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HomeMy WebLinkAboutDowntown Parking In Lieu Fee - District 1 of the Downtown Sp 0 CITY OF HUNTING TON BEACH ttbInter-Department Communication Planning and Building Department TO Honorable Mayor and City Council Members VIA Fred A Wilson City Administrator FROM Scott Hess AICP Director of Planning and Buildin� Stanley Smalewitz, Director of Economic Development DATE July 19, 2010 SUBJECT Downtown Parking In-Lieu Fee Program—Item No 12 on the July 19 City Council Agenda Based on feedback provided by the Building Industry Association (BIA) of Southern California the following changes a c recommended to the draft Downtown Specific Plan Parking In-Lieu Fee anti Implement ration Plan Resolution (City Council Resolution No 2010-49) provided as Attachment No 1 to the City Council RCA The evised sectio�ts reflect the following • Change to the annual adjustment of fees based on the Caltrans Construction Price Index (new recommendation) rather than the Consumer Price Index (original recommendation), and • Change to the recommended interest rate based on the Fed Funds Rate plus 500 (new revornmendation) rather than the Wall Street Journal plus 2 percent (original recommendation) The recommended interest rate reflects a below market rate that would mcentivize new development and expansion of existing downtown businesses The revised language of the resolution would read as follows SECTION I The City Council hereby sets an in-lieu parking fee of $27 350 00 per parking space as required by Section 3 2 26 11 of the Downtown Specific Plan The fee shall be automatically adjusted on October lit of each year by the amount of percentage increased or decreased (not to exceed 3%) in the 3-year rolling average of the Annual California Department of Transportation Price Index for Selected Highway Construction Items beginning with a baseline index of 244 8 SECTION 2 (a) The fee may be paid in a lump sum, or on a maximum of up to a 15-year term, subject to a variable annual interest rate equal to that of the Fed Funds Rate plus 500 basis points The interest rate shall be set on October I of each fiscal year All agreements signed during the fiscal year shall use the October I set rate of interest If on the G\AdmLtr\20I0\07l9y,2(Parking In lieu Program Late Communication)doc I 7 l G J r following October 1 the interest rate is changed, the next year s billing for all parties would be based on the new interest rate The powerpolnt presentation is provided as an attachment to this communication Attachment 1 Powerpomt Presentation SH HF JV jr xc Bob Hall Deputy City Administrator Kellee Fritzal Deputy Director Economic Development Herb Fauland Planning Manager Luis Gomez Economic Development Project Manager Jenmfer Villasenor Acting Senior Planner Jan Richards Administrative Assistant Cathy Fikes Administrative Assistant G\AdmLtr\2010\0719jv2(Parking In lieu Program Late Communication)doe 2 Council/Agency Meeting Held _ Q Deferred/Continued to Approved �Co ditionally Approved 0 D Hied C CI rk s ignatur 7 nx�Council Meeting Date July C20Y.� 10 1Departm t Number 10 015 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO Honorable Mayor and City Council Members SUBMITTED BY Fred A Wilson City Administrator PREPARED BY Scott Hess AICP Director of Planning and Building Stanley Smalewitz Director of Economic Development SUBJECT Adopt Resolution No 2010-49 amending the Downtown Parking In- Lieu Fee and updating the Downtown Parking In-Lieu Fee Implementation Program Statement of Issue Transmitted for your consideration is an update to the Downtown Parking In-Lieu Fee Program The proposed fee amendment would increase the current fee from $17 297 86 per space to $27 350 00 The proposed amendments to the implementation program would expand use of the fees to allow for implementation of parking programs identified in the Downtown Specific Plan and Downtown Parking Study that would contribute to the provision of additional parking opportunities in the downtown core area Financial Impact Not applicable Recommended Action Motion to Adopt Resolution No 2010-49 A Resolution of the City Council of the City of Huntington Beach Adopting an In-Lieu Parking Fee and Implementation Plan for District 1 of the Downtown Specific Plan (Attachment No 1) Alternative Action(s) The City Council may make the following alternative motions 1 Deny Resolution No 2010-49 for the update to the Downtown Parking In-Lieu Fee Program 2 Continue Resolution No 2010-49 and direct staff accordingly REQUEST FOR COUNCIL. ACTION MEETING DATE 7/06/2010 DEPARTMENT ID NUMBER PL 10-015 Analysis A PROJECT PROPOSAL Applicant City of Huntington Beach Location Downtown Specific Plan area — District 1 (Attachment No 2) The Downtown Specific Plan (DTSP) and the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) include provisions for payment of parking in-lieu fees for property owners that are not able to meet on-site parking requirements The request to participate in the program requires concurrent approval of a conditional use permit for the establishment of a new use or intensification of an existing use The proposed changes to the Downtown Parking In-Lieu Fee Program would amend the current fee and update the existing implementation measures Below is a summary of the key components of the proposed changes which are discussed in more detail under Section C of this report Measure Existing Pro ©sed Fee $17 297 86 (plus yearly $27 350 00 (plus CPI) adjustment based on Consumer Price Index (CPI)) Terms Lump sum or annual payments Lump sum or annual payments up up to 15 years to 15 years and annual interest rate if paid in yearly installments Location Downtown Parking Master Plan District 1 of the DTSP area area Use of fees Creation of additional parking Creation of additional parking spaces through valet striping spaces and parking opportunities spaces or construction of parking through valet striping of spaces spaces shuttle trolley construction of spaces and associated design costs other similar programs B BACKGROUND The Downtown Parking In-lieu fee was established