City Council Meeting: September 8, 2009

Agenda Item: 8-A

To:                   Mayor and City Council

From:              Andy Agle, Director of Housing and Economic Development

Subject:          Walker Parking Consultant’s Update to the Downtown Parking Program

 

 

Recommended Action

Staff recommends that the City Council authorize staff to return with actions necessary to implement the recommendations of the Walker Parking Study, including:

 

1.      Adjust parking rates for on-street parking meters and off-street parking structures within Downtown Santa Monica;

 

2.      Develop program guidelines for a centralized valet system and public access to private parking facilities;

 

3.      Develop a program to encourage increased use of alternative transportation by Downtown employees;

 

4.      Develop a financing plan for the first stage of implementation of the Downtown Parking Program;

 

5.      Develop a financing plan for future stages of implementation of the Downtown Parking Program, including adjusting the Parking In-Lieu Fee; and

 

6.      Enhance downtown parking operations, including appropriate staffing following implementation of parking rate adjustments.

 

 

Executive Summary

The Walker Study is a follow-up to the Downtown Parking Program, a ten-year strategic plan that calls for the reconstruction of Parking Structure Nos. 1, 3 and 6 and the construction of additional parking on Fifth Street, resulting in a net increase of up to 1,712 new parking spaces to the downtown parking inventory.  On December 4, 2007, Council authorized a contract with Walker Parking Consultants to analyze City parking operations and to provide an update to the Downtown Parking Program financing plan.  Updating the financing plan provided an opportunity to evaluate options for enhancing the effectiveness, customer service, parking pricing and technology of parking operations in the Downtown area.  It also provided an opportunity to analyze current and projected parking demand in the Downtown area in order to assess the need for additional parking in the near term.

 

Walker Parking Consultants (“Walker”) and its sub-consultant Keyser Marston Associates (“KMA”) evaluated parking operations and market conditions in Downtown Santa Monica and competitive nearby destinations, and analyzed revenue opportunities from parking rates, in-lieu fees, property-based assessments and other revenue sources.  This report summarizes Walker’s findings and recommendations for the City to better manage parking demand and maximize efficiency of the public parking supply in Downtown Santa Monica.

 

Walker’s overall recommendation is that other than the additional 576 parking spaces planned in the reconstruction of Parking Structure Nos. 1 and 6; Downtown Santa Monica does not need additional public parking at this time.  Rather, Walker recommends implementation of several actions to support access to Downtown.  These actions include:

 

·        Strategically increase on-street and off-street public parking rates in the Downtown core to more efficiently and effectively utilize existing public and private parking resources to meet parking needs, thereby creating greater availability of parking for visitors to Downtown;

 

·        Use increased parking revenues to fund additional programs to support employee access to Downtown by transit, bicycle and carpooling;

 

·        Use increased parking revenues to support shuttle service to outlying parking resources, including the Civic Center Parking Structure during parking structure reconstruction;

 

·        Use parking revenues to enhance parking operations, parking technology, wayfinding, parking occupancy assessment and capital replacement and repair;

 

·        Implement a centralized valet operation to access private parking spaces during off-peak periods, supplemented by agreements with office building owners to make empty spaces available to the public on evenings and weekends; and

 

·        Regularly review parking occupancies and adjust parking rates to encourage optimal use of public parking resources.

 

These recommendations are coordinated with the citywide Transportation Management Strategy identified for implementation in the Circulation Element of the LUCE.

 

 

Background

The Downtown Parking Program is a ten-year strategic plan that was developed by the Downtown Parking Task Force and adopted by Council on May 9, 2006.  The Program calls for the construction of new parking on Fifth Street and reconstruction of Parking Structure Nos. 1, 3, and 6, for a net increase of up to 1,712 new parking spaces to the Downtown parking inventory.  These recommendations by the Downtown Parking Task Force were based on assumptions of growth in the Downtown area of 50,000 sq. ft. annually and maintaining a parking ratio of 2.1 spaces per 1,000 sq. ft. of commercial space.

