Provide staff with direction including consideration of preparing a plan for development of off-street parking and return to the Council with a draft plan for review and further direction.

Executive Summary

In 1965, the City adopted Ordinance No. 122 (Attachment #1), and Section 1318 of that Ordinance provides the following in regard to permissible uses of in lieu parking fees for off-street parking requirements to commercial districts:  “Such funds so collected by the city shall be deposited in a special fund and used by the city to develop off-street parking available to the general public in or near the business district of the city.” The formula for calculating the value of the in-lieu parking fee is contained in Section 17.38.040 of the City’s Municipal Code (Attachment #2). 

Based on Ordinance No. 122, Section 1318 and Section 17.38.040 of the Municipal Code, the parking in lieu funds collected to date (approximately $714,000) must be used to acquire and/or develop off-street parking.Street maintenance, as well as parking lot maintenance, are most likely not permissible uses of parking in lieu funds because, even though parking may be permitted on public streets and in public parking lots, the maintenance of the streets and parking lots does not develop additional off-street parking, it just maintains existing parking.Furthermore, the in lieu funds are to be used to acquire and develop “off-street” parking, and street parking, by definition, is not off-street.

If the City wishes to spend in lieu parking fees for purposes other than the acquisition and development of off-street parking, such as street maintenance, then the City would need to comply with the Mitigation Fee Act found in Government Code Section 66000.  The Mitigation Fee Act requires that the fees not exceed the estimated reasonable cost of providing the service or facility for which the fees are collected.  The purpose of the fee and the use must be identified.  The City must make a determination as to how there is a reasonable relationship between the fee and the development on which it is imposed and between the need for the public facility and the type of development project against which the fee is imposed.  The City would need to retain a consultant to prepare a nexus study, estimate the cost for the facility, identifythe purposes to which the fees would be applied, follow the requirements of the Mitigation Fee Act, hold a public hearing and adopt an ordinance.  In addition, the maintenance costs attributable to the subject new projects are presumably less than the City providing off-site parking which may result in lower in lieu fees being adopted pursuant to new process.

Background

On December 14, 1965, the City Council adopted Ordinance No. 122 CS which established off-street parking requirements for the commercial districts of the City.  See Attachment 1.  The Ordinance applies to off-street parking requirements for the following Zoning Districts:  C-1-c, c-1-L, C-1-S and C-2.   

Section 1315.8 of Ordinance 1222 provides that unless a variance has been granted waiving the location of off-street parking on the site, required off-street parking shall be provided on the building site of the structure in all zones except for C-1-C in which off-street parking will be provided off the building site unless a use permit is obtained permitting it on site.

Section 1318 provides that where off-site parking is required or permitted but suitable off-street parking is not obtained, then the off-street parking requirement may be satisfied by payment of cash to the city in an amount per parking space as required to be established by an annual resolution.   

Section 1318 includes this provision:   “Such funds so collected by the city shall be deposited in a special fund and used by the city to develop off-street parking available to the general public in or near the business district of the city.”

The current parking requirements are listed below in Table 1. The reason for adopting Ordinance No. 122 CS was to require and develop off-street parking in the city’s commercial zones for business owners and their employees. Creating more off-street parking would allow curbside spaces to remain available to customers and would reduce the impacts of employee parking in adjacent residential neighborhoods. 

Table 1. Current Minimum Off-Street Parking Requirements

In addition to creating minimum parking requirements, Ordinance No. 122 CS established a formula for calculating the value of a parking in-lieu fee for properties that could not provide the required number of off-street parking spaces.

The Ordinance further established that, no less frequently than annually, the City Council shall establish by Resolution the value of the parking in-lieu fee based on the value of improved parking facilities on a per stall basis.  On June 2, 2020, the City Council adopted Urgency Ordinance No. No. 2020-003 to suspend the requirement of Section 1318 in regard to adopting a resolution annually.  

Historically, as property values and construction costs have increased, the parking in-lieu fee has also increased. Table 2 below provides a history of those increases.

Table 2. Historical Data on Adopted In-Lieu Parking Fees

Municipal Code

The formula for calculating the value of the in-lieu parking fee is contained in Section 17.38.040 of the city’s Municipal Code (Attachment #2) and is also part of the city’s certified Local Coastal Plan. The in-lieu parking fee formula is summarized as follows:

• Current construction costs of public parking garages with a Type I or Type II fire resistance (Attachment 2);

• Multiplied by the regional modifier for the San Francisco area (1.75 has been used historically in Carmel); and

• Increased by 50 percent to reflect land costs.

The resulting factor is multiplied by 400 square feet per in-lieu parking stall to determine the total amount of the fee to be charged. A fee reduction of 25 percent is granted for parking spaces required for newly established residential dwelling units.

The parking in-lieu fee is adjusted based on the adopted Building Codes in effect at the time of review. On March 3, 2020 the City Council adopted the 2019 editions of the California Building Codes. Based on staff’s review, it appears that the parking in-lieu fee has not been updated since the 2001 edition of the California Building Codes.