in 1993 for certain properties within the Downtown Parking Master Plan area Property owners had the ability to pay the fee over a fifteen year period with the Redevelopment Agency contributing matching funds ($6 000 per space) for a total payment of$12 000 per space ($800/year @ 15 years) The following year the Redevelopment Agency approved a resolution establishing nine implementation measures for the Parking In-Lieu Fee The measures identified the fee process payment schedule responsibilities and use of the in-lieu fee In November 1995 the City Council repealed the existing resolutions and adopted two new resolutions establishing the fee and clarifying the process responsibilities and implementation for participation in the program This was done in part due to the Redevelopment Agency s decision not to participate in the program often due to lack of funds needed to match the property owners contribution Also since the existing resolution only REQUEST FOR COUNCIL ACTION MEETING DATE 7/06/2010 DEPARTMENT ID NUMBER PL 10-015 identified certain properties in the downtown the new resolution allowed anyone in the master plan area the ability to participate in the program The new resolution clarified the implementation measures including clearly stipulating property owner/Redevelopment Agency participation timing and type of entitlements payment schedules penalties for non- payment security mechanisms for future payments and collection and use of the fees At the time the in-lieu fee was established at $12 000 00 per space with a yearly adjustment based on the Consumer Price Index (CPI) The current in-lieu fee is $17 297 86 Neither the in-lieu fee nor the implementation program has been updated since 1995 The City has approved in-lieu fees for 275 parking spaces since the inception of the program although it should be noted that some uses were not implemented As of March 2010 the City has collected $1 016 801 16 in parking in-lieu fees To date approximately $500 000 00 of in-lieu funds has been used toward the $950 000 00 purchase of 25 tandem parking spaces in the Strand parking structure During the recent Downtown Specific Plan Update process the Council directed staff to evaluate the in-lieu fee program and present recommendations for an update to the program in order to more effectively manage the supply and demand of parking in the downtown core area C STAFF ANALYSIS AND RECOMMENDATION In-Lieu Fee One of the challenges in establishing an appropriate in-lieu fee is to ensure that the fee is set to allow for the development of parking spaces or implementation of other programs to accommodate the parking demand as development occurs while not being so high as to discourage development in the downtown The objectives of the Downtown Specific Plan Update clearly call for standards and policies that incentivize development and encourage community investment The recent City Council adopted Downtown Specific Plan Update states that the parking in- lieu fee amount should reflect the market-rate cost of constructing an actual parking space The City conducted an analysis to estimate the cost of developing parking stalls under current market conditions (refer to Attachment No 3) The conclusions of the cost analysis indicate that the average cost of developing parking is $54 697 00 per parking space This figure is a blending of various parking facility types (including at-grade surface parking above grade structure parking and subterranean structure parking) and includes design construction and cost of land adjusted to Downtown Huntington Beach land values The table below summarizes the various costs per stall based on parking facility type Parking Stall Cost Analysis Parking Type Location Analyzed Project Cost Stalls $/Stall 1st and Atlanta HB (not Surface Parking Lot constructed) $3 034 875 45 $67 442 City of Claremont Village Above Grade Structure Parking Structure (2006) $15 986 250 477 $33 514 Santa Ana Civic Center Above Grade Structure Parking Structure (2007) $12 337 250 301 $40 988 Strand Parking Garage Below Grade Structure HB (2008) $33 581 094 437 $76 845 Average Cost Per Stall $54 697 REQUEST FOR COUNCIL ACTION MEETING DATE 7/06/2010 DEPARTMENT ID NUMBER PL 10-015 The current in-lieu fee of $17 297 86 represents approximately one-third of the average cost of constructing a parking space Staff is recommending that the in-lieu fee be increased to $27 350 00 which represents approximately one-half of the average cost of constructing a parking space Staff is recommending the fee be established at $27 350 00 for several reasons that are discussed below Shared Parking Concept The shared parking concept of the Downtown Specific Plan is based on the principle that a parking facility is shared among multiple uses and destinations such that one parking space would serve two or more businesses that are within close proximity of one another Shared parking effectively reduces the number of parking spaces that would otherwise be required by a specific stand-alone use since one parking space is utilized by multiple uses with different peak demand hours or by multiple businesses with the same patrons A property owner proposing to pay in-lieu fees as an alternative to providing the minimum number of required parking spaces on-site would be contributing money toward the provision of parking that is available to the general public for all uses within proximity of the parking facility not necessarily for the exclusive use of his/her development Various publications on shared parking and parking in-lieu fees indicate that public parking facilities serving multiple uses can result in one public parking space being the equivalent of 1 5 to 2 5 private parking spaces The recommendation for the in-lieu fee to be one-half of the average cost to construct a parking space is appropriately within this range in that one public parking space could be provided for every two required private spaces for which fees are collected DTSP Goals and Objectives The updated Downtown Specific Plan (DTSP) states that the in-lieu fee should reflect the cost of constructing an