 

In its review of the appropriate mix of retail uses on the Third Street Promenade and in the Bayside District, the Promenade Uses Task Force recognized that in order to support cinema activity along the Third Street Promenade and to preserve the Bayside District’s competitive advantage, adequate parking is needed.  Recognizing the challenge of creating new cinemas on the Third Street Promenade as well as an opportunity to expand the energy of the Downtown District, the Promenade Uses Task Force foresaw the opportunity to combine the cinema strategy with the Downtown Parking Strategic Plan, suggesting that options to enhance the cinema experience “may include combining cinema development with the Downtown parking structure reconstruction and expansion program.”  In February 2008, Council authorized staff to solicit proposals for redevelopment of Parking Structure No. 3 into a mixed-use project that would include state-of-the-art cinema, ground-floor retail or restaurant space and subterranean parking.

 

Construction of public parking facilities in accordance with the Downtown Parking Program requires an update of the Program’s financing plan to reflect current construction costs, market conditions and parking rates.  The update provides an opportunity to evaluate options for enhancing the effectiveness, customer service, parking pricing and technology of parking operations.  It also provides an opportunity to re-analyze growth in order to determine the appropriate number of new parking spaces.

Discussion

Walker and KMA completed a five-part analysis of Santa Monica parking operations and an update to the Downtown Parking Program’s financing plan.  They made extensive observations of parking conditions, conducted research and analyzed parking data for the various public and private supplies of parking in the Downtown area.  The primary study area is bounded by Wilshire Boulevard to the north, Colorado Avenue to the south, Second Street to the west and Sixth Street to the east.  City Parking Structures Nos. 1 through 10 are included in the primary area.  Peripheral parking at the Civic Center and Library Parking Structures also was studied.

 

Walker’s overall recommendation to the City is that although parking in some public structures experience unacceptably high levels of occupancies, a large number of parking spaces sit vacant even on the busiest days, including private parking spaces.  Walker recommends that once the rebuilding of the expanded Parking Structure Nos. 1 and 6 is complete, additional public parking in the area should not be built at this time.

 

In order to maximize the efficiency of the existing Downtown parking supply, Walker recommends that the City do the following:

 

1.                     Implement the recommended parking pricing policies to encourage improved utilization of the existing parking supply, most notably the large number of private spaces, as well as peripheral parking spaces;

 

2.                     Monitor parking occupancy rates at regular intervals for the purpose of periodic revisiting of parking policy issues, and, specifically, determining whether parking prices should be adjusted;

 

3.                     Create agreements with the owners and operators of private parking facilities in the area to encourage their use by employees and other members of the public;

 

4.                     Implement a centralized valet operation to access private parking spaces that otherwise would not be utilized by the public;

 

5.                     Use parking technology to support efficient use of public parking spaces; parking technology could include cashless revenue collection, real-time parking availability information with guidance to available spaces, multiple-space parking meters, parking meters with credit card capability, etc.

 

6.                     Use a portion of the revenue from the increased parking rates to actively fund non-single occupancy vehicle modes of transportation by employees of businesses in the area, such as subsidized passes for transit service, bicycle commuting and carpooling.

 

These specific policies are consistent with the citywide strategies identified in the LUCE, several of which are currently being undertaken through the Transportation Demand Management Program.

 

Demand Analysis and Parking Rate Recommendations

Walker’s report notes that the Downtown area contains 10,595 public and private on-street and off-street parking spaces, and that the City of Santa Monica controls a majority of these spaces.  Walker completed weekday and weekend parking occupancy surveys throughout the study area and compared the survey results to hourly parking data from public Parking Structure Nos. 1-6 and 9.  Walker’s survey included on-street parking as well as the private parking in the area.

 

Walker’s analysis demonstrates that the parking occupancy rate peaks at 65 percent for the entire area.  While this figure may suggest that the study area overall does not suffer from a parking deficit, it masks large imbalances in parking demand within the Downtown area.  Walker observed that on-street parking demand often exceeds supply.  During seven of eight survey intervals, Walker noted that the on-street parking supply experiences occupancy above 90 percent during both weekdays and weekends.

