report (CMR:183:97) in the sentence] "The level of support from interested parties in the downtown area appears to be higher for proceeding with both structures, th~n for eithe9 single~ structure." The question had not been raised in the parking structure questionnaire which had been distributed at previous workshops. Support was given for finding a new location for the Teen Center; however, concern was expressed about its inclusion in the parking structure because it was not a particularly safe place for teens. Support was given for the climbing wall, along with a suggestion for glassed-in bays which could house rotating exhibits for art work, similar to the Cultural~Center and library’s rotating exhibits. The incorporation of public restrooms was lauded, with the suggestion the openings not be into the parking facil~ty but directly onto the streets to avoid dangerous, unprotected areas. The P&S Committee was encouraged to support Lot S/L while lowering the burden on the property owners in the assessment district. Rick Ferguson, 1037 Harker, member of the Steering Committee for the Palo Alto Civic League, said a forum was scheduled for the Civic League on May 22, 1997, to discuss traffic and the Comprehen- sive Plan, the connection between parking and traffic generation, and traffic reduction. Viewed in the context of cost and benefits of public dollars invested or public lands put to use to solve a piece of the traffic problem, the Study had viewed the issue narrowly. Alternative ways to use the public dollar, private dollar, and public lands should be sought to reduce the need for parking, to change traffic patterns, and to determine whether a larger approach to viewing traffic as a whole could be found. The proposal should consider not so much a parking structure assessment district but rather a transportation assessment district as a means to frame an alternative conceptual framework for examining the 3/25/97 P&S: Ii problem. Great cities of the world were identified according to the largest buildings. Palo Alto’s largest buildings should not be "tail pipe towers." The style effect should be considered. Various estimates had been given concerning timing of the struc- ture’s completion. Comprehensive Plan discussions about traffic would be helpful prior to givfng clear policy direction about the parking structure issue. Palo Alto could become the guinea pig to test the limits of litigation and the meaning of Proposition 218, which was another reason for holding off on making a decision. Steve Gazzera, 161 University Avenue, representing Frank Galbert, owner of the property at 161 University Avenue, said 161 University Avenue was the only undeveloped commercial lot on the street. If the assessment district were formed, he queried whether the in-lieu parking fee would remain in effect, i.e.~ whether a property owner was subject to the in-lieu fee and the parking assessment fees or whether the in-lieu parking fee would be waived if the district were formed. Mr.~Overway said the in-lieu parking fee would remain in place but would be limited to certain conditions. Once a person paid the in- lieu parking fee, the parking deficit no longer existed. Payment of an in-lieu fee was like providing for a parking space. Mr. Gazzera clarified the in-lieu fee would remain in place and the ~.property would still be subject to the assessment. Mr. Overway explained how a building Downtown which had a ten-space parking requirement, after providing five spaces, would pay an in-lieu fee for the remaining five-space deficit. If the building were redeveloped and an in-lieu fee were paid for the new spaces, the deficit would not increase, but the old deficit for which the building had been paying would remain. The amount would not increase by the amount of the in-lieu fee. Lynn Chiapella, 631 Colorado Avenue, had attended a Council meeting one to two years before during which the amount on which the in-lieu parking fee was based had been reduced from $19,800 to $17,200. However, the estimated costs for the parking structures greatly exceeded what had been collected. The actual cost to build a parking structure had been grossly underestimated. The Finance Committee should be asked to change the in-lieu parking fee to a more appropriate amount. Santa Clara County (the County) had considered $20,000 the cost of N parking space for the past five years; yet Palo Alto had decreased its in-lieu fees. The error was unfair to property owners who had paid into <he fee for a long 3/25/97 P&S: 12 period of time with newer people paying less when, in fact, the cost was actually higher. A more reasonable fee would be $24,000. MOTION: Council Member Fazzino moved, seconded by Eakins, to approve the staff recommendation that Council: I) Approve, in principle, and direct staff to proceed with the necessary steps leading to (a) the construction of a multi-level parking structure (four elevated decks, one at-grade level, and two below grade levels on the Lot S/L site; (b) the construction of a multi-level parking structure (three elevated decks and one at-grade level) on the Lot R site in the Downtown Business District, and (c) the formation, of a parking assessment district to fund such a project; 2) Authorize staff to negotiate a Phase II design contract with the consultant team utilized in Phase I end, if unable to success- fully negotiate a satisfactory Phase II design contract, pursue a general solicitation of other consultants, consistent with the City’s established consultant selection procedures; 3) Direct staff to proceed with the necessary and appropriate steps to secure the following additional services: design/c6nstruction mah~gement, bond counsel, and ~financial advisor; and 4) Direct staff to proceed with the necessary and appropriate steps to identify an alternative suitable location for the Teen Center. Council Member Fazzino was pleased with the progress which had been made with respect to the parking structures. Mr. Overway explained the in-lieu parking fee that, when it had been presented to Council, several options had been discussed about how to price the fee. After examining the cost of providing a deck, a structure like Webster/Cowper, and underground parking, the costs had varied considerably. A decision had been made to use the example of a structure similar to Webster/Cowper at a cost of $19,000 plus some of the front-end financing costs to establish financing without interest. If compared to what it would really cost, Lot S/L would cost $19,900 versus the $19,000, which had been reduced because some of the up-f[ont financing costs would be removed. An apples-to-apples comparison was critical, i.e., the cost of parking on Lot R would be $34,100, which included financing and interest over 20 years. Caution was necessary to ensure comparisons were correct. Staff had underestimated the costs by 5 to I0 percent. When the structures had actually been built and the actual costs known, the in-lieu fee should be adjusted to reflect the amount. If Council directed otherwise in the interim, the amount could be adjusted on som@ other basis. ~Council Member Fazzino sai~ a careful balance needed to be struck between the need for additional parking capacity in the Downtown 3/25/97 P&S: 13 area and legitimate concerns about not encouraging more traffic and long-term parking in the Downtown area. The City was carefully balancing the situation by approving the proposal. For several years, he had. recognized the need for parking structures in the Downtown area to address the serious parking deficit. However, a parking structure was only one of several very important steps the City would need to take quickly to address the issues. Examples included a Downtown transportation coordinator to work with Downtown businesses to identify ways in which the City could discourage long-term parking in the Downtown area; formation of a shuttle service, not only for residents and customers, but also for Downtown employees along the line of Stanford Shopping Center during the holiday season with employees at the Stanford Shopping Center; and the need to address the very real impacts of Downtown traffic and parking issues on adjacent residential neighborhoods. The addition of the parking structures would help the situation in residential neighborhoods much more so than the color-coded parking system had. The design issues and the attractiveness of the garages were extremely important. He resegved the right°to vote against the proposals if not convinced the issue of design and aesthetics had been adequately addressed. An ugly or bland parking garage which defined the City’s Downtown core would not be supported. The work which had been accomplished was appreciated. The consultant and staff were very sensitive to the issues. Council Member Eakins agreed with Council Member Fazzino concerning the issue of aesthetics. Lot S/L would be a very large neighbor and should be a nice landmark which was pleasant in appearance. The structure should also be fun, with a public art emphasis on fun. Concern was expressed about the general concept. The idea of two bays which hid two floo~s was appreciated. Holes in buildings appeared more like windows which had been knocked out, which took away from the expression of the building. Rather than appearing "airy," the building would look forsaken. The building should not appear deserted or like a "tail pipe tower." Regarding the desire to maintain a period style in keeping with Downtown, imitation period styles had become a cliche. While having an acceptable appearance, innovation was limited. Not as many fun things could be done with an imitation Spanish revival look. Council should be able to view general concepts prior to the investment of too much time and effort. Vice Mayor Andersen suggested a friendly amendment to the motion. The important dynamic of the s%ccess of the Teen Center was its location in the Downtown area° MAKER AND SECONDER AGREED TO INCORPORATE INTO THE MOTION to add the words "within the Downtown area" after Teen Center. Vice Mayor Andersen thanked the Senior Center