actual parking space however it is not recommended that the fee be increased to equal the full construction cost of one space since as stated above the resulting parking space would be shared among multiple uses and not for the sole private use of the developer paying the fee In addition a $54 697 00 per space in-lieu fee would likely stifle development and redevelopment downtown which is contrary to the goals and objectives of the DTSP update As an example in 2009 a CUP was approved for an expansion of BJ s Pizza at their downtown location with participation in the in-lieu fee program for five parking spaces If the in-lieu fees reflected the actual construction cost of a space BJ s would have had to pay over$273 000 00 in parking in-lieu fees Although the fee is recommended to increase by approximately $10 000 00 it should be noted that according to the cost analysis in Attachment No 3 the fee would still be less than the cost of constructing an actual parking space even for surface parking spaces and at-grade structures In addition shared parking concepts in the Downtown Specific Plan area are reflected through reduced parking ratios as well as parking in-lieu fees The approved reduced parking ratios for the Downtown Specific Plan District 1 area consider the mixed use nature of the downtown core and represent a 20-50 percent reduction in the citywide minimum parking requirements The reduced ratios are an inherent cost savings to a developer because the number of spaces that a developer must pay fees for is initially less than it would be without the benefit of the reduced parking ratios REQUEST FOR COUNCIL ACTION MEETING DATE 7/06/2010 DEPARTMENT ID NUMBER PL 10-015 Use of Fees Currently the parking in-lieu fees can only be used for the provision of physical parking spaces However with little available land to build on the provision of physical parking spaces can be difficult to achieve in all cases In addition the September 2009 Downtown Parking Study recommends expanding the utilization of in-lieu fees to include measures that would function to manage the parking supply more efficiently downtown such as implementing a shuttle from remote lots The study also recommends use of the in-lieu fees for implementation of measures to reduce parking demand which is becoming increasingly common in urban areas and downtowns Staff is recommending that the use of in-lieu fees be expanded to allow for other programs that would create parking opportunities downtown and allow the City to manage the demand and supply of parking more efficiently The City is currently exploring and in the process of implementing several parking projects in the downtown area such as ® Shuttle Program — A new shuttle system using the City Hall parking lot as a remote parking area has recently been implemented The shuttle system adds an additional 350 parking spaces during the peak days of the year ® Valet Parking — The Planning and Building Department is currently processing a request for a conditional use permit to implement a master valet program for the Main Street Promenade and Plaza Almeria parking structures that could result in 33 additional parking spaces The Zoning Administrator is scheduled to consider this request in June 2010 ® Bike Valet — The Planning and Building Department is currently processing a conditional use permit request to implement a seasonal bike valet program for the downtown area The program would add 150 — 400 bicycle spaces during the peak days of the year The Zoning Administrator is scheduled to consider this request in June 2010 ® Street Re-striping — The Public Works Department has evaluated the potential to re- stripe on-street parking spaces in the downtown area that could yield 23 new parking spaces ® Parking Lot at 1st/Atlanta — The City is currently considering options for development of a parking lot or temporary parking lot on a City-owned parcel at 1st Street and Atlanta Avenue The parking lot could potentially yield 45 new parking spaces and is anticipated to be implemented by summer 2011 The recommendation to allow in-lieu fees to fund the types of programs listed above would result in the potential for approximately 450 additional parking spaces and 150 — 400 additional bicycle spaces in the District 1 area of the Downtown Specific Plan area in the next several years Although the existing in-lieu fee program allows use of the fees for some of the projects listed such as valet and street re-striping other parking programs could not be funded under the current structure of the in-lieu fee program In addition it is recommended that the in-lieu fee program be extended to fund associated design and engineering costs of providing physical parking spaces Programs such as the valet parking and a remote lot shuttle are also more affordable to operate and range from approximately $300 00 per space (for valet) to approximately REQUEST FOR COUNCIL ACTION MEETING DATE 7/06/2010 DEPARTMENT ID NUMBER PL 10-015 $3 200 00 per space (for shuttle) over a 20-year operational period This is another reason why staff is recommending the proposed fee rather than a fee equivalent to the full cost of constructing a space since the fees would also be used to fund these lower cost programs Survey of Other Cities While not a specific reason for recommending the proposed per space fee of$27 350 00 it should be noted that the proposed in-lieu fee would be in line with other coastal city parking in-lieu fees The table below provides an example of comparable in-lieu fees for other California coastal cities City In-lieu fee (per space) Laguna 06acE -- �� 7 AAW$20,000 Hermosa Beach $29 500 "OVentura 9mm $24,445 n Manhattan Beach $28 937 P sn o Beach, # 00W, i $36,0W Source May/June 2010 phone call to jurisdiction planning dept Implementation Program The most significant change to the implementation program is the recommendation to expand the use of in-lieu fees as discussed in the previous section Other recommended changes include the location payment terms and interest rate Staff is recommending that use of the in-lieu fees be for the provision of parking