sr-061411-3uCity Council Meeting: June 14, 2011
Agenda Item: 3-' V
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Agreement for Downtown Parking In-Lieu Fee Study
Recommended Action
Staff recommends that the City Council
1. Authorize the .City Manager to negotiate and execute a professional services
agreement with the consulting team of Nelson\Nygaard to analyze and make
recommendations regarding the City's Downtown Parking In-Lieu Fee Program in
an amount not to exceed $75,000.
2. Appropriate the budget increase as outlined in the Financial Impacts and Budget
Actions section of this report.
Executive Summary
The Downtown Parking In-Lieu Fee Program, established in 1986 in connection with the
Bayside District/Third Street Promenade public improvements, creates a fund to finance
additional parking improvements in the area. It also encourages new development
within the Bayside District to become part of the "park once" City policy by contributing
to the fund rather than providing private parking on-site. The Walker Parking Study
reviewed the Downtown Parking In-Lieu Fee Program and recommended further review
and possible adjustment of the formula and the areas where the fee is applied.
Nelson\Nygaard, in partnership with AECOM, Inc. is being recommended to undertake
this assignment for an amount not to exceed $75,000.
Background
The Downtown Parking In-Lieu Fee (Program) was established by Resolution 7255 in
July 1986, as an incentive to encourage property owners to rely upon public parking and
support the City's policy of "park once." Under the Program, developers within the
Bayside District (the area bounded by Second Court to the west, Fourth Court to the
east, Broadway Avenue to the south, and Wilshire Boulevard to the north) may choose
to pay a fee in lieu of providing required parking on-site. The annual fee, which expires
June 30, 2016, is $1.50 per square foot of building area added after 1986 for which
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parking is not provided. The City collects approximately $600,000 annually from 44
parcels. Currently, there is approximately $7.0 million in the fund.
The Walker Parking Study, approved by Council on September 8, 2009, evaluated
current parking operations in Downtown and made a number of recommendations to
help the City better manage its parking resources. One of Walker's recommendations
was that the Program be re-evaluated because the fee of $1.50 per square foot only
provides about $5,000 to $6,000 in bond financing for the construction of each parking
space, far less than the estimated cost of $50,000 to construct a new public parking
space.
Discussion
The formula, fee amount, and applicable area of the Parking Developer Fee have
remained unchanged since 1986. The Walker Parking Study recommended that the
City revisit its in-lieu program because its current formula at $1.50 per square foot per
year is far below the cost of providing structured parking. In January 2011, staff
prepared a request for proposals (RFP) for a consultant to evaluate the City's existing
in-lieu fee program and recommend a methodology for establishing an in-lieu fee
structure and assessment formula for new developments that provide less than the
required parking on-site. The recommended in-lieu fee program would create a fund
that would accumulate sufficient revenue to construct additional public parking, reduce
reliance on private parking, and evaluate and possibly fund transportation demand
management (TDM) programs.
Consultant Selection
The RFP was distributed to four firms and staff received proposals from two firms,
Nelson\Nygaard and AECOM. Each company responded separately to the RFP. An
interdepartmental team consisting of staff from Economic Development, Planning,
Transportation Management, Finance and the City Attorney's Office reviewed the
proposals and staff interviewed both companies. Each firm had different strengths that
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they brought to the assignment. Upon request by staff, Nelson\Nygaard and AECOM
submitted a revised joint proposal that is being recommended to Council. The
consultants, who are partnering on this assignment, will evaluate the existing fee,
recommend alternative formulas, consider amendments to the geographic area within
the Downtown where the fee might apply, and relate the proposed fee to the amount of
anticipated new development and to the amount of parking that could be financed.. In
addition, the consultants are being asked to .recommend uses of the fee for
Transportation Demand Management (TDM) programs that also support efficient use of
parking resources.
Nelson\Nygaard Consulting Associates is a national transportation planning firm that
specializes in developing parking management programs. The firm's experience
includes work on the City of Glendale's Mobility Study, in which the primary focus was
to develop a new comprehensive parking management system and adoption of a
parking in-lieu fee. Nelson\Nygaard's work with the City of Santa Monica includes
preparing the update of the Land Use and Circulation Element (LUCE), completing the
Santa. Monica Civic Center Parking Area Assessment Study, preparing the
Transportation Impact Fee Nexus Study, and assisting with the Downtown Specific Plan
and the 5th & Arizona Visioning Process. In the proposed agreement, Nelson\Nygaard
would be responsible for work related to information about best practices by other cities
regarding in-lieu fees and information about other uses of in-lieu fees such as TDM
strategies.
AECOM is a global professional services firm whose core practice includes economic
and fiscal impact assessments. AECOM's experience includes developing the Santa
Barbara Parking Assessment District, and providing long-range economic guidance for
a variety of retail districts and neighborhoods in Central Portland. AECOM's work with
the City of Santa Monica includes the preparation of three Feasibility Studies -the
Freeway Capping Project, a study which explores the independent station options for
the Expo Light Rail terminus, and a study that examines the connections and linkages
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between public and private projects within the City's Downtown. In the proposed
agreement, AECOM would be responsible for conducting the sensitivity analysis for in-
lieu fees using developer pro-formas that link payment of in-lieu fees to additional
parking and to specific TDM strategies.
The firms will collaborate on estimating future growth, recommending how the in-lieu fee
would be structured for different uses, making recommendations about the geographic
boundaries, and estimating how many parking spaces may be needed and/or built given
the. proposed fee structure.
Financial Impacts & Budget Actions
The contract that will be awarded. to Nelson\Nygaard will not exceed $75,000 and
includes a contingency of $5,000. As was the case with other recommendations from
the Walker Parking Study, this study was expected to be funded from the net increase
in funds generated since the adoption of higher parking fees at the May 11, 2010
Council meeting. The higher parking fees were implemented on July 1, 2010 and are
expected to generate $2.1 million in increased parking revenue during Fiscal Year
2010/11. The contract award requires an appropriation of $75,000 to Account
01225.555060 (Professional Services) for these services from the incremental parking
revenue.
Prepared by: Erika Cavicante, Senior Development Analyst
Forwarded to Council:
Andy Agle, Director ~ Rod Gould
Housing and Economic Development City Manager
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Reference Amended
Contract No. 9382 (CCS)