 

Walker notes that during the public parking structures’ weekend peak, the private parking supply is underutilized in the Downtown area, largely because office buildings are closed. Furthermore, Walker indicates that on weekdays the area behaves like a typical mixed-use area in which the local office space generates the preponderance of the weekday parking demand, but is significantly less prominent on weekends.  Overall, Walker’s analysis noted two trends. First, on-street parking is consistently impacted and often oversubscribed.  Secondly, as most office buildings are closed on weekends, their parking spaces are largely unused.

 

Walker recommends adequately pricing parking in the Downtown area in order to improve the efficiency of the parking system as a whole, to increase the availability of parking supply for customers, to maximize the turnover of on-street parking spaces, to bring Santa Monica parking rates in line with greater Los Angeles area parking rates, and to raise revenue for additional parking improvements.

 

Based on the imbalances in the demand for parking that were observed, Walker recommends the following pricing strategy for both the on-street parking meters and the core public parking structures in the Downtown area:

 

1.                     Initially raise the hourly rate for on-street parking to $1.50 from $1.00 per hour and expand the hours of operation from 6pm until 10pm.

 

2.                     Replace existing parking meters with ones that accept credit cards, and then raise rates to $2.00 or more per hour.

 

3.                     Charge $1.00 beginning the second hour of parking in the City’s public structures.  The first hour of parking would be free. Currently, the City offers two hours free.

 

4.                     Charge $2.00 for each additional hour in the City’s parking structures rather than the current $1.00 per 30 minutes.

 

5.                     Raise the daily maximum rate in the City’s parking structures to $9.00 from $7.00.

 

6.                     Raise the evening flat rate from $3.00 to $5.00.

 

7.                     Raise the monthly parking rate from $82.50 to $121.00 per month in the core parking structures, which is closer to market levels.

 

Walker projects that the additional gross revenue gained from the increased parking rates would be roughly $2,620,000 in 2011.  From the gross revenue projected, Walker recommends that the City set aside a portion as a capital reserve for structural maintenance of the parking facilities.  It is estimated that $50 per space be reserved for Parking Structure Nos. 1-6, 9, and 10, which amounts to approximately $170,000 per year.

 

Revenue Options and Financing Potential

KMA completed cash flow projections based upon the incremental parking cash flow that could be generated from Walker’s recommended operational and pricing changes.  Taking into account the $170,000 capital reserve, the net increase in parking cash flow in 2011 is projected to be $2,450,000.  The increased revenues could be used to support financing for new or replacement parking spaces. This amount of debt service was projected to support $20.0-$28.5 million of financing with 20-year bonds, which would fund the construction of 341 to 486 parking spaces or $21.6-$30.8 million with 30-year bonds which would finance the construction of 368 to 525 parking spaces.

 

Other Recommended Parking Programs

In addition to the capital reserve for structural maintenance, Walker recommends that the City set aside funds from the increased parking revenue to accomplish other parking programs.  To the extent the City implements any of the following recommendations, funding capacity may be reduced from $800,000 to $1.2 million for each $100,000 used to fund an additional parking program.

 

1.      Create agreements with the owners and operators of the private parking facilities in the area to encourage their use by employees and other members of the public;

 

2.      Use a centralized valet operation for the Downtown area to access private parking spaces that otherwise would not be utilized by the public;

 

3.      Renegotiate the private lease of parking spaces in Parking Structure 2 to enhance public access to parking;

 

4.      Actively fund non-single occupancy vehicle modes of transportation by employees of businesses in the area, such as subsidized passes for transit service, bicycle commuting and carpooling.

 

In addition to funds set aside for these purposes, increased parking revenues are also expected to support the PBAD property assessments on the parking structures, garage repairs and repainting, technological advances, shuttles to auxiliary parking locations, additional aesthetic enhancements to Parking Structure Nos. 1-6, and parking operations.