for comments concerning the parking structure and queried whether staff had given thought to dealing with the needs of the seniors during construction of the facility. Mr. Overway said staff acknowledged and recognized the need to address the issue of the seniors during construction; however, the project was only at the feasibility stage. After more was known about the project, sequencing, and whether to construct two structures at the same time, the issue would be more fully addressed by staff. Vice Mayor Andersen concurred with the desire to minimize the impact on the Senior Center. Much forewarning appeared in the staff report (CMR:183:97) concerning the maintenance costs of a restroom facility, which he saw not so much’as a concern b~t as an opportunity to involve people who had not previously had job opportunities. As the process proceeded, he encouraged staff to examine such possibilities. Council Member Eakins said when attitudes in the region changed about charging for parking, she hoped the garages built by Palo Alto could easily be retrofitted for collection of parking fees without the requirement of ripping, up the facility. Vice Mayor Andersen appreciated the comment which reflected an interest in moving permit parking within the structure in a substantial way, relieving some of the single-story facilities. Many people had an aversion to structured parking. The approach was ideal for moving permit holders out of single-floor parking facilities whenever possible. MOTION PASSED 3-0, McCown absent. Recess 9:10 p.m. to 9:19 p.m.. 3/25/97 P&S: 15 ATTACHMENT 3 Excerpt of minutes from April 1, 1997 Finance Committee meeting. Regular Meeting April i, 1997 i.Oral Communications ...................2 2.Downtown Parking Structure Feasibility Study .......2 1996-97 Midyear Progress Report on Key Plans and Impact Measures ........................24 o 19 9, 6 - 97 Midyear Financial Summary ~nd Budget A~endment Ordinance 28 o 1996-97 Midyear Capital Improvement Projects Status Matrix ............................ 31 6.~Discussion of Future Meeting Schedules and Agendas 32 Adjournment: The meeting adjourned at 10:20 p.m ......33 o Downtown Parking Structure Feasibility Study Chairperson Schneider excused herself from participating on the item because of a conflict of interest. Chief Transportation Official Marvin Overway said the staff report (CMR:183:97) contained recommendations based on the recently completed Downtown Parking Structure~Feasibility Study (the Study) regarding the provision of one or more new parking structures in the Downtown area. The Study was to have examineda broad range of issues in a general level of detail and had not been intended to provide detailed design and final resolution of specific details. Those would be appropriately left to the next phase of the design development and review, as long as a policy decision to proceed was made. The specific recommendations before the Finance Committee included: I) Development of two parking structures, one on a combination of Lots S/L across from the Senior Center with four levels above ground and two below ground, and a second structure on Lot R along Alma and High Streets, three levels above ground and one at ground, none below ground; 2) Negotiation of a design contract with Watry Design Group Architects & Engineers (Watry) toward the implementation of the contracts for the next phase; 3) Proceeding with securing of additional services; and 4) Initiating a process to locate an alternative site for the Teen Center currently located between Lots SiL. The steps, although relatively benign, were the. first in a process which would lead to a $20 million project for two major new parking structures and the formation of a Parking Assessment District to fund the structures resulting in a net gain of 729 new parking spaces in an area which .currently provided 180 parking spaces. The total cost for building the project was roughly $19.18 million, for a total net cost per new space was $26,300. The staff report identified a number of primary and secondary issues for the two structures which would simultaneously provide 729 new spaces or 909 total spaces: Number of Structures - the design and financing would proceed simultaneously, and construction would occur either sequen- tially or simultaneously. o Location of Structures - the lots would be located at Lots S/L and the other at Lot R. Appearance of Structures - the appearance dealt primarily with the overall size, massing, and types of amenities rather than specific architectural design, which had not yet been deter- mined; the inclusion of art, elevators, restrooms, security, etc., warranted some consideration an~ could either~e built into the design or not. o Implementation/Timing - staff had initially estimated a completion date of mid-2000; however, realistically one to three years longer might be necessary. The structures should be completed as quickly as possible to reduce adverse con- struction impacts, to combat escalating prices, ~and to provide additional parking as soon as possible. In order to proceed in an efficient and timely manner, the Public Works Department needed a full-service project management consultant both for the professional expertise brought to the job as well as day- to-day staffing needs. A project of such size was beyond the capability of City staff to include as another item and proceed with any kind of time efficiency. Funding - the proposal had been to form a parking assessment district, similar to the manner in which former parking projects had been handled in the past. Proposition 218 (Prop 218) had changed some aspects of assessment district financ- ing. The staff report had identified the need for up to $2 million before, the formation of an assessment district, which would generate certain risks being associated with the funds. Should an assessment district not be formed for any reason, the $2 million would not be paid back to the City. The general consensus was not to attempt to seek funding from Downtown.property owners; therefore, an attempt had been made to find ways to reduce the number to a level which put the City less at risk. o o i0. ii. In-Lieu Parking Fees .- an in-lieu parking fee had been established some time back with a current balance of $760,000, which could be used only by certain properties under certain conditions to fund up-front costs. If, however, an assessment district was not formed, the monies would have to be paid to the in-lieu parking fund, since it had been legally collected with the intent of .constructing a parking structure. Maintenance, Operations, and Enforcement Costs - increased revenues from permit sales would be collected to offset these costs. Teen Center/425 Bryant Building - in 1985, the Teen Center had been purchased by the City with Gas Fund monies and in 1993 had been appraised at $450,000. The parking assessment would include a provision whereby the Gas Fund could collect $450,000 by which ownership of the property would pass to the District. Public Restrooms - the proposed concept planned for two restroom facilities in each structure. The preliminary design in the Study had incorporated the structure in a manner Which would not adversely impact the number of possible parking spaces. The restrooms would be as self-contained and self- cleaning as possible, recognizing a certain level of mainte- nance would be required. Retail Element - the proposal provided for approximately 2,400 square feet of retail space in the structures on the corner of Lytton Avenue and’Bryant Street, which could not effectively be used for parking spaces. The structure would occupy most of Lot L, but because of the lay-out of the lot, a residual piece of land would either be left open, landscaped, or could be used for retail. The retail component, although opposed by some at the beginning of the Study, had received additional support. A retai! element could not be financed through assessments to property owners and would require a different method of financing. Public Art - the Study had identified an interest in the inclusion of public art in the structures. Discussions with the architect and the Public.Art Commission (PAC) had revealed a desire to incorporate art into the exterior design of the building rather than taking a spot and putting in a piece of art. 12.Assessments for Civic Center - in the past, City Hall had not paid assessments since the City had paid out-right for a certain number of spaces and the assessment district had been formed to pay for an additional increment of spaces. Over time, however, the City had used more spaces than had been paid for initially. Each year, an accounting was made for the excess spaces in the maintenance funds of the parking assess- ment districts, i.e., rather than paying into the assessment district, the City had paid.for maintenance of the existing parking facilities as compensation for not paying into the assessment district. Prop 218 failed to provide for such flexibility of approach; public facilities must also be assessed. If public facilities were to be part of the assessment, which staff had estimated on the $20 million project, the amount would be $25,000 for the parking deficit in City Hall. 13.Neighborhood Residential Parking - The parking structures provided a unique opportunity to seriously address and resolve the issue o.f employeeparking intrusion into residential areas. The new structures, in conjunction with Council’s direction to investigate residential parking and the changes which would occur with the movement of the Palo Alto Medical Foundation (PAMF), would provide the City with opportunities. never before realized. Council Member Wheeler asked whether staff wanted the Finance Committee to deal with financial aspects of the recommendation or to deal with a broader range of the issue. Assistant City Manager Emily Harrison said staff would appreciate any feedback the Finance Committee could PrOvide without limitation to financial issues only. Council Member Knits asked how the two parking structures would change the Downtown’area’s appearance. Mr. Overway said concern had been expressed about the size of the structure on Lots S/L. As the Project Study Committee saw some of the design ideas, it had changed from thinking the structure would be too large to thinking it might be an acceptable looking structure. The design approach would make the structure appear more like a building than a parking structure. Lots S/L was located centrally, a location~ which was more acceptable than something that large on the periphery of Downtown. The Web- ster/Cowper parking garage which was on the periphery had experi- enced problems in attempting to be filled, partially because its draw area was limited to 180 degrees rather than 360 degrees. Council Member Kniss asked whether staff anticipated less perceived traffic. Mr. Overway said closer, more available parking would help reduce some of the traffic circling and searching for parking spaces. Efforts would also be made to improve signage to direct people to parking structures rather than the smaller lots, which tended to self-fill. If people parking in residential areas were kept in the Downtown area, the impact in residential areas would be reduced significantly. However, the amount of parking provided by the~ two structures would not eliminate the entire parking deficit. To the degree that Downtown Palo Alto continued to achieve commercial success, more traffic would result. The structures were intended to reduce parking in residential areas and provide more convenient parking. Council Member Kniss asked about the parking problem five years prior as opposed to the very lucrative times Palo Alto had seen over the past few years. Mr. Overway said the questions raised by Council Member Kniss were long-term in nature and would need to be considered. Much of the parking issue which had developed over the past five years had been the increased demand for parking on evenings and weekends. The peak period had always existed during the lunch hours when it was very difficult to find parking. In response to the question about comparisons with parking five years prior, no change had been seen with respect to Civic Center or Webster/Cowper parking garage. He would be more concerned if the City had attempted to reduce the entire 1,500 to 1,’600 space deficit because of a possible down turn. On the other hand, the additional parking spaces could be seen by merchants and others as insurance against a more immediate down turn or one less severe than would otherwise occur. Council Member Kniss asked for a comparison with other cities in the area which had attempted an assessment district and whether they were successful. Mr. Overway said the Webster/Cowper and Plaza/Ramona garages had been built in the same manner, as well as all public parking structures in Palo Alto. In the California Avenue area over the past five to ten years, assessment districts had been formed to purchase a lot and to build a structure. The only difference was the size of each assessment and rule changes with Prop 218, ’some of ~lich actually favored assessment formation while others disfavored them. Council Member Rosenbaum asked why staff thought Prop 218 had increased the City’s risk, particularly the procedure by which an assessment district would be established differently than formerly. Senior Assistant City Attorney Susan Case said two new factors had been raised as a result of Prop.218, the first of which involved the fact that any assessment district could be overturned by an initiative at any time. Even in a discrete assessment district involving only a small percentage of the voters required to pay, could be overturned. The bond community, in its desire to keep the securities business going, had preliminarily stated that the Federal supremacy clause might overturn or supersede a later initiative. The second area of risk involved changing the burden of proof from those challenging the assessment through a lawsuit to the publid agency itself, which made the risk to the City more difficult to overcome. In addition, the City’s heavy risE’had been ensured by changing the way the assessments were established. No longer could a city charge an assessment to a "general benefit." Rather, the engineering report had to determine a special benefit which accrued to the particular property or group of properties being assessed. Any general assessment, e.g., a general enhance of a property which was secondary, could not be attributable for purposes of an assessment. Prop 218 had opened up many avenues through which the City could be attacked. Council Member Rosenbaum asked about the effect of Prop 218 on the City’s investment into the design funding. Ms. Case said the risk had remained the .same, since the City’s investment would have been at risk if the district failed for whatever reason prior to Prop 218. The only difference since Prop 218 was that assessment financing itself had become riskier. Council Member Rosenbaum asked about the specific requirements for obtaining permission of property owners in the establishment of a district prior to and after Prop 218 and what had become more difficult. Ms. Case said the process for establishing a district had become more difficult under Prop 218 because not only were there more burdens 0n the engineer to put~ together th~ assessment, but new procedures required a ballot to be sent to every potential assessee. Manager of Investments and Debt Jim Steele said prior to Prop 218, an assessment could be halted with a majority protest at the public hearing. Under Prop 218, a mail ballot was required. Ballots would be weighted by the share of the assessment, so to the extent the heavy assessees voted against the assessment, the City faced a risk of the assessment not passing. Council Member Rosenbaum asked whether there had been weighting on the part of the property owners prior to Prop 218. Mr. Steele replied no. The number of people appearing at the public hearing to protest the assessment would determine whether or not the assessment district could proceed. Council Member Rosenbaum clarified that prior to Prop 218, testing had involved a majority of property owners, independent of the square footage each owned. Mr. Steele replied yes. Council Member Rosenbaum asked about.the issue of who paid for the assessment if a property owner had a lease that specified all assessments were to be paid by the tenant. Mr. Steele said the issue was not clear and was an additional source of risk to the City. If the property owner paid the assessment, the property owner voted. A direct pass through lease arrangement was unclear. Council Member Wheeler asked who would run such an election. Mr. Steele said the City Clerk would run the el~ction, but the process would differ from normal elections in that it would be done by mail. Council Member Wheeler asked wh~ther any city had gone through the process of establishing an assessment district since Prop 218 had passed. Ms. Harrison replied that staff was not aware of any post-Prop 218 assessments. Council Member Wheeler asked about the timing of actually mailing out ballots, assuming the process moved beyond the Committee a~d Council stages. 4/1/97 FIN: 8 Mr. Overway said that realistically, the process of negotiating with a consultant for the design work and going through the development of the first stages of the design and design review process, one to two years or more would be required to get the City to the ballot stage. Council Member Wheeler said some of the issues surrounding Prop 218 ¯ might become resolved either in the courts or through the Legisla- ture. Ms. Harrison thought the Legislature had attempted to include clarifying language for some of the aspects of Prop 218, a key element of which was the debt clause and whether it was possible through an initiative process to void the actions of the assessment district, which she suspected would be remedied prior to the time the City actually formed its district. Council Member Wheeler asked whether the stickier regard to the ballots could be clarifiid prior proceeding. issues with to the City Ms. Harrison suspected other cities would be in the market for an assessment district prior to Palo Alto, more than likely for smaller projects, which would provide the City with some guidance. Council Member Wheeler asked whether staff planned to proceedwith a package which included both the structures if a policy decision were made that two structures were desirable for the assessment district. Ms. Harrison thought the process should be as cost-effective as possible. It did not make sense to conduct two elections at a cost of over $50,000 each. council Member Wheeler asked about the election requirement that a majority of the ballots be turned in. Ms~. Harrison said the ballot return would be based on the weighted assessment value rather than square footage. Council Member Wheeler asked how proactive a role the City could take in sending out information on the assessment. Ms. Harrison said the questionwas interesting. Since the City would also be paying into the assessment, the City would cast a ballot; but she was unsure of the answer. The City had fairly good experience with Downtown property owners doing a thorough job of 4/1/97 FIN: 9 ensuring all of the issues related to the structure were made public. Council Member Wheeler queried whether Downtown property owners would assist ~n getting all of the necessary ballots back. Ms. Harrison said experience would indicate so. Mr. Overway said having the support of the full business participants in the process was important. were in place~to ensure word got out. Chamber and Mechanfsms Ms. Case said the framers of Prop 218 had intended a determination would be made on the amount of ballots returned. People favoring an issue usually failed to go out of their way to express their favor, while people in opposition to an issue were more likely to go out of their way to express opposition. If the assessment district failed in areas as discrete as the proposed areas, assessment districts would probably not work anywhere. ~ certain number of key individuals held a large percentage of, holdings which were necessary to "buy into" the district. Mr. Overway said the individuals involved in the California Avenue assessment district had .actively informed people and had sent letters of support to Council representing at least 70 percent of the property owners in the area. Council Member Wheeler asked about the financing mechanism for construction and management of the space in Lot L, for which staff had expressed a desire to avoid responsibility. Ms. Harrison said, depending on the relative cost of constructing any retail space, that retail space would most likely have to be financed through taxable bonds as opposed to tax-exempt bonds. An alternative would be financing through the use of City reserves. The ongoing cost of management of any tenant would probably be a General Fund expense which would hopefully be offset by parking permit revenues. Since staff had no experience with managing a Downtown retail operation, professional retail management services would be necessary and might result in no net or only slight rental revenue. Council Member Wheeler asked whether staff had examined the possibility of moving the Teen Center to the Lot L location. Mr. Overway said staff had not specifically examined the possibil- ity of the Teen Center in Lot L; however, the size of the Teen 4/1/97 FIN: i0 Center in its current configuration was roughly the size of the retail area. In addition to the actual floor space area, a secondary area was open and could contain tables related to some of the retail business. The entire area was available at one or two levels. As the design proceeded, many other possibilities could be considered. Incorporation of a Teen Center had not been closely examined, but it was not inconceivable that sufficient space could be included for the Teen Center in addition to retail, or a variety of combinations. The retail aspect had been considered more as a visual and pedestrian enhancement to the building than as a desire for the City to be involved in a retail business. Visually the use had to assist in the structure. The various possibilities for uses would develop during the design process. Council Member Wheeler asked what proportion of additional spaces were permit spaces as opposed to general parking spaces. Mr. Overway said that typically, the ground surface level was entirely public parking and the upper floor~ were permitparking. In Lots S/L, the ground floor would be all public parking. In the Webster/Cowper garage, the public parking exceeded the ground level, so half of the basemeni level was also for public parking. The upper floors and basement levels were typically held for permit parking. Council Member Wheeler asked whether the additional parking largely represented permit parking. Mr. Overway replied yes. Coryn Campbell, Director, Senior Coordinating Council (SCC), 450 Bryant Street, said the SCC had not taken a position on the Downtown parking structure question but recognized the structure would need to address the broader needs of the Downtown community. The SCC hoped the proposed structure directly across from the Senior Center would benefit the senior community by ensuring more and better parking for seniors. The SCC had recently experienced a significant disruption in its service delivery at the Senior Center due to the required retrofit of the building, and City staff had assisted in ensuring minimizing the impact on clients and participants. However, a noticeable decline in usage had resulted due to the perceived difficulty of access. During the construction phase, the loss of current spaces at Lots S/L, substantially used by Senior Center clientele, was an issue.. More than 50 seniors used the lot every day in addition to existing street parking and the lot behind the Senior C~nter. Prior to construction, consider- ation should be given to conformance with the architectural design 4/1/97 FIN: II of the Senior Center. The parking facility should allow for adequate light into the SCC lobby and have a gracious exterior. After construction, the new lot should be userTfriendly, which was critical for seniors, i.e., adequate lighting, a sense of openness, surface level parking, etc. As a nonprofit corporation, the SCC paid $3,700 for parking assessments and the additional lot would place an additional burden of $8,800. Although the parking benefit was recognized, an assessment in excess of $11,500 would require fundraising from the community. Council Member Kniss asked about the need for ground-floor parking for seniors. Ms. Campbell said asking seniors to enter elevators or climb stairs would minimize willingness to use the structure. Seniors wanted close access, especially if troubled with mobility problems; using elevators and stairs would be difficult. Council Member Kniss thought reserving the 4ntire ground floor for seniors might cause a problem. Ms. Campbell said her request had not been to reserve the entire ground floor for seniors, but for seniors to have access to the ground floor. Mr. Overway’s comment about having the ground floor reserved for public parking would meet the requirement. Natalie Wells, representing the Public Arts Commission (PAC)., 3259 Alma Street, said three commissioners had attended all of the public meetings regarding the parking structure. Staff and Watry were thanked for hearing the PAC’s many comments and suggestions. Reference had been made to cheap art. In dealing with projects of such importance, cost should not be a major factor. The commitment and intent to incorporate art as part of the design was important. One of the City’s most pleasant examples of low-cost art could be found on Alma Street at the Utilities substation. Examples from around the country of parking structures which incorporated creative art were offered. Dan Lorimer, President, Downtown North Neighborhood Association, 465 Hawthorne Avenue, said for the staff report (CMR:183:97) to give Comprehensive Plan Transportation Policy i0: "Reduce employee or commuter parking in residential neighborhoods" as the major rationale for building the parking structures was extremely disingenuous. The members of the .Project Study Committee (PSC) included three major developers, one merchant, and one hotel owner, with no private citizen or representative from any neighborhood. The PSC had been of, by, and for developers and merchants. Not 4/1/97 FIN: 12 only had no effort ~een made to solicit neighborhood views, but in the March 24, 1997, meeting, the only problems discussed had been problems of merchants and building owners. A survey recently completed of Downtown North revealed that more people thought the structures would make the parking situation in the neighborhood worse, which seemed incongruous. Although additional parking Downtown would seem to discourage parking in the neighborhood, past experience indicated otherwise. Parking was provided for customer convenience. Merchants not forced to provide parking or parking permits for employees, would not. More parking structures would mean more intense use of the commercial district which required more employees, would result in no more free parking than was currently available, and would inevitably result in additional parking inthe neighborhood. Solutions should include a require- ment for employers to provide parking for all employees. Areas outside neighborhoods were necessary for employees to place vehicles every day. .Permits should have to be purchased or actual space provided by employers. More parking should be required for high-intensity uses than low-intensity uses.: The amount of parking required for a building could not continue to be calculated with a simple per-square-foot formula which disregarded the use of the space. The worst example of such planning was Lulu’s Restaurant. Palo Alto Orthopedic had been a very low intensity use and the house on Kipling had been even lower. Lulu’s was the highest intensity imaginable for the location, yet the parking requirements remained the same for the different uses. Use changes should not be permitted which resulted in a greater parking load if additional parking reflective of the use was not provided. In-lieu fees failed to solve the problem and only provided developers with an out. Higher intensity and density resulted in more cars requiring more parking and traffic. Fees only provided for more spaces for customers. The employee parking situation became worse, and nothing was being done about traffic. Rather than parking assessments, the City’s fees should consider transportation assessments allocated to any legitimatesolution to the problems created.by development. Phyllis Munsey, 535 Ramona Street, spoke as a property owner and member of the Chamber’s Parking Committee working on the issue. The Finance Committee was urged to approve the staff recommendation and to speed the process along. The continued vitality of Downtown could change, and more parking was necessary to keep the area vital. Neighborhoods would benefit by having permit spaces within the structures moving employeesoff the streets. Council Member Wheeler ~sked for .clarification about prior discussions with the Finance Committee and Council during which the Chamber’s Parking Committee had clearly stated its intent to make a concerted effort, when the spaces were available and designated as permit parking to attempt a sales job with its constituency, to ensure the permits were actually acquired and used. Ms. Munsey said a long waiting list existed for various permit spaces. The permits would be purchased instantly once available. Michael Griffin, Secretary, Downtown North Neighborhood Associa- tion, 344 Poe Street, provided the Finance Committee with a copy of an article by Yoriko Kishimoto entitled "Gridlock in paradise: Congested roads, tight parking, speeding traffic demand comprehen-. sive solution" from the November 27, 1996, Palo Alto Weekly (copy on file in City Clerk’s Office). The article urged Counci! to seek alternatives to large parking structures, e.g., incentives to employees to seek alternative transportation, etc. Walter