Section 17.38.040 “Parking In-Lieu Fee Program” addresses the issue of uses of the parking in lieu funds in the first paragraph which reads as follows:

"When parking adjustments have been authorized by the Planning Commission in conformance with CMC 17.38.030(C), required parking may be satisfied by the payment to the city of in-lieu fees. Funds collected by the city from such payments shall be deposited in a specific fund and used by the city to acquire and/or develop off-street parking. Such parking shall be available to the public and shall be in or near the business district of the city. Funds paid to the city for in-lieu parking shall not be refundable in the event of destruction or removal of the structure or land use for which the funds were paid, but shall run with the land. The city shall maintain a record of all spaces credited to each property including all spaces paid through in-lieu fees, spaces physically provided on each property and all spaces represented by the existing parking nonconformity on each site."

General Plan Policies And Objectives Regarding Parking

There are a number of General Plan Policies and Objectives regarding parking including the following:

1. General Plan Objective O2-4:   Recognize that it is not practical to provide sufficient parking that meets total demand at every location; but that it is desirable to provide, where practical, alternate parking where it could be removed from public view and in a scale appropriate to Carmel. (LUP)

2. Policy P2-19:  Benefit to and impact on residents of Carmel-by-the-Sea and its visitors shall be the primary factors to be considered when evaluating and deciding upon development of off-street parking facilities. (LUP)

3. Policy P2-20:   Encourage mixed-use developments on City owned lots in the downtown area (e.g. parking and housing).

4. Policy P2-21:   Investigate possible public parking locations in the commercial areas, in the R-4 area, and existing sites devoted exclusively to parking in the R-1 district. If a parking structure is considered, encourage underground parking, and ensure that the structure is compatible with the neighborhood and consistent with the Design Guidelines.

5. Policy P2-22:  Review and consider changes to the in-lieu parking regulations and develop a plan for utilization of the in-lieu fees.

6. Policy P2-24:  Work with local businesses in establishing ways to reduce employee parking impacts on neighboring residential and commercial areas.

    7.  Policy P2-25:  Evaluate a paid parking program for the downtown.

8.  Objective O2-5:  Require that all new developments provide sufficient off-street parking facilities. (LUP).

9.  Policy P2-27:  Avoid overbuilding parking capacity by using average demand factors
instead of peak demand when establishing parking requirements and
recognizing that street parking resources are part of the supply. (LUP)

10. Policy P2-28:  Use off-site parking and fees in-lieu of parking to meet parking
demand generated by downtown commercial land uses. (LUP)

Circulation Element

Attachment #3 is the Circulation Element of the General Plan dated January 2010. The Circulation Element includes a discussion regarding Parking beginning on page 2-14. 

In regard to Public Off-Street Parking, the Circulation Element states on page 2-15: 

"The City of Carmel-by-the-Sea owns and maintains 14 public parking lots providing 423 parking spaces within and adjacent to the City’s commercial district. Figure 2.3: Public Off-Street Parking and Table 2.5: Off-Street Parking Facilities, provide the location and number of spaces provided in each facility."

Figure 2.3 following page 2-15 is a map of the location of the 14 public parking lots in the City. 

On pages 2-18 and 2-19, there is a discussion regarding the results of a survey from residents on the subject of parking in the commercial district. 

Plan For Developing Off-Street Parking

As noted, General Plan Policy P2-22 provides for the review and consideration of changes to the in-lieu parking regulations and the development of a plan for utilization of the in-lieu fees.

The use of the in lieu funds to pay for the cost of preparing of a plan for the utilization of the in-lieu funds would be within the scope of Ordinance 122 and Section 17.38.040 as a permissible use of those funds.

The plan can include a review of potential options for use of the in-lieu funds and the cost associated with those options.

Alternatives

With the above analysis that prohibits the use of the existing Parking in Lieu funds ($714,000) for anything other than additional off-street parking, there are several alternatives that may be considered by the City Council as follows: 

Option 1:  Direct staff to proceed with a Mitigation Fee Act process, including a nexus study, an identification of the purposes to which the fees would be applied, hold a public hearing, and adopt an ordinance, in order to diversify eligible uses of the existing fund. 

Option 2: Direct staff to begin to develop a feasibility study evaluating various underground parking alternatives, additional at grade parking area(s), and a parking garage structure. Staff would suggest that a new Capital Improvement Project be added to the current Fiscal Year's Capital Improvement Program (currently absent of projects), and use a portion of the existing funds to hire a consultant to perform the feasibility study. Council would subsequently need to approve the CIP project and award a professional services agreement with the selected consultant. 

Option 3:  Direct staff to perform an in-house, preliminary evaluation of several parking lot expansion concepts, develop rough cost estimates, and report back to the Council. Little to no parking in lieu funds would be expanded. 

Option 4: Direct staff to prepare a new ordinance with new requirements to mitigate parking impacts associated with private development projects with a goal of allowing future funds collected to be used for a broader scope of street and parking lot-related services, including maintenance. The existing fund balance would remain as is. 

Option 5: Recognizing higher priorities during the current Covid-19 pandemic, Council could defer this decision about additional off-site parking to a later date. 

Conclusion

For the foregoing reasons, staff is recommending that the City Council provide staff with direction as outlined in the alternatives section above. 

The City Council adopted Ordinance No. 122 on December 14, 1965.

On June 2, 2020, the City Council adopted Urgency Ordinance No. 2020-003 to suspend the requirement of Section 1318 in Ordinance No. 122 in regards to adopting a resolution annually.