 

In-Lieu Fee

KMA reviewed the Bayside Mall Assessment District and Parking Developer Fee program.  Both assessments were established in 1986 and both are scheduled to expire in 2016.  The Bayside Mall Assessment was established to repay the bonds that helped to create the Third Street Promenade and nearby infrastructure improvements. The Parking Developer Fee is assessed to owners who redevelop their property and choose not to provide all of the required on-site parking.  Under this program, the property is assessed on an annual basis at $1.50 per square foot of building area for which parking is not provided. Levied over a 30-year period, the annual in-lieu fee would provide between $15 -$18 per square foot of financing revenues, depending upon bond interest rates. The existing Parking Developer Fee in-lieu program is projected to have a balance of $7,568,000 in 2011.  KMA projects these funds to be sufficient to finance an additional 129 parking spaces.

 

KMA determined that this Parking Developer Fee is far below the cost of providing structured parking, estimated by the Public Works Department at $57,300 per space, not including the cost of land.  KMA suggests that an in-lieu fee program to cover 75 percent of the capital cost for a parking space with the incremental cash flow from the increased parking revenue covering the remaining 25 percent of the capital cost. Based on these assumptions, staff recommends a one-time in-lieu fee of $134 per square foot.

 

New Assessment District

KMA reviewed the assessment district analysis prepared by MuniFinancial for the City in 2004.  The analysis assumed an annual assessment of 50 cents per square foot of non-residential space.  Applying this rate to existing properties within the Bayside District generates $1.2 million annually.  Applying this rate to properties immediately surrounding the Bayside District is projected to generate an additional $1.55 million annually.  The combined revenue could support about $30 million in bonds and construct approximately 525 spaces.  Given the recent adoption of the Bayside District PBAD, as well as the general state of the economy, garnering the votes to adopt a new assessment at this time could be difficult.  It would be particularly difficult outside the parking district where most buildings provide on-site parking.

 

Parking Operations

Section 5 of Walker’s study analyses the City’s parking operations in the downtown and recommends a series of enhancements.  Many of the recommendations are administrative and operational recommendations that can be implemented immediately.  Policy recommendations include increasing staffing of the City parking office to ensure that sufficient resources to provide appropriate oversight of the parking system, funding technology improvements to enhance efficiency and customer accessibility and improving wayfinding between the parking structures and Downtown destinations.

 

Next Steps

With Council’s authorization, staff will return to Council with specific actions to implement the recommendations of the study, including a resolution to update Downtown parking rates.    As the implementation steps move forward, Council may wish to consider broader policy issues related to parking in the Downtown, including:

 

·      Expanding the parking district to match the new Bayside District boundaries,

·      Closing the gap between expected revenues and costs to build new parking, and

·      Evaluating parking requirements on new development within the parking district, including whether on-site parking should continue to be optional.

 

 

Public Outreach

The Land and Assets Committee of the Bayside District Corporation reviewed the parking rate recommendations on July 8, 2008 and the parking operations recommendations on February 10, 2009.

 

On June 18, and July 23, 2009, the entire report was reviewed by the Bayside District Corporation Board.  The Board agreed with the majority of Walker’s pricing recommendations for the public parking structures, with vigorous debate about the recommended pricing for monthly permits, as well as the appropriate period of free parking.  The Board recommended that the increased parking revenues be placed in a segregated account to address parking and access needs in the Downtown.  The Board recommended that the funds be used first to hire a City staff person dedicated to implementing the parking and access programs recommended by Walker.  The staff person would be responsible for working with the community and the Bayside District Corporation to develop and implement a comprehensive parking and access program in the Downtown area, including implementation of parking technology and overall public access to the area.  The Board recommended keeping the two-hour free period until the City has implemented the comprehensive parking program in the Downtown area, including addressing parking and access for employees who work Downtown.

 

 

Financial Impacts & Budget Actions

Walker’s parking rate recommendations would increase projected parking revenues by $2,620,000 in FY 2011/12.  However, the net revenues that would be available to support bond financing may be reduced by any needed capital or operating expenditure associated with implementation of any of the recommended programs.

 

When staff returns to Council with specific actions to implement the recommendations of the study, staff will provide additional financial and budgetary information based on the proposed revenue adjustments and potential capital and operating expenditures.

 

 

Prepared by: Erika Cavicante, Senior Development Analyst

 

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Andy Agle, Director

Housing and Economic Development

 

P. Lamont Ewell

City Manager

 

 

Attachments: