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1997-07-07 City Council (36)
City of Palo AI~ C ty Manager’s Report TO:HONORABLE CITY COUNCIL FROM CITY MANAGER DEPARTMENT:POLICE ~ RESOURCES TRANSPORTATION DATE:JULY 7, 1997 CMR:310:97 SUBJECT:RESPONSE TO COUNCIL REQUEST FOR AN UPDATE ON COMMUTE COORDINATOR PROGRAM, DOWNTOWN PARKING ASSESSMENT REQUIREMENTS AND FEES, RESIDENTIAL PARKING PERMIT PROGRAM FEASIBILITY STUDY, AND THE CITY SHUTTLE PROPOSAL This report prov!des updated information requested by the City Council regarding the City’s Commute Coordinator Program, downtown parking assessment requirements and fees, residential parking permit program feasibility study, and City shuttle proposal. RECOMMENDATIONS No Council action is recommended at this time. POLICY IMPLICATIONS There are no policy implications associated with this report, as it is provided for information only. BACKGROUND At the April 7, 1997 City Council meeting, during the discussion on the agenda item associated with color zone parking, Council members asked a number of questions on interrelated issues dealing with downtown parking and transportation management. The topics and questions included the following: 1) valet parking - what.is the criteria, what establishments have been allowed to initiate, and what enforcement is done to ensure compliance prescribed with rules and the City’s regulations; 2) Commute Alternatives/ CMR:310:97 Page 1 of 11 Coordinator Program - what were the original intemal goals of the program, what work has been accomplished toward achieving those goals, and will the program be expanded to provide transportation coordination to all downtown businesses; 3) Residential Parking Permit Program Feasibility Study - what is the status; 4) Parking Assessment Requirements/Fees - can higher fees be assessed to businesses that generate greater volumes of traffic; 5) City shuttle - what is the status? Information regarding valet parking is provided in CMR:529:94. This report provides the answers and information on each of the remaining issues. COMMUTE ALTERNATIVES PROGRAM Palo Alto responded.to the need of reducing congestion and improving air quality by adopting the Transportation Demand Management (TDM) Ordinance in October 1990. The purpose of the ordinance was to develop transportation demand management programs at employer work sites with 100 ormore employees during the morning peak traffic periods in order to reduce traffic impacts and improve air quality within the City. The ordinance required employers to designate specific individuals to ensure the proper coordination, reporting and implementation of TDM programs. There was some discussion at the time the ordinance was adopted of having a City coordinator work half-time on the City’s program and half-time on Downtown commute issues. A decision was made that a full-time position was needed to handle the City program. As a result, the City hired a full-time coordinator in 1991. The purpose .of the coordinator was to work with all employees at City work sites to develop an effective program that reflected and supported the City’s policies. The program components were developed in 1992 and continue in effect. They include the following: Commute Vouchers for Carpoolers, Walkers and Bicyclists Employees using a commute alternative for at least sixty percent of scheduled work days during the month receive a maximum of $20 in merchandise or service vouchers. These vouchers reflect the alternative commute modes used. Employees walking to work receive footwear vouchers, bicycle riders receive bike shop vouchers, and carpoolers receive gas vouchers. Currently 242 City employees participate in the commute program each month. CMR:310:97 Page 2 of 11 Commuter Checks Participants using public transportation receive a tax-free $20 commuter check each month toward the purchase of a monthly transit pass. At the present time 22 employees are using commuter checks. Loaner Bicycles for Commuters A limited number of City-owned bicycles are available on a rotational basis for commuting purposes. Five employees are currently participating, with two additional bicycles to be made available soon. Guaranteed Ride Home This element provides a guaranteed ride home in case of emergencies for employees using any of the commute alternatives. Telecommuting Currently 16 employees work at home one or more days per week according to a regular schedule which is approved by their department. Written guidelines for each component of the pro.gram are available to all employees. Staff periodically reviews the guidelines to ref’me eligibility, service, and procedural standards. In April 1995, staff conducted the required Bay Area Air Quality Management District (BAAQMD) annual survey at two City work sites: the Civic Center and the Municipal Service Center (MSC). The Civic Center site included flae Civic Center building and the Downtown Library. The MSC site included the MSC, Utility Control Center and Animal Services buildings. The BAAQMD did not require the City to survey other sites since no other facility has 100 or more employees at a single, combined or adjacent work location. The survey was conducted during a predetermined one week period and included questions about work schedules, method of travel to work, fuel type, and attitudes about using commute alternatives. Ninety-three percent of the 689 surveys distributed were returned. The survey results indicated that the City’s vehicle to employee ratio was .82 which was within the 1995 BAAQMD performance objective of.83. The impact of the Commute Altematives Program has been measurable. The following table shows the average number of Civic Center Garage parking spaces that have been freed up. CMR:310:97 Page 3 of 11 Average Number of Parking Spaces Made Available in the Civic Center Garage by Commute Alternative Users Commute Alternative Average # of Spaces Made Available Each Day Carpool 9 Bicycle and Walking 6 Public Transit 13 Total Average 28 During the last year, enrollment in the Commute Alternatives Program has increased by twenty-seven percent. Forty-fire percent of all registered program participants work at the Civic Center. The City’s Commute Coordinator participates in the Bay Area Clean Air Partnership (BayCAP), a voluntary air quality program which enhances the BAAQMD’s Spare the Air campaign. Try Transit, in cooperation with BaYCAP, is currently supporting the City’s effort to provide a shuttle service from different Palo Alto neighborhoods during special events like the May Fete parade, the Summer Festival and the Chili Cook-Off. The City also is an active member in the Stanford Research Park Area Transportation Group. The group consists of all the Employee Transportation Coordinators for the Stanford Research Park employers. The Commute Coordinator also periodically works with representatives from other employers and has acted as a resource for information and guidance in developing similar programs. The Commute Coordinator has provided the Senior Center with information on complimentary transit passes, RIDES for carpooling partners and other commute alternative resources that are beneficial and free of charge. During the 1997-98 fiscal year, the Commute Coordinator will focus on providing assistance and support to downtown area employers who are interested in developing commute alternative programs for their employees. Assistance that will be made available to downtown area employers may include: informational packets on local resources and existing successful programs, on-site presentations on program development, resources from transit agencies, joint commute fairs, assistance coordinating employee earpools, and providing safe and easy bike routes to work. CMR:310:97 Page 4ofll RESIDENTIAL PARKING PERMIT PROGRAM FEASIBILITY STUDY UPDATFJ In September 1996, staff provided Council with information regarding the interest level among residents adjacent to the downtown area regarding a residential parking permit program. At that time, Council directed staff to work with the neighborhoods in studying the feasibility of a residential parking permit program that would include the following elements: 1) an annual fee for an all day non-resident permit, 2) fee short-term parking for up to two hours for non-residents, and 3) no-cost parking permits for residents. Staff ~ recently began working with both the University South and University North Neighborhood Associations on this study. Staff anticipates returning to Council with the results of that work within the next six to nine months. PARKING ASSESSMENT...REQUIREMENTS Between 1957 and 1986, the City of Palo Alto relied upon the Downtown Parking Assessment District to supply parking to support downtown development. Because of the Assessment District, new commercial buildings in the area were allowed to be built without providing on-site parking. Assessment District parking spaces, however, did not keep pace with development and the growth in parking demand, and, by 1985, the available parking in the downtown was being fully utilized along with parking intrusion into residential neighborhoods adjacent to the downtown. In 1986, the City took a number of actions affecting the downtown area. One action was to establish parking requirements. This action established the then-existing deficit as an allowable cap (1,560 spaces) and required that all new development projects provide 100 percent of their parking needs. The parking requirement for new parking was set at the uniform rate Of 4 spaces per 1,000 square feet of gross floor area. A uniform rate (same for all land uses) rather than variable rates (different depending upon land use) allows changes in land use within downtown buildings without the need to adjust the number of parking spaces required. This ability to change uses was felt to be essential to the downtown vitality and continued the same flexibility regarding changes in use that existed prior to 1986, when all parking requirements were met through the Assessment District and not individual properties. With a uniform parking requirement, some uses in new buildings provide more parking than they may need while other uses may generate more parking demand than the spaces required. The uniform rate of 4 spaces per 1,000 square feet was higher than the weighted average of proposed development projects in process in 1986 (3.1 spaces per 1,000 square feet). However, after ten years of experience and the advent of numerous restaurants as CMR:310:97 Page 5 of 11 reuses of existing buildings in the downtown area, the parking deficit has become more acute. Sales activity at Downtown restaurants has increased substantially in recent years. Some of this increased activity is because of new floor area devoted to restaurant use, but much of the increased activity appears to come from greater sales volume within previously-existing restaurant spaces. This change quite likely reflects the improved Bay Area economy. For restaurants, a sizable number of their noontime patrons are Downtown employees who walk from their offices, thereby mitigating somewhat the associated parking demand. In the evening, when most of their patrons are more likely to drive to the downtown, the parking "supply increases substantially, due to the availability of permit spaces that are not available during the daytime period. While staff believes that the impact of restaurants has had a substantial effect on parking in the downtown area, any changes to the existing uniform requirement would require a change in the zoning ordinance. The effect of instituting different rates for each type of use substantially reduces the flexibility and likely the vitality of the downtown area. IN-LIE_~U PARKING FEE_S During the discussions concerning the proposed e0nstruction of two new parking structures in the downtown area, the issue of the appropriateness of the current amount of the in-lieu parking fee was raised. As part of the 1986 action, Palo Alto Municipal Code (PAMC) Chapter 18.49 which sets forth parking regulations governing development in the CD Commercial Downtown District was adopted. In addition to the requirements (see above) that were established for CD district properties located within the Assessment District, Section 18.49.100(d) provides that the City may receive in-lieu monetary contribution (i.e. in-lieu parking fee) from an eligible new development in the Assessment District that is unable to meet the parking requirements. To be eligible to participate in the in-lieu parking program, sites must satisfy one or more of the following criteria listed in Section 18.49.100(d): (1) (2) Construction of on-site parking would necessitate destruction or substantial demolition of a designated historic structure; The site area is less than 10,000 square feet and it would not be physically feasible to provide the required on-site parking; CMR:310:97 Page 6 of 11 (3) (4) (5) The site is greater than 10,000 square fee, but of such an unusual configuration that it would not be physically feasible to provide the required on-site parking; The site is located in an area where City policy precludes curb cuts or otherwise prevents use of the site for on-site parking; The site has other physical constraints, such as a high groundwater table, which preclude provision of on-site parking without regular pumping of subsoil water or other extraordinary expense. In 1994, Council adopted an ordinance (PAMC Chapter 15.57) which provides for the collection of an in-lieu parking fee and establishes the procedures for its collection and management. CMR:524:94 (November 28, 1994) was the basis for Council consideration and included the draft ordinance, environmental assessment, and a report (Attachment 1) entitled "Nexus and Cost Basis Study, In-Lieu Parking Fee (Study). Cost basis for in-lieu parking fee The cost analysis, included in the study, proceeded through the following steps: Identification of feasible scenarios for public parking facilities in the assessment district. From those, identification of the most appropriate scenarios for implementation. Identification of potential locations for future parking projects, based on consideration of the development potential and unmet parking demand at those locations, and identification of parking projects appropriate for those sites. Select the most likely site and associated parking project. 4.Determine the cost to construct a parking stall in the most likely parking project. Recommend the amount for the in-lieu fee, based on the cost per added stall in the most likely parking project. The process of going through each of these steps is well documented in the Study. The cost information established as part of Step 4 concluded that the cost per added stall for the four scenarios determined in Step 2 to be the most appropriate for implementation in the Assessment District was as follows: CMR:310:97 Page 7 of 11 o 0 0 0 Single elevated deck on City lot Multilevel structure on City lot Two-level underground garage under private building Two-level underground garage under City lot $26,700/added stall $17,300/added stall $28,000/added stall $34,600/added stall The staff recommendation was to set the in-lieu parking fee at $19,000/added stall which represents the sum of $17,300 for a typical multilevel structure plus an additional 10 percent for up-front costs related to financing the project. The Planning Commission recommended that the in-lieu parking fee be established at of $17,300 (with no portion of up-front costs to finance project). The Council ultimately approved an in-lieu parking fee of $17,800 (including only a portion of the up-front costs related to financing .the project). The fee has since increased to its current amount of $18,005/added stall, based upon annual adjustments using the Construction Cost Index. The Study also includes an evaluation of the impacts of establishing the in-lieu fee at an amount that turns out, after the fact, to be less or more than the cost to actually build a new parking stall. Comparison with current cost information Using the cost information developed for the most recently completed parking structure feasibility study, the cost per added stall for a structure on Lots S/L is $21,300. If the cost of the ground floor retail component is removed, the cost per added stall for a structure on Lots S/L is $19,900/added stall, or 11 percent higher than the current in-lieu fee of $18,005/added stall. This is the most similar comparison of the type and size of structure to that used as the basis in establishing the in-lieu parking fee. For the proposed structure on Lot R, the cost per added stall is $29,200 or 62 percent higher than the current in-lieu fee of $18,005/added stall. This is due primarily to the more constrained .site and smaller structure size proposed for Lot R. Combining the two proposed structures (Lots S/L & Lot R) results in a cost per added stall of $22,800 or 27 percent higher than the current in-lieu fee of $18,005/added stall. The in-lieu fee was based upon the multilevel structure which has the lowest cost per added stall. Basing the fee on the multilevel structure had some advantages: (a) it is unlikely that a property owner would be overcharged for any parking project; and (b) provision of in-lieu stalls is encouraged by a lower fee; and © public usage of in-lieu stalls benefits the downtown, as such usage usually results in more intensive use of these stalls (i.e. greater turnover) than if they were reserved for a particular business. The disadvantage of selecting a lower fee is theat he in-lieu portion of a more expensive parking project would be CMR:310:97 Page 8 of 11 unfunded. However, the financial consequences to the Assessment District of under funding are relatively small. There is no financial consequence to the City, since the entire project is funded through and Assessment District. Future adjustments to in-lieu parking fee Since the current cost information developed as part of the feasibility study is quite general in nature and could change, upward or downward, during the design development process and construction, staff believes it is premature to change the amount of the in-lieu parking fee at the present time. Therefore, unless otherwise directed by Council, staff intends to continue with the annual Construction Cost Index adjustment to the existing in-lieu parking fee and at such time that the two proposed parking structures are completed and an accurate cost accounting is prepared, staffwill review the appropriateness of making an adjustment to the in-lieu parking fee and bring such information with recommendations to the Council for consideration and action. CITY SHUTTLE UPDATE In 1996, the City of Palo Alto, Chamber of Commerce, and regional transit agencies initiated the Try Transit/Spare the Air Campaign to promote clean air transportation alternatives in Palo Alto. To kickoffthe campaign, the first free special event shuttle service was offered to the Downtown Palo Alto Art Fair, August 24-25, 1996. The shuttle service, which was funded by Stanford University and the City of Palo Alto, operated every 15 minutes from 10:00 a.m. to 6:00 p.m. each day. The project proved to be very successful, carrying a total of 2,646 rider~ over the two-day period. Shuttles were also provided for the Showcase ’96 and the Snowmen and Sleigh Rides event. The 1997 special event shuttle service began with the May Fete Parade (May 3) shuttle, which carried 1,245 riders. Shuttles will be provided for the Chili Cook-off (July 4), Palo Alto Festival of the Arts (August 23-24), and the Snowmen and Sleigh Rides event (December 4). This year, the special event shuttle program is being funded jointly by the City of Palo Alto Recreation Department, Palo Alto Chamber of Commerce/Downtown Marketing, Palo Alto Medical Foundation, The Mercury News and Hewlett-Packard Company. Also, as part of the 1997-98 budget, Council approved $75,000 to complete a planning and design study for a community-based local bus shuttle system, which would serve Palo Alto residential neighborhoods and other local area destinations, including commercial areas, transit stations, schools, cultural and social centers. The objective of the program is to provide Palo Alto residents with a convenient, user-friendly shuttle system that will provide CMR:310:97 Page 9 of 11 improved mobility to individuals who do not have access to an automobile and serve as an attractive alternative to the automobile. Working with Stanford University, the study will examine options including the expansion and/or extension of Stanford’s Marguerite shuttle service, through appropriate service delivery and cost sharing arrangements. The study will also provide for planning and design work that is needed prior.to initiating local shuttle service. The components of the study will include: ® o A community and user survey; Market identification and segmentation; Routing, frequency and service area alternatives; Cost estimates; Identification of potential funding sources; Development of a comprehensive long-range plan as well as an initial start-up three-year demonstration plan; and A list of actions needed to initiate service. In addition, the study will include development of the necessary technical information and procedural steps to insure that the results have broad community understanding and support. While the concept of a local shuttle system already enjoys such support, the relatively high .ongoing costs associated with the provision of such services will ultimately necessitate incremental service development, as well as trade-offs that will likely not meet all current expectations. It is anticipat, ed that a consultant(s) specializing in local bus systems will be retained to complete the necessary planning and design work. The consultant will work with City staff and an advisory committee on both the technical and procedural components of the study. It is expected to take up to six months to select and hire a consultant and an additional nine months to fully complete the planning and design work. FISCAL, IMPACT_ For the Commute Alternatives Program, the estimated cost per employee is $111. ENVIRONME~_N~AL ASSESSMENT This is not a project for the purposes of CEQA. ATTACHMENT~ Attachment A - Nexus and Cost Basis Study In-Lieu Parking Fee CMR:310:97 t’age 10 o[ 11 PREPARED BY:Lynne Johnson, Assistant Police Chief Kathy Lee, Commute Coordinator Marvin Overway, Chi~ansp/~~fficial CHad , DURKI)N, Chief of Police ¯ jA~]~] }~S,~.D.trector of HuSh’Resources KEN SCHREIBER, Director of and Community Environment CITY MANAGER APPROVAL: ~ty Manager CC:Susan Frank, Chamber of Commerce Kathleen Haney, Downtown Palo Alto Marketing Committee CMR:310:97 Page 11 of 11 NEXUS AND COST BASIS STUDY IN-L U PARKING FEE City of Palo Alto Transportation Division September 1994 NEXUS AND COST BASIS STUDY IN-LIEU PARKING FEE INTRODUCTION The purpose of this study is (a) to present an analysis of the legally-required relationships between the in-lieu parking fee, the parking project it is intended to fund, and the development projects to which it is applicable; and (b) to select and justify the amount of the in-lieu fee, based on the most probable future parking project in the University Avenue Assessment District. SUMMARY Section I of this study discusses the origin and purpose of the in- lieu parking fee. Also discussed are the relationships between the commercial development to which the fee applies, the parking need generated by that development, and the cost of that parking. Section II of the study identifies the most likely public parking project that could be implemented in the University Avenue Assessment District--the multilevel structure. Its cost is developed based on examples of projects that have actually been constructed." The report concludes and recommends that the in-lieu fee be established at $19,000, adjusted annually on July 1 based on the Construction Cost Index for the San Francisco area. The appendix continues the cost analysis to other scenarios for public parking facilities in the Assessment District, and discusses .alternatives for the amount of the in-lieu fee. SECTION I:NEXUS ANALYSIS Section 66001(a) of the Government Code requires the City to (i) identify the purpose and use of a development fee; (ii) determine how there is a reasonable relationship between the use of the fee and the type of development project on which the fee. is imposed; and (iii) determine how there is a reasonable relationship between the need for the facility for which the fee is to be used and the type of development on which the fee is imposed. THE DOWNTOWN STUDY. The 1984-86 Downtown Study was initiated by the City Council to address the increasing parking and traffic problems in the downtown _ area. _ Increased parking deficiencies-and traffic-congestion had resulted, at least partially, from a surge in downtown office building construction since 1981. In July 1986, the City Council approved the Downtown Study~ certified the final EIR, and adopted pkg~inlicu.4 September" 8, 1994 Page 1 numerous measures affecting the downtown area. measures affecting parking are the following: The primary A limit was established of 350,000 square feet of new development beyond that existing in 1986. A blended parking rate of one space per 250 square feet of floor area was established. Exceptions are .allowed for handicapped access, seismic or historic rehabilitation, and additions-of less than 200 square feet° Parking can be provided off site under certain circumstances° Fees can be paid in lieu of providing new parking spaces on or off.site, under certain circumstances. The 1986 parking deficit of 1600 spaces should not be exceeded by new development. Re-evaluation of parking policies will take place when the unmet parking demand created by the above exceptions exceeds 225 spaces. A monitoring program was established ~to monitor these numbers. Staff was directed to undertake a feasibility study to’ evaluate an additional public parking structure downtown. Underground parking was limited to two levels below ground unless regular pumping of subsurface water will not be necessary. A twelve-point parking program was adopted, addressing the use and design of the existing downtown parking¯facilities° The Downtown Study established that, as of 1986, available parking in the Assessment District was fully occupied, with a deficit of 1600 spaces (Downtown ReDort, A Summary, January 1988, page 10) o The’additional growth of 350,000 square feet of non-residential development approved by City Council for the downtown area, though very limited, would nevertheless increase the parking .deficit. Thus, the Downtown Study proposed, and the City Council adopted, mitigations and regulations that require commercial development in the Assessment District to provide I00 percent of its own parking° However, the study also recognized that certain parcels would be unable to provide their own parking on site, due to site and/or kzoning constraints, so it-established two possiblekalternatives:-- (i) the development could provide new permanent parking supply off site, but nearby; and (2) certain qualified developments could pay the City an in-lieu parking fee equal to the cost that the City would pay to provide a net new public parking stall as part of an Assessment District parking project. The second alternative has been included in the CD -district regulations as PAMC Section _pkg\Jnlieu.4 September 8, 1994 Page 2 0 0 18.49.100(d). While provision for an in-lieu parking fee currently exists in Section 18.49oi00(d), the fee itself was not established and is the subject of this study. The terms "Assessment District", "public", and "City" are used interchangeably in this study to refer to parking lots, projects,and facilities which are paid for by means of assessments on parcels located in the University Avenue Parking Assessment District. These facilities are owned and managed by the City. PURPOSE AND USE OF THE PROPOSED FEE The ~ and us__~e of the proposed fee is to provide funds for the City to construct or purchase new public parking stalls as substitutes for stalls that are not provided by certain new commercial developments in the University Avenue Assessment District specified in Section 18.49.100(d). Under the current proposal, the.City would accumulate money from in-lieu fees until it had enough to finance a new public parking project. In practice, however, the fees may not accumulate quickly ’enough. A more likely scenario is that the City would proceed with a new public parking project based on other needs in addition to the need to build in-lieu spaces. The in-lieu fees .~hat had accumulated at that time would be used to pay for the number of. spaces for which the in-lieu fees had been collected, and the City would issue bonds through an assessment district process, or by o~her means, to pay for the cost of the remainder of the spaces included in the project. The new parking stalls provided by the in-lieu fees are not intended for the exclusive use of the specific developments that paid the fees. Rather, the parking stalls would be designated either as permit parking (available to any Assessment District employee), or time-limited public parking (available to anyone), in the same manner as all other public parking spaces in downtown City parking facilities. The primary advantage .of the_ in-lieu fee is _that it-permits development in the Assessment District under the CD district regulations, albeit under quite restrictive circumstances, that otherwise would be precluded due to the CD district requirement that a11 development provide its own parking. For example, there are a number of sites where, because of size and/or location, provision of any on-site parking is not possibla. Also, an existing business that meets the eligibility requirements established in PAMC Section 18o49~100(d),-and does not now’have itsown parking, or room for any,-could expand in size, and pay the in- lieu fee to cover its parking requirement for the increased square- __footage .... Otherwise,--the-business~would-not--be-able-to-expand,- unless it could find nearby permanent off-site parking, which is usually difficult to find. There will also be situations where a development can provide some of its required parking on site, with part of the parking requirement satisfied through the in-lieu..fee. Another advantage of the in-lieu program is that the in-lieu spaces. are.available to any employee or customer-in the downtown area, " pkg~i~lieu.4 S©ptemb©r8. 1994 -- " Page -3 just as are the other public spaces downtown. Public usage of the in-lieu stalls benefits the downtown, as such usage usually results in more intensive use of these stalls (i.e., greater turnover) than if they were reserved for a particular business. The primary disadvantage of the in-lieu fee, as it is currently proposed, is that some development may occur without an immediate corresponding provision of parking. There may be a delay of some time before in~ lieu fees could actually be converted into new parking stalls. However, this delay was accounted for in the Downtown Study EIR and in the Negative Declaration for this project. It was found to be acceptable as long as the temporary deficit caused by parking exceptions and by collection of the in-lieu fees remained below 225 stalls, and the total deficit did not exceed 1600 stalls. RELATIONSHIP BETWEEN USE OF THE FEE AND THE TYPE OF DEVELOPMENT TO WHICH THE FEE IS APPLICABLE The ~ of development to which the in-lieu fee is applicable is that portion of new commercial development in the Assessment District that is unable to provide i00 percent of its own required parking, as set forth in PAMC Section 18.49.100(d). That development generates new parking demand that would increase the parking deficit if parking stalls were not provided in some other manner. The us__e of the fee is to provide those stalls which that development does not provide. RELATIONSHIP BETWEEN NEED FOR PARKING STALLS AND THE TYPE OF DEVELOPMENT ON WHICH THE FEE IS IMPOSED The need for parking stalls downtown is documented in the Downtown ¯Study (discussed above) and the annual downtown monitoring reports. The October 22, 1993 "Commercial Downtown (CD) Monitoring Report" identifies a deficit, of 1490 spaces as of August 31, 1993.~ This continuing deficit indicates that existing parking facilities are insufficient to handle existing demand, and therefore results in a continual waitlist for existing parking facilities in the Assessment District, which has a negative impact on the employees and customers of existing commercial development. The deficit also negatively impacts the surrounding residential areas by causing downtown employees and customers to park in these areas (Downtown Study, Draft EIR, City of Palo Alto, December 1985, p. VI.J.13; also "1990 On-Street Parking. Survey", City of Palo Alto Transportation Division). The t_xp_~of development on which the fee is imposed--new commercial development in the downtown Assessment District that is permitted to exercise this option according to the criteria of PAMC 18.49.100(d)--generates new parking demand that wouldincrease the__ parking deficit, if parking stalls were not provided in some other manner. The funds generated through the in-lieu fee allow the construction of new parking facilities to satisfy the additional .parking demand that is not met through the provision of parking by the new development. pkg~inlie..4 September 8, 1994 Page 4 RELATIONSHIP BETWEEN THE AMOUNT OF THE IN-LIEU ~EE AND THE COST OF A PARKING STALL Section 66001(b) of the Government Code requires that the City determine that there is a reasonable relationship between the specific amount of a development fee and the cost of the portio~ of the public facility that-is-attributable to (necessitated by) the development project. city regulations specify that all non-residential development in the Assessment District provide on-site (or approved off-site) parking spaces at the rate of one space per 250 gross square feet of development. This requirement is based on studies that show, on an average basis throughout the Assessment District, non- .residential development generates the need for parking at this rate (Downtown Pal. Alto Parkinq Structures Feasibility Analysis, Volume i, Wilbur Smith and Associates, April ii, 1982, pp 26-28; also City Manager’s Report CMR:623:3, December 9, 1983, city of Pal. Alto). Based upon eligibility requirements established in PAMC 18.49.100(d), the in-lieu fee may be accepted by the City for part or all of the spaces required by City regulations for a new development; and that fee must equal the full incremental cost of providing a net new parking space in a new Assessment District parking project, including the cost of administration of the in- lieu program. ~ It is, therefore, reasonable to levy the full cost of providing new parking facilities on a per-required space basis on new non- residential development in the Assessment District for the number of parking spaces that such-development is unable toprovide, because such development generates I00 percent of the new parking demand for which the in-lieu fee is being levied. The developer pays only for the specific number of spaces that the developer’s project is Unable to provide on site or at approved off-site locations. The full cost of new parking stalls isestablished in Section.II of this study. SECTION IX: DETERMINATION OF INmLIEU FEE FOR A NEW PUBLIC PARKING PROJECT IN THE UNIVERSITY AVENUE PARKING ASSESSMENT DISTRICT .The cost analysis p~oceeds according to the following steps. Identify the feasible scenarios for public p~rking facilities in the Assessment District. 2. " From those, identify the most appropriate scenarios for implementation. Identify the potential locations for future parking projects, based on consideration of the development potential and unmet parking demand at those locations, and identify the ~arking projects appropriate for those sites. Select themost likely site and associated parking.project. Determine the cost to construct a parking stall in the most likely parking project. Recommend the amount for the in-lieu fee, based on the cost per added stall in the most likely parking project. STEP I,FEASIBILITY OF PARKING FACILITIES The first column of Table 1 lists four types of "public parking facilities that exist now, or could be constructed in the future, in the University Avenue Assessment District. These facilities could be-constructed on the sites of existing City .parking lots (column 2 of Table i), or in conjunction with private developments such as the 250 University/Ramona Plaza project (columns 3 and 4). TABLE 1 FEASIBILITY OF PARKING FACILITIES IN THE UNIVERSITY AVENUE PARKING ASSESSMENT DISTRICT TYPE OF PARKING FACILITY Surface Parking Lot Single Elevated.Deck Multilevel Structure (may include basement level) Two-Leve~¯ Underground Garage--’ under existing City parking lot or under private building BUILT ON/UNDER EXISTING CITY PARKING LOT (1) Already exists (4) Feasible (7) Feasible with or without first floor retail (10) Feasible with or without air rights BUILT ON PRIVATE LAND (FOR SALETO CITY. INCLUDING LANDCOST) (2) Would not be built (5) Would not be built (s) Feasible (11) Feasible BUILT ON PRIVATE LAND (FOR SALE TO CITY NOT IN- CLUDING LANDCOST) (3) Would not be built (6) Would not be built (9) Feasible (12) Feasible The numbered cells of Table 1 identify 12 scenarios that cover the range of reasonable possibilities for public parking projects in the Assessment District in the foreseeable future.The 12scenarios are described below. Surface Parkinq Lot (Scenarios 1-3) The surface lot is the most common existing parking facility. However, it is unlikely that the City or a private landowner would build new surface parking lots, other than for’temporary purposes, because of the high value of land in the downtown area. Thus, surface parking lots were not included for additional analysis. pkg~inlieu.4 September 8, 1994 Page 6 Sinqle Deck over Existinq Lot {Scenarios 4-6) Due to the high value of land downtown, it was assumed that it would be financially impractical for a landowner to build an elevated deck on a privately owned site, so Scenarios 5 and 6 were not included for further consideration. Similarly, it was assumed that the City would not purchase a new site on which to construct a deck, or any new parking facility, as the City already owns severalparking lots spread throughout the Assessment District that could be utilized. A single elevated deck over an existing City parking lot is considered to be a possibility--one that is typified by the parking deck on Lot 5 on Cambridge Avenue and the recently- completed parking deck 9n Lot 3 on Cambridge Avenue, both~in the California Avenue Parking Assessment District. M~Itilevel Parkinq Structure (Scenarios 7-9) This type of facility is typified by the WebstermCowper Garage, which now has seven levels of parking, including one basement level, an at-grade level, and five above-grade levels, including the roof. Stanford University parking structures I, II, and and the downtown Mountain View, Santa Cruz, and Redwood City structures also. typify this type of facility° Such a facility could have one or two basement levels, one ground level, and up to five abovelgrade levels, to stay within Palo Alto’s existing height limitation° Underground parking deeper than two levels below’grade is prohibited by the Palo Alto Municipal Code Section unless regular pumping of sub-surface water would not be required. The--entire ~structure would normally be de~oted to parking. One variation of a multilevel structure would be to have retail ~portions on the ground floor, with parking above and below. Other v~:~iations involving use of air rights for other uses above parking are discussed in the appendix. A multilevel parking structure could be built on the site of an existing City parking lot (Scenario 9)", or a private developer could build a structure on private land and offer all, or a portion of the-parking for sale to the City through an assessment district process; with or without including the cost of land (Scenarios 8 and 9). Two-Level Underqround Garaqe (Scenarios 10-12) One or two levels of underground parking could be constructed under an existing city parking lot, with parking maintained, on ’the surface level (Scenario 10), as suggested in the October 1993 Downtown Urban Design Guidelines. Even though it would be less costly_to build an_above-grade structure,_~here_are reasons_~hy_it might be preferable to construct underground parking: unenclosed surface parking, which seems to be preferred by business district customers, could be preserved; future options for a surface and/or air rights project could be preserved;there may.be windows, doors, private parking areas, or other aspects of buildings adjacent to the parking lot that~would preclude or be impacted by above-grade pkg\inli©u.4 September 8. 1994 ..........Page_ 7 construction; and,- a concern for aesthetics might not favor an elevated structure. Scenario 10 includes the possibility of surface and air rights development in conjunction with undergound public parking, as discussed in the appendix° Another scenario for underground parking is for a private developer to construct a commercial building with underground parking on ’private lando If the developer were able to provide more parking than required by City regulations, the developer could offer the excess parking for sale to ~he City through an assessment district process, with or without including the cost of land (Scenarios ii and 12)o Scenario 12 is typified by the favorable arrangement for additional parking in conjunction with the 250 University/Ramona Plaza project° STEP 2.SELECTION OF THE MOST APPROPRIATE PARKING FACILITY SCENARIOS FOR IMPLEMENTATION IN THE DOWNTOWN ASSESSMENT DISTRICT Table 1 and Step i described 12 parking facility scenarios for public parking projects in the Assessment District. From’the above discussion, only 7 of the 12 scenarios are considered to be feasible for future projects. In Step 2, these seven are further narrowed down to the four most appropriate, or "developable". Least Appropriate Scenarios As explained in Step 1, neither the City nor a private property owner would be likely to build more permanent surface parking lots, nor would a private property owner who owns a surface parking lot be likely to build an elevated deck on such a lot (Scenarios 2, 3, 5, and 6 in Table i). Nor would a private property owner be likely to’build a multilevel parking structure on private land, because there would be minimal, if any, leasable building space included (Scenarios 8 and 9). Downtown land is too valuable to be used just for parking, even multiple levels Of pa;king, with minimal lease income to the owner. In Scenarios ii and 12, it is more likely that a property owner would offer’.parking for sale to the City without including land costs~ because the owner would probably desire to provide a public benefit in order to gain certain development rights. Thus, Scenario 12, which does not include land costs, is considered’to be more appropriate than Scenario Ii, which includes land costs. pkg~inlizu.4 September 8, 1994 Page 8 ~ost Appropriate Scenarios The remaining four scenarios that are the most appropriate for implementation in the Assessment District are Scenarios 4, 7, I0, and 12, shown by the shaded cells in Table 2o TABLE 2 MOST APPROPRIATE PARKING SCENARIOS FOR THE UNIVERSITY AVENUE ASSESSMENT DISTRICT TYPE OF PARKING FACILITY Surface Parking Lot Single Elevated Deck Multilevel Structure (may include basement level) Two-Level Underground Garage-- under existing City parking lot or under private building BUILT ON/UNDER EXISTING CITY PARKING LOT (i)Already exists BUILT ON PRIVATE LAND (FOR SALE TO CITY INCLUDING LAND COST) (2) Would not be built Would not be built (8) Feasible Feasible11) BUILT ON PRIVATE LAND (FOR SALE TO.CITY NOT IN- CLUDING LAND COST) (3) Would not be built Would not be built (9) Feasible STEP 3. IDENTIFICATION OF POTENTIAL LOCATIONS FOR FUTUBR ASSESSMENT DISTRICT PARKING FACILITIES After identifying above the four most appropriate parking scenarios for the Assessment District, it is necessary to identify the specific locations where these scenarios could be implemented. Private parcels and City parking lots in the Assessment District were reviewed for this purpose, as discussed below. Redevelopment Potential of Private Parcels Private parcels in the Assessment District were.examined for the likelihood of redevelopment in a form that might include new Public parking. Only one parcel was identified as having a reasonable such likelihood. .This is the 325 Lytton property, in combination with City Lot K, which has been considered by a local developer as an opportunity to build a new building in conjunction with added pkg~i.nlie,.4 S©ptcm6¢rS. 1994 Page 9 public parking underground. Three other parcels and groups of parcels were identified as potential for such redevelopment, but are considered to be too uncertain to include in this analysis (500-526 University, 400-420 University/515 Waverley, and 663 Alma) o The Planning and Transportation Division staff used the following factors in assessing the redevelopment potential of private parcels: Size of parcel. Physical condition of structures. Physical and economic constraints. Viability of current business. Intensity of current development or use. Indications from the owner, or other source, regarding the owner’s redevelopment plans .or disposition toward joint redevelopment with the City. Redevelopment Potential of Existinq City Parkinq Lots for New Parkinq Facilities . Existing City parking lots were examined for the possibility of redevelopment according to one of the four parking facility scenarios listed above._ The process used by ~the Transportation Division staff was based on the following factors.and information sources: Physical constraints of the.parcel, including size, access limitations from the street, and access needs of adjacent private buildings, including doors, windows, and private parking areas. Physical location of the lot or parcel in the~lock, including its relationship to the elevations of adjacent buildings. Data from a limited 1989 City analysis examining the efficiency of converting surface parking in City lots to multilevel parking (TransPortation Division, May 24, 1989). Conceptual designs produced in 1992 by the Watry Design Group for Lots D, O, and S/L. Guidelines from the Downtown Urban Design handbook, October -1993. -- Possible sale or lease of surface and/or air rights on i City lot (included consideration of factors such as lot size and location). Complexity of redevelopment, such as closure of a public pkg\inlieu.4 September 8, 1994 .Page _!0 street or alley, abandonment of a public right-of-way, encroachment on or under public property. City of Palo Alto 1994-95 Capital Improvement Project (CIP) No. 19530, "Downtown Parking Structure Feasibility Study." Relative unmet parking demand, as determined below. Estimation of Unmet Par~inq Demand. The likelihood of implementation of a public parking project is affected not only by the availability of an appropriate developable location, but also on the unmet need for parking in that area. For example, if there were high demand for parking near a City parking lot that had potential for redevelopment as a new or expanded parking facility, the City might be more inclined to consider that redevelopment. Likewise, a private property owner who is considering redevelopment of a site in an area with high parking demand might be more inclined to construct extra parking as an added public benefit, or enter into a joint development project with the City. Thus, there is a need to establish a measure of unmet parking demand at each location in the Assessment District. The method selected was to divide the Assessment District. into blocks as defined by the major cross streets, then into sectors, as defined by the conjunction of four blocks. For each block, the number of public off-street parking stalls was determined° This constituted a measure of the parking supply on a block-by-block basis. Then, using the 1994 Assessment District engineer’s report and roll, a tally was made for each private parcel of the parking required,- less the parking provided on site. This constituted a measure of the parking demand on a block-by-block basis. The ¯ supply was subtracted from the demand, yielding a relative deficitin each block in the Assessment District. Finally, the deficit calculation was translated into a deficit index for each block (highest deficit = i), as ~hown in Figure Io This index should be considered as a surrogate representation of the actual deficit° What is most important i~ the use of a method that produces a reasonable representation of the deficit and that is consistently applied throughout the area, enabling the relative intensity of the deficit to be compared on a block-by-block basis. Unmet parking demand, as measured by this deficit~ index, was considered in the review of existing City parking lots for redevelopment potential. For .example, Lot D has significant physical constraints relating to circulation and the need to access adjacent properties that make it a difficult lot to redevelop. However, these physical difficulties are offset to some degree by its location in an area of high unmet parking demand. Thus, Lot D has been included as a potential future parking project, albeit of less likelihood of implementation compared to other locations. Based on the criteria listed above, seven City parking lots that are considered to be reasonable possibilities for implementation of specific new parking projects were identified. Figure 2 and Table 3 show the identified projects. Parking projects are listed in approximate decreasing order of-likelihood of implementation. pkg~inlicu.4 ¯ September 8. 1994 Page 11 0.52 =,,,,,,,"(block bounded by major "’streets or block bounded by major streets and Assessment D=str=ct boundary) 0.43 Sector Deficit Index =(average of deficit indices of blocks adjoining at intersection) Scale:¯0.51 0.68- ~.00 ,i~, ~i~it 0.34 - 0.67 medium deficit 0.00 - 0.33 low deficit ~AVERLEV 0.53 iiliilliillliilil r 0.08 } .FIGURE 1: - DE_FICIT iNDICES (P) ~ ( M 2967 EM FIGURE 2:LOCATIONS OF POTENTIAL PUBLIC PARKING PROJECT~; THAT-COULD BE-IMPLEMENTED IN THE UNIVERSITY AVENUE ASSESSMENT DISTRICT TABLE 3 POTENTIAL PUBLIC PARKING PROJECTS THAT COULD BE IMPLEMENTEDIN THE UNIVERSITY AVENUE ASSESSMENT DISTRICT Lots S/L Multilevel structure with or without 1st floor retail Lot R with or Multilevel structure with or without 1st floor retail without Lot P Lots S/L Air rights over 2 levels underground Lot R with or Air rights over 2 levels underground without Lot P Lot D Multilevel structure LOt D 2 levels underground with parking on surface ’ LotO Multilevel structure LOt O 2 levels underground with parking on surface Lot K and 325 Private building over 2 levels underground possibly Lytton combined combined with air rights over Lot K Projects on Lots D, O, and the Lot~K/325 Lytton combination are considered to be less likely than the ~ther projects because of the greater physical constraints of Lots D and O related to internalcirculation and access needs of adjoining properties,and the vagaries of the real estate market associated with 325 Lytton. Parking structures on Lots S/L, P, and R are considered to be more likely than underground parkingwith or without air rights development, because a structure is less complicated and less expensive (refer to cost analysis in appendix) than an underground or air rights project. Furthermore, a structure has been identified more frequently than other types of parking facilities for those locations, as evidenced by the Urban Design Guidelines and the City’s CIP project. The CIP project will study the feasibility of building a parking structure on a downtown-City parking~lot~ which could-lead to-construction--ofa structure within the next three to five years. The study is expected to focus on a Webster-Cowper type of structure (i.e., as above-grade structure in conjunction with one or more underground levels) on Lots S/L, R, or R/P. pkg~inlicu.4 September 8, 1994 __ . Page 14 City lots not included in Table 3 are not considered to be likely candidates for redevelopment primarily because of small size, location, and/or physical constraints such as the access and circulation issues mentioned above. Analysis of conceptual plans produced by the Watry Design-Group for Lots D and O, and the cost analysis presented in the appendix, indicates that cost per added stall for a single elevated deck would be too high to be included as a likely project for the locations listed-in Table 3. Also, a single deck does not reflect current public and City thinking for these sites. Existing City garages (Webster-Cowper, Civic Center, B, and Q) were.not considered in this analysis because significant alteration is neither needed nor reasonably feasibl~. The parking projects in Table 3 constitute the current best assessment of potential new public parking projects that could be implemented in the University Avenue Parking Assessment District in the foreseeable future, with the multilevel structure being the most likely type of parking facility. The two most likely locations for a multilevel structure are Lots S/L and Lot R with or without Lot P. In the future, the City or another property owner may determine that a different parking facility is more appropriate for a particular location than the ones identifed, or that one not listed may turn out to be a potential project location. Notwithstanding these inevitable uncertainties, a multilevel structure on Lots S/L or R/P serves as a reasonable, rational basis for future planning for a public parking project in the Assessment District, and as the basis for the in-lieu fee. DERIVATIONSTEP4. STRUCTURE General Assum~ What the Cost Calculation Includes The cost per parking stall ~’ presented below includes all hard and’soft costs, from project conception to completion--material, labor, design, architectural and engineering services, :testing, inspection,_fees, any special conditions such as.hazardous materials removal and utilities relocation, and administrative costs associated with development and construction of the project. Costs of bond issuance will be added to the above cost in Step 5. Interest charges for bond debt service should not be included in the in-lieu fee, and thus are not included in this cost calcula- tion. Whatever amount of in-lieu funding exists, at the’time of project financing, will be used to pay down the total amount to be financed. For example, if the next parking structure were to ---cost $5.0-million,-and $500,000 had accumulated-inin-lieu~-fees (including earned interest), the amount to be financed through an assessment district process would be $5.0 million, less $500,000, or $4.5 million, plus appropriate financing related costs. : pkg\inlicu.~ S©ptcmbcrS, 1994 -Page 15 Cost per Added Stall. The in-lieu provisions of PAMC 18.49.100(d) require that the in-lieu fee be based on the incre- mental cost of a net.new, or added, parMing stall in an Assess- ment District parking project (the terms "added" and "net new" are used interchangeably in this study). For any project built on an existing parking lot, only the added stalls (i.eo, the additional stalls above and beyond those already existing on the project site) represent an increase in the parking supply. Typically, the primary purpose of a parking project is to create more parking stalls than what already exist at the project location. Thus, the real cost of that project is determined by dividing the project cost by the number of those additional, or added stalls created by the project. The number of added stall~ is equal to the total number of stalls in the new parking project minus the numberof stalls that existed prior to the project. This.effectively raises the cost per stall for a project built on an existing parking lot, compared to one built where no parking previously existed. The stalls in existing City surface lots have already been paid for by downtown businesses. Removing these stalls and rebuilding them in a new parking facility represents a new cost that results solely from the construction of that new facility° The cost of that removal and replacement becomes an inseparable element of the cost of the new project. Thus, the difference between the cost per stall (based on the total number of stalls in the project) .and the cost per added stall essentially represents the cost to replace existing _stalls. This difference is greatest for a facility with only two levels, as the cost to replace existing stalls is spread over only one level of new parking. The differ- ence decreases with an increasing number~of levels in the facili- ty. The cost differential between the cost per stall and cost per added stall can also be viewed as a surrogate for the per- stall cost of new land if the City had.to buy vacant land to construct a parking project, instead of constructing it on an existing City-owned parking lot. Replacement Ratio. In most .parking facility designs involving multiple levels built on an existing City parking lot, fewer sur.face parking stalls would be able to be replaced on the surface, and fewer constructed oneach of the above- and below- grade levels, than were existing on the surface prior to the new project. This is because ramps, columns, and other structural elements usurp some of the space available for parking. The "replacement ratio"~ (r) is used in this study as a measure of these losses in moving from surface-only parking to parking on two or more levels. Besides the structural elements, other factors-influence the-replacement ratio,-including the design of the circulation system, the size and shape of the site, and structure setback restrictions. Another factor is the latest parking dimension requirements (e.g., an increased percenta0ge of compact stalls in thenew design can increase the replacement ratio, while new requirements for parking for the disabled can decrease the replacement ratio). The replacement ratio is the pkg~inlieu.4 September E, 1994 Pag~ 16 average number of parking stalls per level in the new project divided by the number of parking stalls in the existing surface lot. The lower this ratio, the higher the cost per added parking stall. It~is necessary to select a representative replacement ratio to be used in the cost calculation. Following is a list of replace- ment ratios that have been calculated for several existing and conceptual parking facility designs for Palo Alto surface parking lots. Parkinq Project or Conceptual Desiqn Cambridge Ave Lot 5 Structure (old) Ca~ridge Ave Lot 3 Structure (new) Alternative design #2 for Lot 3 (Wilbur-Smith) Alternative design #3 for Lot 3 (Wilbur-Smith} Average of five designs for Sherman Ave Lot 7 (Wilbur-Smith} Webster-Cowper Garage Garage Q Conceptual design for Lot D structure (Watry) Conceptual design for Lot O deck (Warty) Conceptual ~esign for Lots’S/L structure (Watry) ~ent~ ~. 80 1.03 0.98 0.88 0.81 0.50 0.93~ 0.56 0.61 0.82 The recently-completed Cambridge Avenue Lot 3 structure, with r = 1.03, is unusually sucessful in not losing (but actually gaining) stalls on aper-floor basis, despite the space requirements of the ramps and columns associated with a structure. A contribut- ing factor .is that the.structure was built up to the property lines of the site (i.-e., no setbacks). At the other extreme is the Webster-Cowper Garage with r = 0.5, due primarilyto’the unusually large setback, of the garage from the property lines to make room for extensive landscaping, lighting and ventilation for the undergroundlevel, and the perimeter public walkways. The weighted average replacement ratio for the above examples is r = 0.80, which has been chosen as the most appropriate to be used in the cost calculations included in this study. Calculation of Cost per Stall for Multilevel Parking Structur~ The. only example of a standalone multilevel parking structure in Palo Alto is the Webster-Cowper Garage. When originally built in 1986, it was a 418-stall five-level structure, including a basement and parking on the roof, and was built on existing City Lot J which had 167 existing stalls. Since then, developer Jim Baer added two additional floors that are restricted to private use only. The cost of the original facility is used as the basis for the parking stall cost calculation. Cost Pe~ ~tall. The cost to build the Webster-Cowper Garage, exclusive of financing costs, is $5.4 million, expressed in mid- 1994 dollars, or $13,000 per stall, based on 418 total stalls (March 30, 1989 memorandum, Public Works Department, "Cost Comparison, 250 University Versus Parking Lot J"). Table A-4 in the appendix lists a number of local multilevel parking projects, pkE~i~u.4 September ~, 1994 .............Page 17 with and without basements, with costs per stall ranging from approximately $i0,000 for the Government Center Structure in Redwood City and Stanford Structures I and III, to $16,800 for the downtown Santa Cruz structure (the DeAnza structure, at$8,200 per stall, is not included in this comparison because it is so much larger than any project that would be built downtown). Webster-Cowper stands approximatel~ at the midpoint of this range and, being a project constructed in downtown Palo Alto, is selected as the best project for which to calculate a cost per stall figure. Cost Der Added Stall. Adjusting the cost of the Webster-Cowper project for the replacement of 167 existing spaces, and using the representative replacement ratio of 0.8, a cost per added stall of $17,300 is calculated, as shown below... r = 0.8 = avg of 133.6 stalls per floor/167 existing stalls; Representative project thus would have 5 levels x 133.6 = 668 total stalls; Assuming a construction cost of $13,000/stall from actual Web- ster/Cowper project, tqtal project cost = $8.68 million; Thus, cost per addedstall = $8.68 million/(668-167) = $17,300 STEP 5.RECOMMENDATION FOR AMOUNT OF IN-LIEU FEE As pointed out at the conclusion of Step 3, the amount of the in- lieu fee should be based on the cost per added parking stall for a multilevel parking structure, or $17,300 per stall otherwise required to be provided by development projects that meet one or more of the in-lieu criteria. One additional adjustment recommended for inclusion in the lieu fee concerns financing costs. When a new parking structure is built in the downtown area, the project will be financed through the formation of an assessment district comprised of two basic components: (a) initial, upfrontobond issuance costs (legal fees, underwriter fees, etc.), and (b).on-going, annual bond payments.(principal and interest) throughout the bond issue period. Since bond issuance costs (approximately I0 percent of the amount of thebond issue) are upfront costs and a necessary precursor to proceeding with a new parking structure, the in-lieu fee should include an appropriate share of such cost. Therefore, the recommended in-lieu fee is $19,000 per added stall, inclusive of a proportional share of the bond issuance costs ($17,300 plus i0 percent for bond issuance costs). This fee includes the full incrementa~ cost of providing a net new public parking stall in the Assessment District, as required by PAMC Section 18.49.100 (d). The fee should be adjusted annually on July I, based on the -~ -Construction Cost-lndex for the San Francisco area. ~ A typical multilevel structure for Lots S/L could have a total of six levels (includingbasement), about 550 total stalls, and would be expected to cost approximately $7.15 million ($13,000 x 550). Such a structure could be constructed within the next 3 to pkg~nlieu.4 $~ptemb©r 8,]994 Page 18 5 9ears, during which time it is estimated that up to 50 unbuilt parking stalls could accumuiate from the in-lieu provision. That number of stalls (or whatever the actual number is at that future time) would be designated for funding by the in-lieu fees that had accumulated. At $19,000 per required stall, that amount would be $950,000, plus interest. As shown in the appendix to this study, the multilevel structure has the lowest cost per added stall of all the facilities ana- lyzed. Basing the fee on the multilevel structure has some advantages: (a) it is unlikely that a property owner would be overcharged for any parking project; and (b) provision of in-lieu stalls is encouraged by a lower fee, and public usage of in-lieu stalls benefits the downtown, as such usage usually results in more intensive use of these stalls (i.e., greater turnover) than if they were reserved for a particular business. The disadvan- tage of selecting the fee for a multilevel structure is that a more expensive parking project would be underfunded. As descibed in the appendix, however, the financial consequence to the Assessment District of underfunding can be relatively small. pkg~inlie..4 September 8, 1994 Page19 APPENDIX COST BASIS STUDY FOR OTHER TYPES OF PARKING FACILITIES THAT COULD BE IMPLEMENTED IN THE UNIVERSITY AVENUE" ASSESSMENT DISTRICT APPENDIX COST BASIS STUDY FOR OTHER TYPES OF PARKING FACILITIES THAT COULD BE IMPLEMENTED IN THE UNIVERSITY AVENUE ASSESSMENT DISTRICT This appendix applies the cost analysis of this study to the other parking scenarios in Table 1 that are considered feasible in the University Avenue Assessment District--Scenarios 4, 8, 9, i0, II, and 12. DERIVATION OF COST PER STALL FOR OTHER SCENARIOS The following costs include all development and construction- related costs described in Step 4 of the study. Costs of bond issuance are added to these costs in Table A-3. As explained in Step 4, interest charges for bond debt service are not included in these cost calculations. Sinqle Elevated Parkinq Deck The most current example of a single parking deck on a City parking~ lot is the recently-completed project on Lot 3, in the California Avenue Business District. The cost of this project is used as the basis of the cost calculation of Scenario 4. Cost Per Stall. The October 1993 Final Engineer’s Estimate for the Lot 3 project, a record of ali costs associated with this project, indicates a, total project cost of $1.87 million, exclusive of financing costs. Based on the total of 1-86 stalls provided in this ¯ structure, the cost per stall is $i0,000. Table A-4 summarizes cost and other data for the Cambridge structure and other local parking projects. Cost per Added Stall. Subtracting out the 90 previously existing stalls on Lot 3, and adjusting for the representative replacement ratio of .0.80 results in a cost per added stall of $26,700 for a representative single deck project (Scenario 4), as shown below. r = 0.8 = avg of 72 stalls per floor/90 existing surface ~talls; Representative project thus would have 2 x 72.= 144 total stalls; Assuming a Construction cost of $10,000/stal-i from actual Lot 3 project, total project cost = $1.44 million; Thus, cost per added stall = $1.44 million/(144-90) & 26~~. Multilevel Parkin~ Structure As determined in Step 4, the cost per stall (based on total stalls) -o~--a -multilevel--structure--isiS13,000 ..... This_is -applicable--to _ Scenario 9 in Table i, where the structure does not replace existing public parking, and land costs are not included. Land Cost. Scenario 8 includes the cost of land added to the design and construction costs of the Scenario 9 multilevel parking structure. Land cost was assumed to be $i00 per square foot, based __pkg\inluapp.4 Scplcmb~rS. 1994 .........Page A-I on the city’s purchase of the Board of Realtors building. This cost was then distributed over five levels of parking as follows: 418 stalls over 5 levels = 83.6 stalls/level; $100/sf over 5 levels = $20/sf on each level; Parking stall = 355 sf for Webster/Cowper [other examples: 370-375 sf for 250 University and Mountain View garages]; Land cost = 20x375=$7,500/stall. Thus, land cost contributes an additional cost per stall of $7,500, for a. total cost of $13,000 + $7,500 = $20,500 per stall for Scenario 8. Underqround Garaqe (Two Levels) The most recent underground parking project in downtown Palo Alto is the 250 University/Ramona Plaza project, completed in 1991 by developer Jim Baer. The project consists of a four-story office building over a two-level underground parking garage, located on private land. The cost of this facility is used as the.basis of the parking stall cost calculations of Scenarios 10-12. Cost per Stall. As part of the negotiations for City approval of his project, Mr. Baer offered to construct and sell to the City one level of parking beyond what was needed for the project. The City accepted the offer at an agreed-upon price of $23,000 per stall, negotiated prior to construction ($24,800, expressed in mid-1994 dollars). This turned out to be actually lower than the as-built cost per stall, as explained below. -This type of-development project could occur-at other downtown locations in the future, because many property owners support having more public parking downtown, and a property owner may need to consider offering a public benefit in the form of public parking in exchange for certain development opportunities. It is also an effective way to provide smaller increments of public parking at locations spread throughout the downtown area, rather than a larger increment at one location. Mr. Baer provided details about the individual cost components of the project. With that information, it was then determined which aspects of the construction of 250 University would be lik41y to be repeated in a typical downtown development site, and which would be considered to be special accommodations to the specifics of the 250 University project. From that analysis, a "model project cost scenario" was developed, representing the construction cost of a 250 University type of project in a generic downtown location. The total as-built cost for the 250 University project is $28,400 per parking stall, expressed in mid-1994 dollars (not including land --cost)-;-and-the estimated250-University "model,,-cost-is~$28~000 per parking stall expressed in mid-1994 dollars (not including land cost). The details of this analysis are contained in an October 30, 1991 memorandum from Jim Harrington to Marvin Overway, "Model Cost Estimates Per Car Stall"; and a September 6, 1994 memorandum from Gary. Weinreich to Carl Stoffel, same title. pkg\inluapp.4 September 8, 1994 Page A-2 Other examples of totally underground parking projects are listed in Table A-4, but none of these are considered to be directly comparable to 250 University. The Paseo Padre Project in downtown San Jose (one level of parking beneath a four-story housing project) has a cost per stall of $26,600. The Measurex parking garage in Cupertino (3% levels beneath an office building) has a cost per stall of $28,900. Neither case involved constricted construction next to existing buildings, or any other unusual conditions. In neither case is the cost data as detailed as that obtained for 250 University. Nevertheless, these two examples serve to illustrate the costs associated with this type of parking facility. The costs for the 250 University project appear to be typical and reasonable for that type of project. The project represents one built according to Palo Alto’s construction practices and meets Palo Alto’s requirements for parking stall and circulation layouts. Detailed cost data was available from the developer so that each cost component could be analyzed for its reasonableness in the specific 250 University project, and in its application in the model applicable to a generic downtown location. The 250 University model, thus, serves as the best cost basis for Scenarios 10-12. The cost of Scenario 12, thus, is $28,000 per stall, based on total stalls. . Land Cos~. Scenario 11 includes the cost of land added to the design and construction costs of an underground parking facility. As for Scenario 8, land cost was assumed to be $100 per square foot. This was-distributed over two levels of parking and four levels of building (due to the City’s 50-foot height limit, a maximum of four .stories was assumed for a building), as follows: 131 stalis over 2 levels = 65.5 stalls/level; $100/sf over 6 levels © $16.70/sf on each level; Parking stall = 370 sf for 250 Univ; Land cost = 16.70 x 370 = $6,200/sta11. Thds, land cost contributes an additional cost per stall of $6,200, for a total cost per stall of $34,200 per stall ($28,000 + $6,200) for Scenario ii. Cost per Stall and per Added Stall for Two-Level Underqround Garaqe Under an Existinq City Parkinu Lot. In order to develop the cost for Scenario 10--a two-level underground garage under an existing City parking lot, with parking on the surface (ground level)--two adjustments were made-to the base cost of $28,000 per stall from the 250 University model. First, parking on the surface requires more structural support for that level than was provided for the ~250 University~project~-~-where-only-the--statici-load of--a--building needed to be supported on most of the ground level. To approximate this increased cost, the cost of structural elements for one slab of the garage was doubled and this added cost was distributedover three levels of parking. The second adjustment was to convert the pkg\~nluapp.4 September 8, 1994 Page A~3 cost per stall to a cost per added stall assuming a replacement ratio of 0.80. The result is a cost of $34,600 per added stall for Scenario i0, as shown below. Increase of 25% in total structural costs because of doubling of cost of structural elements for one slab to handle parking on the surface: $293K; Garage total cost = 293K + (28K x 131) = 3.96M; Using the size of 250 University as a. specific example, assume same number of stalls on ground level as on other levels (ground level has similar lost space due to ramps as do the underm ground levels), thus resulting in 196 total stalls on 3 levels, and cost/stall = 3.96M/196 = $ 0~; Calculate cost per added stall with r = 0.8: Existing stalls = (196/3)/.8 = 81.7; Surface and Air Riqhts Development on City Parkinq Lots Scenario 10 represents the cost of constructing additional parking under an existing City parking lot while maintaining parking on the ground level. A variation of Scenario 10 would be the construction of leasable building space on and/or above the existing parking lot. Such a project could be constructed by a private developer if the City were to sell or lease its surface and air rights. If a building were constructed on the lot, all parking would have to be placed underground--existing, additional public parking, and that required for the new use. It would be reasonable to expect that, with judicious use of space, additional new public parking could be included in such a development, as it was in the 1983 Lot Q/Abitare project. Another variation of Scenario 10 would be for the leasable building space to begin on the second or higher floors, with parking occupying the lower levels (such as the single room occupancy project that was discussed in conjunction with Lot If neither the surface nor above-grade levels were used for parking, the .cost of placing all existing surface parking under- ground would substantially increase the’estimated $34,600 per added stall for~Scenario i0. However, it would be expected that the cost of replacing existing parking, and some portion of the cost of constructing any new public parking, would be borne by the surface or air rights development. It would not be reasonable for the City to pay more for new public parking associated with a building development on its own parking lot, than it would pay without such a development. It might even be feasible for the cost of public parking to be subsidized by the air r~ghts developer, thus lowering the $34,600 estimate. Notwithstanding these variables, it wili be assumed in ~his study that the cost of Scenario I0, providing new public parking stalls under an existing City lot, is $34,600 per added_stall,_whether_or_not_~here_isan~associated_surface_orair rights development. To summarize the above cost analysis, Table 1 is repeated below showing the cost per stall for each feasible scenario. pkg\inluapp.4 September S, 1994 Page TABLE SUMMARY OF COST OF FEASIBLE PARKING SCENARIOS IN THE UNIVERSITY ¯ AVENUE PARKING ASSESSMENT DISTRICTI TYPE OF P~J~KING FACILITY Surface Parking Lot Single Elevated Deck Multilevel Structure (may include base- ment level) Two-Level Under- ground Garage--under existing City park- ing lot or under private building BUILT ON/UNDER EX- ISTING CITY PARKING LOT (1) Already exists BUILT ON PRI- VATE LAND (FOR SALE TO CITY INCLUDING LANDCOST) (2) Would not be built (5) Would not be built (8) $20,500/stall (11) $34,200/stall BUILT ON PRI- VATE LAND (FOR SALE TO CITY NOT INCLUDING LAND COST) (3) Would not be. built (6) Would not be built (9) $13,000/stall ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 1. Cost/stall is based on the total number of stalls in the facility. Table A-2 is a summary of cost per stall .for the four scenarios determined in Step 2 of this study to be most appropriate for implementation in the Assessment District. TABLE A-2 FOUR MOST APPROPRIATE PARKING SCENARIOS IN THE UNIVERSITY AVENUE ASSESSMENT DISTRICT AND THEIR COSTS SCENARIO NAME (NUMBER) Single Elevated Deck on city Lot (4) Multilevel Structure on City Lot (with or without 1st floor retail) (7) Two-level Underground Garage Under Private ............. Building (12) ................. Twomlevel Underground Garage Under City Lot (parking on surface and/or with air rights) (I0) COST/ADDED -STALL $26,700 $17,300. $28,000 $34,600 pkg~inluapp.4 September S. 1994 Page A-5" DISCUSSION OF ALTERNATIVE FEE OPTIONS The projects in Table A-2 cover a cost range of $17,300 to $34,600 per added parking stall° Based on Table 3 of the study and Table A-2, several alternatives for the amount for the in-lieu fee are presented and discussed below° As discussed in Step 5 of the study, a 10 percent bond issuance cost should be included in the in-lieu fee. TABLE A-3 ALTERNATIVES FOR AMOUNTOF IN-LIEU FEE ALTERNATIVE COST/ADDED STALL COST/ADDED STALL INCLUDING .10% B~ND ISSUANCE COST 1.Fee Based on Lowest Cost Project $17,300 $19,000 2.Fee Based on Highest Cost Project $34,600 $38,100 3.Fee Based on Average Cost of Nine $26,500 $29,200Projects in Table 3 4.Fee Based on Cost of Multilevel $17,300 $19,000Structure i. Fee Based on Lowest Cost Project--S19,000. This is the recommended amount, for the in-lieu fee. Only the lowest cost project (multilevel strdcture) could be funded without underfunding the specified number of spaces. 2. Fee Based on Hiqhes~’Cost Project--S38,100. If the in-lieu fee were established at this level, no parking project envisioned in this study would be underfunded. However, it could be unfair to an individual property owner who wishes to develop a downtown property and, if the owner were not able to provide the required parking, would have to pay a fee that might be higher than.needed. 2. Fee Based on Averaqe Cost of Nine Projects in Table 3--$29jR00. On an average basis, this fee would fund construction of the number of spaces for which the fee Was collected, without underfunding. As with any average, however, there is the probability of..a mismatch between the average and the actual~ 4. Fee Based on Cost of Multilevel Structure--S19,000. .This is the recommended amount for the in-lieu fee° Only the multilevel structure could be funded without underfunding the specified number of spaces. This option differs in P~nciple__$rom option 1 in ~hat option 4 i~--bas~d-~--the cost of. a multilevel structure, which happens to also be the lowest cost project pkg\inluapp.4 September S, 1994 Page IMPACTS OF UNDERFUNDING AND oVERFUNDING A PARKING PROJECT Underfunding The following example provides some insight into the consequences of establishing the in-lieu fee at an amount that turns out, after the fact, to be less than the cost to build an in-lieu stall. As sume:1.In-lieu fee is established at $19,000 per re- quired stall--based on the estimated cost per added stall to construct a multilevel parking structure. Over the next five years, in-lieu fees are col- lected from development projects for 50 stalls at $19,000/sta11, for a total of $950,000 (for simplicity, assume that no interest is earned}. A 450-stall 5-1evel structure is built five years from now, at a total cost of $7.2 million, or $16,000 per stall. 50 of these stalls are desig- nated to be funded by the in-lieu fees collected for 50 stalls ($950,000). The existing lot on which the structure is built has 110 stalls, so each added stall costs $7.2 million/(450-110) = $21,200, which is $2,200 per stall more than the amount established for the in-lieu fee. The following table shows the impact on Assessment District fees for the above case: " .Approximate Annual Amount to be Paid by All Property Own- ers Through a New Parking Assessment District for the New Structure (assumes 25¯year bond, 7.5% interest, 10% cost of issuance and reserve) A. Assessment of full project amount; no in-lieu fees collected-- $7,200,000 B. Assessment of full project amount less in-lieu fees collected at $19,000/stall ($950,000)-- $6,250,000 C. Assessment of full project amount less in-lieu fees that would have been collected if fee had been equal to cost per added stall (50 x - $21,200 = $i,060,000)--$6,140,000. $0.334/square foot $0.290/square foot $0.285/square foot This example shows that the inadvertent shortfall of $2,200 per required stall for the in-lieu fee, when applied to the construc- tion of 50 in-lieu stalls in a parking structure, is passed on to all downtown property owners as an increased assessment of $0.005 per square foot ($0.290 -~$0.285). Existing assessments total approximately $0.30 per square foot. "The incremental financial consequence of collecting an in-lieu fee that turns out to be insufficient, when spread out over the full assessment district and financing period, is relatively small. In return for this small increased assessment which, quite" possibly, may not actually materialize, the businesses, Property owners and general public realize the following benefits from provision of in-lieu parking spaces: (a) public usage of the in-lieu stalls usually results in more intensive use of these stalls (i.e., greater turnover) than if they were reserved for a particular business; (b) a lower in-lieu fee helps encourage some beneficial development .or changes in use that developers might otherwise feel is not economically feasible. Overfund~ If the in-lieu fee collect~d per required stall turns out, after the fact, to be mor__e than the cost of an in-lieu stall in the parking project described in the above example, the excess woi~d be deducted from the cost of the remainder of the parking project not financed by in-lieu fees. The assessment to be paid by all property owners for this project would therefore be incrementally ~owe[ by an amount similar to the above example, than it would otherwise have been assessed if it weren’t for the excessive in- lieu fee. In this manner, the entire assessment district, rather ..than the individual, property owners who paid for the in-lieu spaces, receives the "refund" from the overfunding of the in-lieu spaces. It has been concluded that a refund procedure for the in- lieu payers would be too Cumbersome to administrate efficiently. This would be especially true if the refunded assessments were made several years after their_payment, and/0r a property owner making the original payment no longer owned the property. ¯ .pkg~inluapp.4 S©ptembet-8, 1994 -~ag~ A~8 ©+1