within the District 1 area of the DTSP Currently participation in the in-lieu fee program and use of the fees is limited to the nine- block Downtown Parking Master Plan area The updated Downtown Specific Plan eliminates the Downtown Parking Master Plan and instead specifies parking standards for the District 1 area of the DTSP Since the parking in-lieu fees and reduced parking ratios are part of the parking standards specific to District 1 it is appropriate that use of the in-lieu fees be limited to the provision of parking in District 1 of the DTSP Staff is recommending that the in lieu fee be adjusted annually according to the consumer price index (CPI) The CPI adjustment will allow the in lieu fee to fluctuate according to changes in the economy Staff continues to recommend that payment terms be up to a maximum of 15 years which is consistent with current policy Payment terms shall be determined at the discretion of the Director of Economic Development and based on an analysis of the proposed projects financial needs Finally Staff recommends that the Wall Street Journal Prime Interest Rate plus two percent at the time an agreement is executed be applied to fees that are not paid in one initial lump sum on a yearly basis Given that consumer lending rates fluctuate daily an interest rate benchmark is needed Staff feels that the Prime Interest Rate plus two percent is justifiable since the interest rate formula will self-adjust to the economy and is widely used by banks to set rates on many consumer loan products REQUEST FOR COUNCIL ACTION MEETING DATE 7/06/2010 DEPARTMENT ID NUMBER PL 10-015 D SUMMARY Staff has evaluated the current downtown parking in-lieu fee program and is recommending the City Council approve the following changes to the program 1 Increase the current fee to $27 350 00, which will sufficiently enable the City to provide additional parking opportunities and manage the supply and demand of parking in the downtown while still providing an incentive for development and redevelopment of the downtown core area 2 Expand the use of in-lieu fees to allow for parking programs that would provide additional parking opportunities or reduce the parking demand in the downtown as well as associated design and engineering costs for the development of parking spaces and 3 Maintain the current practice of applying an annual CPI adjustment to the fee (not to exceed three percent) and apply a yearly interest rate to fees that are paid in annual installments Environmental Status The Parking In-Lieu Fee Program update is exempt under Section 15061(b)(3) of the California Environmental Quality Act guidelines which exempts activities where it can be seen with certainty that there is no possibility that the activity may have a signrficant effect on the environment Strategic Plan Goal Maintain improve and obtain funding for infrastructure and equipment Attachment(s) 1 Resolution No 2010-49 A Resolution of the City Council of the City of Huntington Beach adopting an in-lieu parking fee and implementation plan for the Downtown Specific Plan 2 Map of Downtown Specific Plan—District 1 3 Parkin In-Lieu Fee Analysis— Economic Development Department dated April 8 2010 -807- ATTACHMENT # 1 9. RESOLUTION NO 2010-49 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ADOPTING AN IN-LIEU PARKING FEE AND IMPLEMENTATION PLAN FOR DISTRICT I OF THE DOWNTOWN SPECIFIC PLAN WHEREAS, the Downtown Specific plan provides that parking requirements may be met by payment of an `in-lieu' fee pursuant to Section 3 2 26 11 of the Downtown Specific Plan and Section 231 10 of the Huntington Beach Zoning and Subdivision Ordinance and The City Council has determined that an in-lieu parking fee is necessary to create future parking opportunities, and to facilitate vehicular traffic and pedestrian movement as part of the Downtown Specific Plan and The Downtown Specific plan requires business owner(s) to provide parking for a new commercial use in District 1 if fifty-percent or more of an existing non-conforming structure is demolished and reconstructed The parking requirements may be met by payment of an in-lieu fee, and The fee creates opportunities for additional parking including but not limited to programs such as valet re-striping shuttle trolley and other similar programs resulting in the provision of additional parking or construction of surface or structured parking and associated design costs in District 1 of the Downtown Specific Plan, and A plan for implementation and allocation of the fee is necessary to effectuate the program NOW THEREFORE BE IT RESOLVED by the City Council of the City of Huntington Beach as follows SECTION 1 The City Council hereby sets an in-lieu parking fee of $27 350 00 per parking space as required by Section 3 2 26 1 1 of the Downtown Specific Plan The fee shall be automatically adjusted on October V of each year by the amount of percentage increased or decreased (not to exceed 3%) in the 3-year rolling average of the Annual California Department of Transportation Price Index for Selected Highway Construction Items beginning with a baseline index of 244 8 SECTION 2 (a) The fee may be paid in a lump sum, or on a maximum of up to a 15-year term, subject to a variable annual interest rate equal to that of the Fed Funds Rate plus 500 basis points The interest rate shall be set on October I of each fiscal year All agreements signed during the fiscal year shall use the October 1 set rate of interest If on the following October I, the interest rate is changed the next year s billing for all parties would be based on the new interest rate 10 2506 00-)/:)0342 1 Resolution No 2010-49 (b) Any private property owner who requests to participate in the In-Lieu Parking Fee Program shall submit an application for a conditional use permit, which shall be presented to the Planning Commission for review and approval The conditional use permit application shall request the establishment of the proposed use, indicate the number of parking spaces required for the proposed use, and the proposed extent of participation in the In-Lieu Parking Fee Program (c) A conditional use permit application shall be accompanied by a draft In-Lieu Parking Fee Agreement specifying the total number of parking spaces required, the amount of spaces to be provided by payment of the in-lieu fee, the total in-lieu fee payment the proposed payment schedule if applicable the mechanism to secure subsequent annual payments (for instance a bond or a secured lien recorded against the property) and any other terms and conditions deemed appropriate by the City If the conditional use permit is approved, the Agreement shall be reviewed and approved as to form and content by the City Attorney prior to recordation with the County of Orange The Agreement shall run with the land A copy of the recorded document shall be submitted to the Planning and Building Department for inclusion in the subject file prior to issuance of a Certificate of Occupancy or building permit whichever occurs first (d) If the conditional use permit application is approved the private property owner may submit a written request for financial participation to the Redevelopment Agency The Economic Development Department shall process the request for the Agency's financial participation and present it to the Agency for consideration The Redevelopment Agency may or may not agree to provide financial participation at its sole and absolute discretion If the Redevelopment Agency agrees to financially participate the percentage of financial participation shall be included along with any other terms and conditions, in a Financial Participation Agreement between the private property owner and the Agency A copy of the Financial Participation Agreement shall be reviewed by the Agency Counsel and submitted to the Planning and Building Department for inclusion in the conditional use permit file prior to issuance of a Certificate of Occupancy or building permit, whichever occurs first (e) Payment of the in-lieu fee shall be the responsibility of the private property owner The in-lieu parking fee shall apply only to private property, not public property (f) In the event of installment payments the first payment shall be made by the private property owner prior to issuance of a Certificate of Occupancy or building permit whichever occurs first Subsequent payments may be made on an annual basis upon the one-year anniversary of the first payment Payments shall be received no later than 30 days after the due date Failure to pay in a timely manner may result in revocation of the conditional use permit and foreclosure upon the security mechanism as provided in the In-Lieu Parking Fee Agreement Notification to the private property owner of each annual payment shall be provided by the City Treasurer 10 2506 OO /A342 2 Resolution No 2010-49 (g) The City Treasurer shall deposit all fees collected from the property owner in a separate fund The funds shall be used only for creating opportunities for additional parking including but not limited to, programs such as valet, re-striping shuttle trolley and other similar programs resulting in the provision of additional parking or construction of surface or structured parking and associated design costs in District 1 of the Downtown Specific Plan (h) Subsequent to conditional use permit approval for participation in the In-Lieu Parking Fee Program a change of use located on the same parcel or within the same suite may only be permitted if the approved number of parking spaces does not increase SECTION 3 Implementation of the In-Lieu Parking Fee Program shall be the responsibility of the Departments of Planning and Building and Economic Development SECTION 4 If the Redevelopment Agency approves a Financial Participation Agreement, the Agency shall provide all documents necessary to effectuate its participation and forward the documents to the Planning and Building Department for inclusion in the conditional use permit file SECTION S The Director of Planning and Building or his/her assignee is authorized to execute documents (unless otherwise noted) to effectuate the above implementation measures and the In-Lieu Parking Fee Program SECTION 6 City Council Resolutions No 6720 and 6721 are hereby repealed PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 19thday of July 2010 M or REVIE D APPROVED INITIAT D AND APPROVED City dYistrator Director of Plannmg and Building APPROVED AS TO FORM Ci Attorney 10 2A6 00�,h0342 3 Res No 2010-49 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH I JOAN L FLYNN the duly elected qualified City Clerk of the City of Huntington Beach and ex-officio Clerk of the City Council of said City do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on July 19, 2010 by the following vote AYES Carchio Hardy Bohr Dwyer Hansen NOES Green ABSENT Coerper ABSTAIN None Vy Clerk and ex-offs Clerk of the City Council of the City of Huntington Beach California ATTACHMENT #2 Downtown Specific Plan District 1 ® Downtown Core area pig LE 2 < ~ �t �Y x YAv p > z », e r Legend , 1 Downtown Core Muted Use OSpecific Plan Boundary / „�✓ Parcels f to ATTACHMENT #3 PARKING IN-LIEU FEE ANALYSIS ECONOMIC DEVELOPMENT DEPARTMENT Parking In-Lieu Fee Program The Parking In-Lieu Fee Program allows property owners to request to pay an in- lieu fee when unable to provide the required number of parking spaces onsite The current Parking In-Lieu Fee is $17 297 86 per stall Per the Downtown Specific Plan (DTSP) Update the Parking In-Lieu Fee Program applies only to commercial development or the commercial portion of mixed use projects to satisfy some or all of the required parking off-site City Council requested information regarding the in-lieu fee especially the market rate of a parking stall and uses of the in-lieu fees Market Rate Value Jointly the Economic Development and Public Works Departments worked to determine the current market-rate value of constructing an additional parking stall in the downtown area The determination was made by estimating the most probable cost of developing parking stalls under current market conditions This formula also includes land cost along with all the costs associated with a parking facility ready