Harrington] 1337 Alma Street, spoke as a citizen and major property owner in Downtown Palo Alto, comiending the efforts by major property owners, City staff, and Watry to address the increasing parking problem. In view of Prop 218, an additional item was necessary, i.e., a mechanism whereby to adjust substantial inequality in an assessment, a method which had existed since the inception of parking districts until 1987. Mr. Lorimer’s comments about low versus high intensity uses was an important issue to consider. ~ Parking consultants would agree that higher intensity uses required eight spaces per 1,000 Square feet. Other uses would require much less. The Finance Committee and Council were urged to establish a mechanism to address a substantial inequity, i.e., allow a way for an individual property, where the assessment parking required was more than 125 percent of the parking required under the Zoning Code for the same use outside the district, to be brought before Council for a decision. Prop 218 -should not be viewed as a barrier but an opportunity to work with affected property owners. Support would come from property owners who felt fairly treated and received a specific benefit. The goal should not be to make the assessment easy to apply, as it had been in the past, but to assess the cost in proportion to the benefit. Not only would such a change comply with Prop 218, it would produce a true public/private partnership. Although according to the Palo Alto Municipal Code (PAMC) his building should pay for 75 spaces, he was required to pay for 200. Council Member Kniss had been persuaded by the shortage of parking spaces Downtown, as well as Mr. Overway’s comments about circling traffic. Controlling traffic which seemed to have no place to go 4/1/97 FIN: 14 would be a concern. The staff report (CMR:183:97) appeared a valid manner in which to proceed. Council Member Wheeler went through each issue to seek questions or comments from the Finance Committee. The vast majority of new spaces to be added would be for permit parking, with the goal of getting people out of neighborhoods. However, the cars circling in the Downtown area were not possible permit holders, but potential customers. Council Member Kniss thought permit parking could be used by the public at night, thereby reducing the number of circling cars. Mr. Overway confirmed that after 5:00 p.m. on any weekday and all weekends the permit spaces were available to anyone. Council Member Wheeler said the hours for parking had alleviated her concern. An aggressive effort which was as financially feasible as possible should be taken to mov~ employeeparking into Downtown structures where it belonged. The aspect of the proposal most troubling involved the appearance of the parking structures. Palo Alto’s Downtown had become very attractive, and the community depended on Council to keep it that way. The senior housing on Everett Street was a good example of Planning Commission efforts which had insisted on certain amenities and which had turned out quite attractive, albeit costly. The same result was possible with the parking structures; however, the benefit was worth the extra cost. Ms. Harrison said Council Member Wheeler was .correct. Much discussion had been held on the issue, and staff knew the struc- tures had to be something the entire City could be proud of. Council Member Wheeler said the developers and designers of private spaces, even the newest additions, had taken great care to build attractive structures which added to the ambiance of-Downtown. The desire to be financially prudent should not be the undoing of such work. On the other hand, a method to incorporate public art, make the buildings attractive without becoming monuments, and to stay financially prudent needed to be found. Having seen the parking structures in the .slide show mentioned by Ms. Wells, she was aware of how public art could be used in a very inexpensive way to make people feel good about going into what could be an otherwise unattractive building. Some of the hesitancy about going into parking structures could be ameliorated with the expenditure of just a few dollars to incorporate something in the construction 4/1/97 FIN: i5 which would make people smile upon entry. Issue~ 4, regarding implementation and timing, was a sensible way to proceed. Council Membe~ Kn±ss asked about the comment on page 9 of the staff report (CMR:193:97), "This would require that the City make a commitment to allocate approximately $2,000,000 from~the General Fund, for an interim period of time." Mr. Overway said a certain amount of money was necessary to execute the design work and prepare for the formation of the assessment district. Formation of an assessment district required a fairly certain cost estimate. Trying to get more funding after the fact because the estimate was insufficient was virtually impossible, so having a solid cost estimate up. front was important. The $2 million estimate had been based on completing i00 percent of the design work, bid specifications, engineering estimates, etc., which would be highly accurate. The amount also included the project management aspect of the design work and some of the bond counsel and financial advisory costs. Staff had reeiamined the figure more closely with the intent of coming up with an alternate strategy which would allow the project to move forward with a slightly different approach and a reduction in the cost. Staff thought the cost could be reduced to $I million or less. Staff would return with a more specific number which could then be budgeted, staff, therefore, would seek to find an amount which represented the minimum required to proceed comfortably to form an assessment district and thought that amount would be less than $i million. Council Member Kniss expressed concern about a cost of $2 million, which appeared excessive in light of the evening’s discussion. Council Member Rosenbaum sought additional assurances prior to a ballot vote that would indicate an assessment district could actually be formed. He asked whether an indication of support for the project could be secured from the 250 properties prior to the City putting up any money, especially since .a good estimate of how much would be required had been obtained. The issue of whether the tenants would have to pay should-also be determined and, if so, approval from tenants should also be obtained. Ms. Harrison thought Council Member Rosenbaum’s suggestion was excellent. Staff could use a survey or questionnaire to determine interest, working with the Chamber and the parking committee. Council Member Rosenbaum said Mr. Overway had mentioned letters from a significant percentage of people in the California Avenue district who had indicated support of the parking structure there. Due to diligence on the City’s part in obtaining the same kind of indication would be pruden[. Mr. Overway said the property owners and tenants would merely be giving their preferences based on the information available at the time, without giving a solid commitment. Ms. Harrison said the City should be very cautious about providing actual estimates of the cost of the assessment because such estimates had a way of becoming seen as commitments later. Council Member Rosenbaum said the information was already available in the consultant’s report. Ms. Case thought with regard to questions raised concerning specific assessment and use of the property, the determination had been made based on how one characterized the use, i.e., commercial or residential, which made a radical difference as to the parking requirement. The requirement would probably’not .change because the City’s Planning Department would probably examine the breakdown in the same way. Notwithstanding Mr. -Harrington’s particular issue, the point was well taken that staff should examine the way the City had allocated parking deficits. Under Prop 218, the issue should be revisited to ensure the City was not violating the law inadver- tently. Mr. Overway said the change in 1987 involved moving to a rate based on four spaces per 1,000 square feet, which was a weighted blended rate. When assessment districts had been established for Califor- nia Avenue, an opportunity had been made for certain property owners to seek alteration to the particular assessment from Council. Alterations had been made in some cases and not in others. One such instance involved a theater on California Avenu~ which had argued a hardship case, but the decision had been not to change the share. However, some residential properties had been exempted. A process had been available at the time. The downside was that everything not paid would be pushed over to others who had to pay. Some balance had to be given. Council Member Rosenbaum thought the theater had felt the unfair parking assessment had lead to its demise. Mr. Overway agreed. Council Member Rosenbaum said the other significant use which had been raised involved restaurants, asking whether’ it posed a significant difference in use. 4/1/97 FIN: 17 Ms. Case said staff wanted to ensure the regulations in place still fit the needs and requirements under Prop 218. Council Membe~ Rosenbaum asked whether the issues would be examined by staff prior to its return to Council. Ms. Harrison thought the bond counsel would be used~to work on the project because of their great experience in the City’s assessment formula. Mr. Overway said the issue of surveying the Downtown property owners was one which should be done prior to returning to Council. The issue of formulating a review and better balance, if necessary, for the assessment formula would be a longer-term decision. When the time came to do an assessment, staff hoped to have come up with a reasonable, appropriate, and fair method. Ms. Case said any change might involve a change in the Zoning Ordinance which would require Planning Cbmmission and" Council review. Council Member Wheeler asked whether staff had any concern about the relationship between the blended rate structure and Prop 218 requirements regarding paying for what was a direct service. Ms. Harrison said Prop 218 only affected new assessment. assessment would be invalidated. Existing Council Member Wheeler asked whether the blended rate could be defended with Prop 218. Ms. Harrison said the question was very good and went to the issue of whether any property owner would be allowed to pay less than the value the property represented to the assessment district. Council Member Wheeler summarized that the Finance Committee liked the concept of reducing the $2 million risk factor and concurred with Council Member Rosenbaum’s suggestionfor an informal survey of property owners in the assessment district to ascertain initial levels of support. Council Member Rosenbaum said Ms. Chiapella’s point about the $17,848 in-lieu parking fee, for which he had personally made a motion, had been made based oninformation provided by staff at that time. Staff had suggegted a figure between $17,000 to $20,000 which was the correct cost if one considered the total cost without subtracting out the existing ground-level parking. He asked 4/1/97 FIN: 18 whether the figures had been computed in a different manner when staff had provided the information previously. Mr. Overway said the figure staff had provided Council at the time had been based on several different alternatives. Staff had selected the Webster/Cowper-type garage since it had a fairly good- sized area, parking both above and below ground, etc. It was necessary to make an apples-to-apples comparison, i.e., either to :include financing costs or not, to be per net new stall or stalls, etc. The $17,848 represented the cost per net new stall. At the time, staff had indicated the figure was based on the best information available. When a structure was actually built and better information was available, the figure would be adjusted. Based on the current information and removing the retail component from Lots S/L, the older cost estimate would have only been 5 to I0 percent below the new cost estimate. The intent at the time had not been to overestimate, but~ to be fair. Coming within 5 to i0 percent did not seem inappropriate. Council Member Rosenbaum said based on the numbers, Mr. Overway had not suggested the in-lieu parking fee should be changed. Mr. Overway thought a structure could be built based on the costs given. Staff recommended maintaining the fee at its current rate until after the structures had been built to determine the true costs, after which time the fee amount could be changed. Council Member Rosenbaum thought because less had been charged for in-lieu parking than the actual cost, Ms. Chiapella’s point that some costs would be incurred to the General Fund would in fact be an additional cost to the remaining property owners not properly compensated. Mr. Overway said Council Member Rosenbaum was correct. Council Member Wheeler said given the information Watry had compiled, if the City waited until the structures were built to reevaluate the numbers used for the in-lieu fee, another site for another parking structure would not be seen in the future. Mr. Overway said the money which had been collected to date would actually be used to reduce the amount of the financing. During the 20 years of the bond sale, periodically individuals would qualify for an in-lieu fee. The suggestion was that each year, the annua! assessment would be reduced.by the amount and applied to a reduced assessment, i.e., everyone shared in the amount. Beyond the 20 years, a decision would need to be made as to whether or not to maintain an in-lieu fee. If Downtown continued to need the fee, in conjunction with private development adjacent to the current parking lots, some joint use of the funds would make the situation feasible. The City had bought into parking at Plaza Ramona, which had been unexpected, but was an example of how in-lieu fees after the 20 years could be used. Ms. Harrison said the structure which had been used in the past had been for the maintenance and assessment of the districts to be recouped through the permit fees, as distinguished from the parking enforcement costs. The program had been established for the overall benefit of the Downtown area, not as a cost-recovery program. Council Member Kniss said the City had done a great deal with the parking garage at City Hall in terms of better lighting, signage, painting, etc.; however, comments continued to be expressed about what occurred in the stairwells, etc. Restrooms would probably need to be cleaned more than once a day and ~ere places s~e would hang-out and others would avoid, especially at night. She queried how the City could be absolutely sure complaints about the structure would not be heard five years hence. Ms. Harrison said safety and the appearance of safety~were issues on which staff continued to work with the Downtown Parking Committee (DPC). The appearance of safety was a critical issue in actually providing a safe environment. The DPC had brought to staff’s attention that the improvements made in the Civic Center structure had bred the need for more in the Webster/Cowper garage. Having learned from both the Webster/Cowper and Civic Center garages, s[aff would know the level of maintenance and upkeep from the start. Council Member Kniss asked whether the restrooms would be kept open 24 hours. Public Works Director Glenn Roberts said the issue would need to be considered; as yet, no decision had been made. As far as restroom maintenance, staff’intended to use a design with a high standard of durability and maintainability, e.g., the kind of technology San Francisco used with its self-cleaning facilities, etc. If that was not possible, staff would consider contract maintenance on a multi- time per-day basis. The preliminary cost estimates assumed a high- level of maintenance. Mr. Overway said the other eiement involved location, access doors, etc. Having restrooms located in the basement or behind something, 4/1/97 FIN: 20 was the wrong direction to proceed. Restrooms which were open and seen from the street resulted in a safer and self-policing environment. Council Member Kniss said the issue was sensitive. The garage restrooms would be the most public restrooms in the entire Downtown area. The City should have a plan and be very aware of the ramifications of the facility. Council Member Wheeler askedfor comments about Issue 8: Teen Center/425 Bryant Building and staff’s request for Council to direct staff to seek an alternate site. Council Member Kniss wanted more information about the Teen Center, i.e., current classes, etc., and preferred to reserve comments until more information was obtained. Director of Community Services Paul Thiltgen said the Teen Center primarily functioned as a weekend activity bn Friday andSaturday nights, during which time the Center was packed, especially when bands played. Generally, no problems occurred. Only one night had required a closure and that was because of over-crowding. In general, no problems had been seen. The advisory group had tried hard to make the Center successfui, which was as large as it could get based on the current size. Teens wanted to be in a Downtown location. Council Member Kniss asked whether finding a l~cation similar to the current location would be difficult. Mr. Thiltgen replied yes. Council Member ~niss clarified staff merely wanted direction to seek an alternate location. Mr. Thiltgen replied yes. Council Member Kniss stated she would support such a search. Council Member Rosenbaum agreed the City should seek a new location; however, the cost for the current Teen Center had been relatively small because of the availability of the building. The staff report (CMR:183:97) had suggested using the corner in the Lots S/L location for the Teeh Center at a cost of $700,000. Council would need to determine whether the level of teen use justified the expense. 4/1/97 FIN: 21 Ms. Harrison said when the issue had been discussed at the Policy and Services Committee, the staff recommendation had been amended to ensure staff sought a location within the Downtown area. Although $760,.000 seemed very expensive for a Teen Center, if land costs were added to construction costs of a Teen Center Downtown, the cost would be quite high. Council Member Wheeler said the element of a Downtown location was very important to the teens. If staff could not realistically seek a Downtown location, the promise should not be held out. Because of the cost considerations, she had been intrigued by the potential use of part or all of the area in the garage. Council Member Kniss thought the current building was relatively small. Mr. Overway said the building was approximately 2,500 square feet, the same size as the potential retail space. Council Member Wheeler asked whether staff had received any feedback or reaction concerning the sale of the current building to the assessment district at the 1993 appraised value. Ms. Harrison said tw~ parties would be affected, the property owners who would reimburse the Gas Fund through the assessments and the Gas Fund. The reaction had been generally positive. The Gas Fund had purchased the property only as steward of the property until such time as it could be used for parking. At the time of purchase a number of years before, the Gas Fund had been replete with reserve money and the General Fund had not been as flush, which was why the Gas Fund had been the purchaser.The purchase had never been intended as an investment property. Council Member wheeler asked whether Ms. Harrison’s response was why an updated appraisal had not been obtained. Ms. Harrison said a compromise had been reached. Council Member Wheeler understood staff’s concern about running and managing the retail element. The site might be the only realistic one for the relocation of the Teen Center. If other potential economically feasible locations for the Teen Center were found in the Downtown area, leaving the site open for a retail use would be supported. She agreed with staff’s concern about getting the City involved in the retail.business which was best left to the private sector. 4/1/97 FIN: 22 Council Member Rosenbaum had been surprised at the cost; $300 per square foot was probably more than a retailer could afford to pay and make any moneY. Staff could easily check with others in the industry to determine whether the amount made sense, which might resolve the question. Council Member Kniss said if a location for the Teen Center could be found elsewhere, the idea of a small park in the location was encouraged. Respites in the Downtown area, especially adjacent to a new parking structure, was not a bad idea. Visual relief and a chance to sit in the Downtown area would be desirable. The seniors could also go across to the Senior Center; however, a park was a possibility. She asked about the cost. Ms. Harrison said page 14 of the staff report (CMR:183:97) had indicated a cost of $80,000 for a minipark. Council Member Kniss asked whether the $80,000 was just a onetime .cost. " Ms. Harrison replied yes. In the same way, one should not assume the Teen Center was the same cost to develop as retail. The most expensive construction alternative would probably be retail, and second the Teen Center, with the minipark as the least expensive option from a construction standpoint. Each would involve different levels of ongoing maintenance costs. Mr. Overway said if a building were not built for some particular purpose, landscaping in the area would be necessary. The minipark concept was taking what would naturally be a landscaping area theme and adding amenities to make it more of a place to rest or sit. Council Member Kniss thought the area was a good one for staff to consider for the inexpensive work of art. Council Member Wheeler thought the art already had another spot. A minipark at the parking structure location would rank third on her list. Although in agreement with Council Member Kniss on the basic premise and concept of having places of respite throughout Downtown instead of concrete, another park was already located immediately across the street. Better use could be made of the corner. The green space would be more valuable at a location which was currently without green. The Finance Committee had been supportive of public art in the" location. Issues 12 and 13 were informational only, requiripg no policy decisions. 4/1/97 FIN: 23 MOTION: Council Member Kniss moved, seconded by Rosenbaum, that the Finance Committee recommend that Council: i) Approve, in principle, and direct staff to proceed with the necessary steps leading to (a) the construct±on of a multilevel parking structure (four elevated decks, one at-grade level, and two below grade levels on the Lots S/L site; (b) the construction of a multi-level parking structure (three elevated decks and one at-grade level) on the Lot R site in the Downtown Business District, and © the formation of a parking assessment district to fund such a project; 2) Authorize staff to negotiate a .Phase II design contract with the consultant team utilized in Phase I and, if unable to successfully negotiate a satisfactory Phase II design contract, pursue a general solicita- tion of other consultants, consistent with the City’s established consultant selection procedures; 3) Direct staff to proceed with the necessary and appropriate steps to secure the following additional services: design/construction management, bond counsel, and financial advisor services; and 4) Direct staff to proceed with the necessary and appropriate steps to identify an alternative suitable location for the Teen Center. Council Member Kniss said the Finance Committee had made its concerns clear to staff, some of which were quite concise. MOTION PASSED 3-0, Schneider ~not participating." Council Member Wheeler expressed thanks to the team which had worked on the item. The study had been extremely readable and clear, enabling the policy makers to make clear choices and give better direction. April 14, 1997 City of Palo Alto Departmo zt of Planning and Cdrnm. }milajEnvironment ATTACHMENT Transportation Division Dear Property Owner: The City of Palo Alto is currently considering a proposed plan to construct two new parking structures in the downtown area. These proposed structures are an integral part of the 13-point comprehensive downtown parking program developed by the Chamber Parking Committee and City staff, and adopted by the City Council. The program covers a broad range of parking supply and demand management strategies. The City Council has asked for an informal survey of property owners to assess your level of interest and support for the proposal to construct and fund these two new parking structures. The proposed project, as currently envisioned, is briefly described in the enclosed information. Also, included is a table listing your specific property (ies) and a sample of what an estimated annual assessment could be for the two parking structures, as currently envisioned. After you have reviewed this information, the. City Council’ would very much appreciate it if you would complete the enclosed pre-addressed postcard and mail it by April 30th. It is important to respond, whether you support or do not support the construction and funding of these proposed structures. Your response is an informal indication of support or lack of support for the proposal as presently envisioned, and is not a firm commitment to a final project. You will be given an opportunity, at a later time, to formally express your support or opposition to the proposed .parking structures, once additional design work has been completed and more precise cost information is available. The present survey results will be used to help the City Council make a decision as to whether or not to proceed further with the design of the projects. If you would like more information, copies of the Downtown Parkin_ . H _ ~tudy - Final Report (January 16, 1997) and a related staff.report to the City Council (CMR: 183:97; March 24, 1997) are available from the Transportation Division, sixth floor, Civic Center, 250 Hamilton Avenue. If you would like to talk with someone, please feel free to call Ashok Aggarwal,’City Traffic Engineer, at (415) 329-2575. Thank you for your prompt response. Sincerely, Susan Frank Executive Director Chamber of Commerce Charle~J¯ Keenan, Chair, Parking Committee Chamber of Commerce Marvin Overway Chief Transportation Official City of Palo Alto REMINDER:IT IS IMPORTANT AND WILL BE VERY HELPFUL IF YOU RESPOND TO THIS SURVEY (BY APRIL 30TH), WHETHER OR NOT YOU SUPPORT THIS PROPOSED PROJECT AS PRESENTLY ENVISIONED. 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 415.329.2520 415.329.2299 Fax Proposed New Downtown Parking Structures - Property Owner Survey Please indicate whether or not you support the proposal to design, build and fund two new parking structures (one on Lot R and one on Lots S/L), recognizing that if they are built, theywill be funded through an assessment district, similar to what has occur with rezpect to existing parking facilities. [] I support the proposal to build and fund two new parking structures. [] I do not support the proposal to build and fund two new parking structures. General comments (optional): PLEASE MAIL POSTCARD BY APRIL 30, 1997 & THANK YOU FOR RESPONDING SUMMARY INFORMATION FROM FEASIBILITY STUDY AND DESCRIPTION OF THE PROPOSED PROJECT Based upon policies established as part of the Downtown Study (1986) and a comprehensive plan for downtown parking approved in 1994, Council established a Capital Improvement. Program (No. 19530) to study the feasibility of building a new parking structure(s) on one or more existing surface parking lots in the University Avenue Parking Assessment District. -A consultant was hired, a Project Study Committee provided guidance, and the study has now been completed. The scope of the study addressed parking need, site analysis, schematic design options, financial analysis, and a preliminary environmental assessment. Based upon the information developed during the feasibility study, including review ¯ comments by the Planning Commission and Architectural Review Board, plus a public workshop early during the process and a public meeting toward the conclusion of the study, the primary conclusions and recommendations are as follows: There is a need .for additional parking in the downtown area and there is support for the City to proceed with the provision of additional parking. While the amount of parking needed may vary according to one’s perspective of the problem, an amount in the order of 500 to 800 additional spaces, seems to be an appropriate next increment. Co The most suitable locations for one ormore parking structures (based upon need, site characteristics, cost, and functional efficiency) are Lot R on the western edge of the downtown and Lots S/L in the central portion of the downtovCn. Lot O is not a realistic option, nor is a combination of Lots R and P. All other surface lots are also unsuitable for a stand alone parking structure. This does not preclude the possibility that at some time in the future one or more of these lots may have some potential, in conjunction with the redevelopment of adjacent private property. do The recommendation is to build two parking structures, one on Lot R and one on Lots S/L. The parking structure on Loi R would be one surface level, three elevated levels and no below-grade level, for a total of four levels. This would provide a total of 210 spaces, or 139 additional spaces beyond the 71 spaces that presently exist. The parking structure on Lots S/L would be one surface level, four elevated levels, and two below-grade levels, for a total of seven levels. This would provide a total of 699 spaces, or 590 additional spaces beyond the 109 spaces that presently exist. The total net gain with both structures would be 729 spaces. The spaces will be a cbmbinafion of both short-term customer parking and long-term permit parking for employees. e.The recommendation includes incorporation of public restrooms into each of the proposed .structures. Page 1 of 7 f.The estimated 1996 cost (design, construction, financing and other related costs) to build these two new parking structures is as follows: 1996 COSTS BASED UPON FEASIBILITY STUDY Lot R Lats~L~ ~ Total Co~t $4.7 million $14.4 million $19.1 million Cost/stall $ 22,600 $20,700 $~21,100 Cost/added stall $ 34,100 $ 24,500 $ 26,300 The above cos .tS are in 1996 dollars. Depending upon when actual construction is started on each of the two proposed parking structures, these costs are expected to increase, due to inflation, by about 3 percent per year, or a total of 10 to 12percent over a 3 to 4 year period. Funding for these proposed parking structures is anticipated to come from the formation of a new Parking Assessment District, as has been the case with all existing public .parking structures, as well a~ surface parking’lots, in the downtown area. Bonds will be sold to fund the design and construction with annual repayment (debt service) financed through assessments on downtown properties over an extended period of time (20 years). The amount of the annual assessment to each individual property is in direct proportion to the parking deficiency attributable to each individual property (e.g. a property that provides all of its required parking pays no assessment). The economic analysis indicates that the bonding capacity of the District appears to be substantially more than adequate to support the construction of both parking structures. The proposed parking structures would result in the following additional annual assessments (preliminary estimates) to downtown properties over a period of 20 years, based on 1996 costs: ASSESSMENTS BASED UPON 1996 COSTS Lot R Lots S/L Both R & S/L Current Rate $ 0.21 per assessed square foot per year $ 0.59 per assessed square foot per year $ 0.80 per assessed square foot per year $ 0.34 per assessed square foot per year Again, depending upon when the construction is actually started, these assessments would be expected to increase, due to inflation, by .about 3 percent per year, or a totalof 10 to 12 percent over a 3 to 4 year period. Page 2 of 7 In summary, there is a reco .gnized need for more public parking, the most appropriate sites are Lot R and Lots S/L, there is support for parking structures on these two sites, the costs, although high, are supportable by downtown owners/businesses, and there is a strong imperative to proceed with a commitment to both structures simultaneously and in the most expeditious manner practical (planning, design, and financing); recognizing that the actual construction may occur sequentially. At this time, it is premature to specify which structure might be built first. That decision can best be made toward the end of the design stage, when it needs to be made and when more information is readily available. PROPOSED GARAGE - LOTS S./L (19965) 7 Levels (4 elevated, 1 at-grade, 2 below) 699 total spaces (590 additional spaces) $14.1 million total cost to design, construct and finance $20,700 total cost per stall. $24,500 total cost per added stall $0.59 per assessed square foot per year Patldng Asse~ment D~trict Pa~ing ~adlities PROPOSED GARAGE - LOT R (19965) 4 levels (3 elevated, 1 at-Fade, 0 below) 210 total spaces (139 additional spaces) $4.7 million total cost to design, construct and finance "$22,600 total cost per stall $34,100 total cost per added stall $0.21 per assessed square foot per year Page 3 of 7 ESTIMA TED ANNUAL ASSESSMENTS FOR INDIVIDUAL PROPERTIES The table presented in the following pages is an estimate of the annual assessment for each property in the downtown parking assessment district based-upon the current cost estimate (1996 dollars) developed as part of the feasibility study. As the project goes through design development and more refined cost estimates become available, as the basis for formation of the assessment district is developed, and as the possible, effects of inflation come into play, the numbers will likey change (increase rather than decrease).. The numbers do, however, provide a reasonable indication of what the assessment would be for each individual property,’ based upon information available at the present time. For each property (parcel number and address), the information presented includes: (a) the current assessed square footage, . (b) the actual 1996 total assessment, (c) the estimated assessment for the.,proposed structure on Lot R, and (d) the estimated assessment for the proposed structure on Lots S/L. .. The total estimated assessment for the proposed two new parking structures (Lot R and Lots. S/L) can be determined by adding the two individual assessments. The actual 1996 assessment that you are currently paying for previous bond sales to fund some of the existing parking structures, should be the same as what appears on your tax bill and is provided as a point of reference and comparison to the new assessments associated with the proposed new garages. The existing assessment will diminish somewhat in 2000 and terminate fully in 2006. It is anticipated that any new assessments would be in place for a period of 20 years. EXAMPLE:~rcel~120-03-023 " ". For the current year (1996), the assessed square footage is i227 square feet and the annual assessment is $411. This amount should be similar to what appeared on your tax bill for this property. If the proposed two new parking structures were built today, the assessment for this specific parcel would increase by a total of $983 ($254 for the Lot R structure and $729 for the Lots S/L structure). The new assessment ($983) would continue for a period of 20 years, where as the existing assessment ($411) will diminish somewhat in 2000 and terminate in 2006. Page 4 of 7 ..... ~ ~ ZZZZ ZZZZ Z ZZZZZZZ R8~80~8~0~8 ~ ~ooooo~ zz~zzzz~zzzooo~== == == oo oooo o o ~d~dNd~d w 00~ ~ZZZZ___ZZZZZ~DDDDIIIDDDDD 99 ooooooooooooo ~0000~0~’~0~00000 ~0 ZZZZ DDDD ~0~~0~ ~~oooo~ zzz DDDO0= o ooooo~ Z~Z ZZ ZZ Z ZZZ Z~ZZZ~Z ~ ~0000000 0<<<<<~0bbbbbbbbzzzzz~°~oooooo ~ ~ ~ DESIGN GROUP. ARCHITECTS & ENGINEERS I~lay 1, 1997. Mr. Ashok Aggarawall City of Palo Alto P.O. Box 10250 Ralo Alto, CA 94303 ¯ ATTACHMENT 5 RE,:Palo Alto Parking Structure WDG#9533.312 ¯ : Dear Ashok: ’ Per our meeting, We offer the following preliminary anaty,dis of fees for this project with the.undb.rstanding that we are not yet.negotiating a o.ntract. The intent of this analysis is to ass)st:you Jndetermining th’e d£sign service fe~ dollars needed.to be budget,ed by the City prior to forming the assessment .disfrict. ’ ’ A typidal design.project i.s b~oken ir~to differ.ent phases which take the project’s design to increasing levels of completion, ending with documents that are ready to be bid to gefleral contractor’s and be used for construction, These phases ’are: CondePtua.l Design, Schematid Design, Desig .n Deve.lopment and, Construistion Documents. Subsequent phases incl.ude Bidding and Plan Check and Construction Adm.i.ni.stra{ion Services. The fol.lowing,is an outlineof percen}agg of completeness of drawings for each phase ~nd .typical fee percentages.of the total design services fee for each phase. These percentages are .projeoted against the $;1.3 milli0n of design fees currently outlined in the feasibility study. Please ndte that these are for relative cbmparison only as a definitive, scope,of w.ork a.nd.contra.ct.have not.yet been negotiated. Phase ¯ Conceptual ¯Design ,Schematic Ddsig6 Design Developmer~t :Construction Doc .uments Biddino and Plan Check Construction Administration ¯Total % Complete ¯ of Dra@in9s 5%. 25% 6O% 100% 100% % of Tota! Design Fee ’Design Fee "3.% ’~Z.~R ~ $39,000 ~ittg/I ¯2’0, %$260,000--) -40 %$520,000 2’% " .$26,000 20 %$260,000.~ oo %$~,3oo,ooo Main Of|ice: 1500 Fa.ghion Iglan’~ t~oul~vard,:Suffe 200, S-’,n Marco, CA ~4404 8acr.ameuto Oflice: 7015 blomin.gsid.¢ [h’ivc, .Leomis, CA 95650 Tel:415,349.1546 Fax:415-349o1384 ’tel:916.797,0786 Fa~:916,797.2054 c-mail: wat~Tdg @aol,com Letler to Mr. Ashok’Aggarawall May 1, 1997 ’Conceptual Design involves determining the project p’rogram, determining project constraints and preliminary project budget and testing the project program in a conceptual project layout. Schematic Design involves taking the conceptual design and refining the concept to determine the massing of the building, a preliminary architectural character of the project, preliminary structural sizes and layout. This phase would be where the "look" of the building will be determined and will be where the design, review board will approve the project. Design .Development involves taking the schematic design and refining the elements into a moredetailed architectural design, involving the designers of tl~e mechanical, electrical and plumbing systems, etc. to define the levels of need for their systems. This phase is where the construction costs can be fine tubed into a final working budget for the project, Construction Documents involves taldng the design development drawings an~l compl.eting the drawings of all the consultants and preparing final Bid Specifications to b6 used for construction’of the two structures. At the end of each of these, phases a construction estimate will be prepared that could be used as the basis for forming the assessment.district. However, due to the differing level of detail in the drawings at each ph.ase, a design contingency will be placed on the estimate. Based onindustry norms the contingency would be up to 30% at the end of the schematic design Phase and within 10% at the end of the design development phase. At the end of the construction documents this contingency can be reduced to 0% as the documents have then been completed. Due to the’highei" levei Of.risk involved in creating accurate estimates at the end of the schematic design p.hase,(due to the preliminary nature of the wo.rk), we highly recommend that the City carry the project through completion of the Design Develop.ment pt~ase before forming the assessment district. This would require expenditure of 38% of tile total design fee, or about $494,000 Please feel fre~to call at any time to discussthe abdve. Sincerely, THE WATRY DESIGN GROUP . Prinbipal ....’" """F~" ’ cc: Nick Watry’, Thomas Towey. J:\offi ce\rnls c\0430.97aa.doc.