for opening The average cost of developing at-grade above-grade and subterranean facilities in the downtown area including estimated land cost is $54 697 based on the review of cost estimates/budgets for parking facilities located in Huntington Beach and nearby cities Cost information reviewed includes the following (i) A cost estimate to develop a 45-stall at-grade parking lot at the intersection of 1st Street and Atlanta Avenue (ii) Actual cost to develop the 477-stall above-grade City of Claremont Village Parking Structure (iii) Actual cost to develop the 301-stall above-grade Santa Ana Civic Center Parking Structure and (iv) Actual cost to develop the 437-stall below-grade Strand Parking Structure Project costs include land cost estimated at $125 per square foot design cost and construction cost at prevailing wage rates For the Strand Parking Structure land cost was assumed at 25 percent ($31 12 per square foot) of the $125 per square foot estimate given the surface of the subterranean facility was developed 1 of 4 4/8/2010 PARKING IN-LIEU FEE ANALYSIS ECONOMIC DEVELOPMENT DEPARTMENT Table 1 Parking Stall Cost Analysis Parking Type Location Analyzed Project Cost Stalls $/Stall Surface Parking Lot 1st and Atlanta HB $3 034 875 45 $67 442 Above-Grade City of Claremont Village Structure Parking Structure $15 986 250 477 $33 514 Above Grade Santa Ana Civic Center Structure Parking Structure $12 337 250 301 $40 988 Below-Grade Structure Strand Parking Garage HB $33 581 094 437 $76 845 Average Cost Per Stall $54 697 See Table 1 attachment for details Parking In-Lieu Fee Use of Funds Existing Resolutions No 6720 and No 6721 state that all in-lieu fee revenue shall be used for creating opportunities for additional parking (e g valet re-stripping etc ) or construction of surface or structured parking in the DTSP area It is recommended that the Resolutions be expanded to allow additional parking- related expenditures such as but not limited to • Valet parking programs • Commercial parking lots within the DTSP area • Remote parking lots with shuttle service • Parking facilities at- above- and below-grade using any type of technology including mechanical • Joint public/private partnerships whereby developers provide project specific parking capacity beyond the required entitlement for a fee and • Entitlement design engineering grading landscaping and/or constructing any proposed public parking facility in the downtown The implementation of the parking improvement strategies identified above will act as an alternative relief to parking shortages in the downtown area City Staff is currently pursuing a remote lot/shuttle program and a valet program During peak season (summer weekends) the City Hall parking lot and shuttle program is expected to accommodate up to 350 vehicles and the valet parking program is expected to increase parking capacity in the downtown area by approximately 17 stalls For both programs the estimated program implementation cost is $45 000 and the average cost per stall for a twenty-year operational period is $3 096 2 of 4 4/8/2010 PARKING IN-LIEU FEE ANALYSIS ECONOMIC DEVELOPMENT DEPARTMENT Table 2 Parking Improvement Strategy Program Costs Improvement Peak Parking Program $/Stall Program Stall Equivalent Implementation Cost (20 Year Operation) Remote Lot(City Hall) and Shuttle Program 350 $40 000 $3 232 Valet Parking at Main Promenade 17 $5 000 $294 Total 367 $45 000 $3 096 See Table 2 attachment for details In-Lieu Administration The DTSP area is a Redevelopment Project Area The Economic Development Department Is involved In a proactive strategy to have developers provide parking spaces beyond the required entitlement similar to the Strand Parking Garage To encourage this approach Economic Development recommends that the Planning Department determines and collects the in-lieu fees Economic Development should administer the funds given that Economic Development works directly with the development community and will be responsible for implementing parking improvement strategies Pricing and Payment Recommendations 1 Revised in-Lieu Fee — Increase the in-lieu fee from $17 297 86 per stall to $27 350 per stall which equates to 50 percent of the average market rate of developing at-grade above-grade and subterranean facilities in the downtown area Increasing the fee to the full market rate of $54 700 is not recommended given the mixed use nature of the downtown creates a beneficial shared parking environment Additionally the recommended rate shall encourage the use of the In-Lieu Fee program by developers thus providing funding to develop future City parking facilities and implement effective parking improvement strategies 2 Payment Terms — Developers participating in the Parking In-Lieu Program shall have the option to pay the in-lieu fee in full or on a fifteen-year term subject to interest charges as described below Interest Fees — Developers choosing to pay the in-lieu fee over an extend term shall pay an annual interest rate equal to that of the Wall Street Journal Prime Rate plus 2 percent at the date the Parking In Lieu Fee Agreement is executed For example the Prime rate for the week of 3/31/2010 is 3 25 percent If a Developer executed an In-Lieu Fee Agreement on 3/3 112 0 1 0 the contract interest rate would be 5 25 percent The interest fee will be 3 of 4 4/8/2010 PARKING IN-LIEU FEE ANALYSIS ECONOMIC DEVELOPMENT DEPARTMENT added to the Parking In-Lieu Fee balance annually on the month following the anniversary date of the In-Lieu Payment Agreement The Wall Street Journal Prime Rate is an average of what the 30 largest banks will lend money to their most favored customers it is a tool which is used by banks to set rates on many consumer loan products Construction loans are usually variable-rate loans priced at a spread to the prime rate or some other short-term interest rate 4 of 4 4/8/2010 PARKING IN-LIEU FEE ANALYSIS ECONOMIC DEVELOPMENT DEPARTMENT Table 1 Parking Facility Cost Parking Type Location Analyzed Year Constructed Stalls Development Cost Land Cost Total Cost $/Stall Surface Parking Lot 1st and Atlanta HB 2011 45 $416 000 $2 618 875 34 $3 034 875 $67 442 City of Claremont Village Above Grade Structure Parking Structure 2006 477 $10 620 0002 $5 366 250 3 5 $15 986 250 $33 514 Santa Ana Civic Center Above-Grade Structure Parking Structure 2007 301 $8 951 000 $3 386 250 3 5 $12 337 250 $40 988 Below Grade Structure Strand Parking Garage HB 2008 437 $30 352 000 $3 229 094 26 $33 581 094 $76 845 Average Construction Cost Per Stall $54 697 Notes 1 Cost includes entitlement design and construction cost 2 Development cost adjusted to exclude 6 000 square feet of ground floor retail development 3 Assumes land cost at$125 per square foot 4 Footprint based on actual dimensions 5 Footprint based on Main Promenade Parking efficiency ratio of 360 square feet per stall 6 Assumes land value at 25%of actual cost given facility surface remains available for development � � I 1 of 1 PARKING IN-LIEU FEE ANALYSIS ECONOMIC DEVELOPMENT DEPARTMENT Table 2 Parking Improvement Strategy Program Costs Parking Improvement Program 20 Year Operation $/Stall Program Peak Parking Stall Equivalent Implementation Cost Cost (20 Year Operation) Remote Lot(City Hall)and Shuttle Program 350 $40 000 $1 131 187 ' $3 232 Valet Parking at Main Promenade 17 $5 000 $5 000 2 $294 Total 367 $45 000 $1 136 187 $3 096 Notes 1 Assumes an initial operation cost of$40 000 per year with annual 3 5 percent adjustments for inflation 2 Assumes the program is self funding upon initial implementation 1 of 1 4 ® City ®f Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 ® OFFICE OF THE CITY CLERK ® JOAN L FLYNN CITY CLERK July 7 2010 Building Industry Association of So Calif 17744 Sky Park Circle Suite 170 Irvine CA 92614 ATTN Bryan Starr Re Consider a Resolution adopting an In-Lieu Parking Fee and Implementation Plan for District 1 of the Downtown Specific Plan City Council meeting —July 19 2010 The Huntington Beach council will consider an update to the Downtown Parking In- Lieu Fee Program The proposed fee amendment would increase the current fee from $17 297 86 per space to $27 350 00 The proposed amendments to the implementation program would expand use of the fees to allow for implementation of parking programs identified in the Downtown Specific Plan and Downtown Parking Study that would contribute to the provision of additional parking opportunities in the downtown core area The meeting is scheduled for Monday July 19 2010 at 6 00 p m in the Council Chambers of the Huntington Beach Civic Center 2000 Main Street in Huntington Beach For more information please contact Jennifer Villasenor Senior Planner at (714) 374-1661 or JVillasenor(aD_surfcity-hb org Sincerely 4JL Flynn lerk - —J—Vdlasenor Senior-Wanner P-Ianning-and-Buftng - - - - - - Attachment proposed Resolution No 2010-49 Sister Cities Anjo Japan ® Wartakere New Zealand (Telephone 714 536 5227) In-Lieu Parking Fee Analysis City Council Meeting July 19, 2010 /-47Z;� C9MM w,�r,�J Background ■ 1993 — Program established (Res 6522) ■ 1995 — Program expanded and fee increased to $12,000 per space with option to pay over 15-year term and adjusted annually based on CPI (Res 6720 and 6721 ) ■ 2009 — During the Downtown Specific Plan Update process, City Council directed staff to evaluate the program and present recommendations to more effectively manage parking supply in the downtown area ■ 2010 — Current in-lieu parking fee is $17,297 86 Proposed In- eu Fee Program Area - Legend 42NY 1, stn Proposed Boundary gBoundary�~r ------- Existing �,� O� d PatOele � � H Cost Analysis ®ev Land Parking Type Location Stalls Cost Cost $/Stall Surface 1 stand Atlanta, FIB 45 $416k $27619k $677442 City of Claremont Village Parking Above-Grade Structure 477 $101620k $5,366k $33,514 Santa Ana Civic Center Above-Grade Parking Structure 301 $8,951 k $3,386k $40,988 Strand Parking Garage, Below-Grade FIB 437 $30,352k $31229k $767845 Average Cost Per Stall* $54,697 *Reflects total cost of current market valuations for public projects and incorporates land cost, design cost, and construction cost at prevailing wage rates Proposed Chc z-- Wm. WIN\' n` sw� \\ V also.` � vvAvyy Fee $17,297 86 (plus yearly adjustment $27,350 00 (plus yearly adjustment based on 3- based on Consumer Price Index year rolling average of Caltrans Price Index) - (CPI)) fee based on average cost per stall and adjusted per Urban Land Institute's Shared Parking Principle, at a 2 to 1 ratio Terms Lump sum or annual payments up Lump sum or annual payments up to 15 years to 15 years with applied variable annual interest rate (Fed Funds Rate plus 500 basis points) if paid in yearly installments Location Downtown Parking Master Plan District 1 of the DTSP area area Use of fees Creation of additional parking Creation of additional parking spaces and spaces through valet, striping parking opportunities through valet, striping of spaces or construction of parking spaces, shuttle, trolley, construction of spaces spaces and associated design costs, other similar programs Current/Future Uses ■ Downtown Shuttle Program ■ Downtown Bike Valet Program ■ Proposed 1st and Atlanta Parking Lot ■ Downtown Restriping Program ■ Private/Public Partnerships o Strand 5 tn Street t P � RESOLUTION NO 2010-49 4 A RESOLUTION OF THE CITY COUNCIL OF THE CITY/EE HUNTINGTON BEACH ADOPTING AN IN-LIEU PARKIN AND IMPLEMENTATION PLAN FOR DISTRICT 1 OF HE DOWNTOWN SPECIFIC PLAN WHEREAS, the Downtown Specific plan provides that p ing requirements may be met by payment of an "in-lieu" fee pursuant to Section 3 2 26 11 of e Downtown Specific Plan and Section 231 10 of the Huntington Beach Zoning and Subdivisi n Ordinance, and The City Council has determined that an in-lieu parking fee is necessary to create future parking opportunities, and to facilitate vehicular traffic and pedestrian movement as part of the Downtown Specific Plan, and The Downtown Specific plan requires bu ness owner(s) to provide parking for a new commercial use in District 1 if fifty-percent or� re of an existing non-conforming structure is demolished and reconstructed The parkizitional uirements may be met by payment of an "in-lieu" fee, and The fee creates opportunities for a parking, including but not limited to, programs such as valet, re-striping, shuttle trolley, and other similar programs resulting in the provision of additional parking or construction of s face or structured parking and associated design costs in District 1 of the Downtown Specific Plan, and A plan for implementation/and allocation of the fee is necessary to effectuate the program p �'Y p g NOW, THEREFORE,/BBE IT RESOLVED by the City Council of the City of Huntington Beach as follows SECTION 1 the City Council hereby sets an in-lieu parking fee of $27,350 00 per parking space as requred by Section 3 2 26 11 of the Downtown Specific Plan The fee shall be j automatically adjusted on July 1st of each year by the amount of percentage increase or decrease / (not to exceed 3%) in the most recent annual Consumer Price Index for Los Angeles-Riverside, All Urban Consu ers SECTI N 2 i f (a he fee may be paid in a lump sum, or on a maximum of up to a 15-year term, subject to an annual interest rate equal to that of the Wall Street Journal Prime Rate plus 2% at �\ the date the Parking In Lieu Fee Agreement is executed (b) Any private property owner who requests to participate in the In-Lieu Parking Fee Program shall submit an application for a conditional use permit, which shall be presented to the Planning Commission for review and approval The conditional use 10 2506 004/48396 1 Resolution No 2010-49 permit application shall request the establishment of the proposed use, indicat he number of parking spaces required for the proposed use, and the proposed extent of participation in the In-Lieu Parking Fee Program (c) A conditional use permit application shall be accompanied by a draft I/-LieuParking Fee Agreement specifying the total number of parking spaces requir�d.the amount of spaces to be provided by payment of the in-lieu fee, the total in-liefi fee payment, the proposed payment schedule if applicable, the mechanism to sec e subsequent annual payments (for instance, a bond or a secured lien recorded agar the property) and any other terms and conditions deemed appropriate by the Ci If the conditional use permit is approved, the Agreement shall be reviewed a approved as to form and content by the City Attorney prior to recordation wit the County of Orange The Agreement shall run with the land A copy of t e recorded document shall be submitted to the Planning and Building Departme for inclusion in the subject file - ` prior to issuance of a Certificate of Occupancy oar building permit, whichever occurs first � (d) If the conditional use permit application is/ the private property owner may `J submit a written request for financial part�1pation to the Redevelopment Agency The Economic Development Department hall process the request for the Agency's - financial participation and present it to the Agency for consideration The \r� Redevelopment Agency may or mayot agree to provide financial participation at its sole and absolute discretion Ifthe Redevelopment Agency agrees to financially �. participate, the percentage of financial participation shall be included, along with any other terms and conditions, in a/Financial Participation Agreement between the private property owner and the Agency A copy of the Financial Participation Agreement shall be reviewed by the Agency Counsel and submitted to the Planning and Building Department for inclusion in the conditional use permit file prior to issuance of a Certificate of Occupancy or building permit, whichever occurs first 7, (e) Payment of the in-lieu fee shall be the responsibility of the private property owner The in-lieu parking ee shall apply only to private property, not public property (f) In the event of installment payments, the first payment shall be made by the private property owner/prior to issuance of a Certificate of Occupancy or building permit, whichever occurs first Subsequent payments may be made on an annual basis upon the one-year/anniversary of the first payment Payments shall be received no later than 30 days after the due date Failure to pay in a timely manner may result in revocation of the conditional use permit and foreclosure upon the security mechanism as provided in the In-Lieu Parking Fee Agreement Notification to the private property owner of each annual payment shall be provided by the City Treasurer (g) The City Treasurer shall deposit all fees collected from the property owner in a separate fund The funds shall be used only for creating opportunities for additional parking including but not limited to, programs such as valet, re-striping, shuttle trolley, and other similar programs resulting in the provision of additional parking or 10 2506 004/48396 2 Resolution No 2010-49 construction of surface or structured parking and associated design costs in District 1 of the Downtown Specific Plan (h) Subsequent to conditional use permit approval for participation in the Inieu Parking Fee Program, a change of use located on the same parcel or within the, ame suite may only be permitted if the approved number of parking spaces does not crease SECTION 3 Implementation of the In-Lieu Parkin Fee P 4rarn shall be the p g responsibility of the Departments of Planning and Building, and Economi Development SECTION 4 If the Redevelopment Agency approves a Financial Participation Agreement the Agency shall provide all documents necessary to/ ffectuate its participation and forward the documents to the Planning and Building Departme f for inclusion in the conditional use permit file SECTION 5 The Director of Planning and Building or his/her assignee is authorized to execute documents (unless otherwise noted) to effectuat �he above implementation measures and the In-Lieu Parking Fee Program SECTION 6 City Council Resolutions No6 220 and 6721 are hereby repealed PASSED AND ADOPTED b the City Council of the City of Huntington Beach at a Y �' Y g regular meeting thereof held on the day of , 2010 Mayor REV AND APPROVED INITIA D AN PROVED O Ck A mmistrator Director of Ptaniiifigyand Building APPROVED AS TO FORM ity Attorne§ Kv L- _-)-s-i io f 10 2506 004/48396 3