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HomeMy WebLinkAboutCC Minutes - 05/30/01 Work Session MINUTES Eugene City Council Work Session McNutt Room, City Hall May 30, 2001 Noon COUNCILORS PRESENT: Betty Taylor, David Kelly, Scott Meisner, Gary Rayor, Gary Pap~, Bonny Bettman, Par Farr. COUNCILORS ABSENT: Nancy Nathanson. CITY COUNCIL WORK SESSION Mayor James D. Torrey introduced Julia Chambers and Frances Hacker, his assistants for the day. Ms. Chambers called the meeting to order. A. Work Session: Parking Options to Support Compact Development The council was joined by former Planning and Development Department Director Paul Farmer for the item. Mr. Farmer introduced Terry Moore of EcoNorthwest. Mr. Moore had been asked to prepare the presentation in response to some of the issues the council had been considering, including the Growth Management Study policies, the need to reduce vehicle miles traveled (VMT) in the region, the need to reduce reliance on the automobile, and the need to reduce reliance on parking. Mr. Farmer identified a paradox in that to meet the larger regional objectives, the City must continue to supply downtown parking. Given that much of downtown parking was in surface parking and a more intensive use was desired for those sites over time, the City faced the additional paradox in that for Lane County to succeed as a region, the City needed to build more downtown parking. Mr. Farmer suggested that the questions to be answered included how to provide that parking in the best way while maximizing the use of parking that was constructed, and what could the private sector be expected to contribute. Mr. Farmer commended Parking Manager George Jessie for his oversight of the Parking Program, saying his hiring had allowed the City to proceed with work on a variety of parking-related issues that had been "on hold." Mr. Pap~ arrived at the meeting. Mr. Moore provided a slide presentation on downtown parking that included both the private and public economics of parking. He compared costs to revenues for structured and surface parking. The presentation indicated that structured parking came at a significantly higher cost than surface parking and that it was unlikely to be built by the private sector unless economic factors combined to make it profitable. Mr. Moore briefly discussed the public policy implications of subsidized MINUTES--Eugene City Council May 30, 2001 Page 1 Work Session parking provided by the public sector in downtown, indicating subsidies were likely to be higher in smaller communities than in larger communities. At the conclusion of Mr. Moore's presentation, Mr. Farmer said he anticipated that the new federal courthouse would attract other development into the immediate area and downtown and parking would pay a role in that. More intensive development along 5th Avenue would probably only occur if structured parking was built to replace the existing surface parking. He believed the plans for the East Broadway area would require additional structured parking. In each case, staff was hopeful some of the surface parking that now existed would be eliminated. Mr. Farmer said that Mr. Moore was asked to do his analysis to give staff and the council a sense of whether the private sector would assist in the provision of structured parking in any of those locations, and what the public role was likely to be to realize the council's goal of higher density, mixed-use development in downtown. Mr. Farr determined from Mr. Moore that the land costs for surface parking were specific to the land acquisition alone. Mr. Meisner said the information presented did not indicate why the City was providing all parking in downtown. At the current time, the private sector had no obligation to provide parking downtown as it was exempted from providing parking. He did not see any public/private partnership existing in the provision of parking downtown. Mr. Farmer responded that the private sector had been providing some parking in the form of surface lots. The economics of downtown parking supported that approach. He believed that if the City was to require that developers provide structured parking downtown, the City would not see any downtown development. Mr. Meisner said his concern was about the lack of partnership. Mr. Farmer cited Broadway Place and the parking lots at Pearl Street and East 10th Avenue as examples of public/private partnerships. Mr. Meisner believed the City paid the costs of parking at Broadway Place. Mr. Farmer said he would have to review the construction information before he agreed or disagreed. He concurred with Mr. Meisner that the partnership model was preferable. He thought examples in Portland showed that the private sector could participate. Mr. Meisner thought that if the City was the sole provider of structured parking and it did not have the resources to build it, that "set up the model to fail." Mr. Kelly thanked Mr. Moore for the presentation. He agreed with Mr. Meisner about the need for private/public partnerships. He said the City had held several work sessions on parking and each time there was interest among the councilors about having public/private partnerships and staff acknowledged that, but then the council had to ask again. He had brought up some ideas suggested by the private sector regarding ways to ease the differential in cost, such as the provision of private loans at below-market rates to help the construction of structured parking, or the formation of local improvement districts. He questioned what it would take to get change. Responding to Mr. Kelly's remarks, Mr. Farmer said that downtown development costs more than suburban development, so developers downtown are paying a cost premium to locate downtown. He said there was a public/private partnership in the form of that cost premium. He believed that Broadway Place also included a cost partnership because the land assembly costs were shared by the private/public partners. He said that as the City pursued other downtown development, it would pursue additional public/private partnerships. Each development would be different in how those partnerships played out. He anticipated each model would include cost sharing between MINUTES--Eugene City Council May 30, 2001 Page 2 Work Session the public and private sector. Mr. Farmer acknowledged no further staff follow-up had occurred on Mr. Kelly's suggestions for Iow-income loans and local improvement districts. Mr. Pap~ expressed appreciation to Mr. Moore for his expertise. He asked if the City's policies related to the cost of parking was establishing the market, or if the City was part of the market. Mr. Moore said that the City had a large part of the supply, but given the economics of surface parking, that continued to work for the private sector. Mr. Moore said that people were generally paying no more for parking in private lots than in public structured parking. He said that the City could charge more, but the market was bigger than the downtown. Mr. Moore pointed out there were private lots in downtown and businesses had the option of relocating to another place in the community. The higher the parking rate, the more the disincentive there was for businesses to locate downtown. Mr. Moore said that much of the discussion about parking was about fairness on one hand and efficiency on the other. He understood Mr. Meisner's concerns about subsidization, but if the City did not subsidize parking, what happened? Did the private market step in? In his opinion, the answer was no. The private sector would walk away because of the economics. He thought the City faced tough choices. While subsidization might not feel fair, the question was, how much did the City want development to occur in downtown. Mr. Pap~ referred to Portland and its parking partnerships and asked if Mr. Moore had a sense of the break off in population before such partnerships worked. Mr. Moore did not. He pointed to the level of density in Portland and said that as development occurred and the land was consumed for other purposes and no surface parking could be built, businesses needed the parking to operate and structures then made economic sense. Eugene was not in that position. Mr. Moore suggested that another way to think about the issue was to consider eastern Oregon; the federal government had built many dams and provided subsidized water to farmers. The subsidy made the desert land economic to farm; in its absence, the land was not economic to farm. The economy was based on the assumption the subsidy was there. If policy changed and the federal government charged the real price of water, it would result in a painful economic turnaround for a lot of people. He said that the issue of whether the parking subsidy was a good idea was a difficult one; however, in the medium term, there would be less development and less density in downtown if the subsidy did not exist. Ms. Bettman said she could not consider the issue of downtown parking without considering the issue of parking citywide. While she agreed with Mr. Moore's conclusions, she believed the City was subsidizing surface lots outside the downtown by financing the transportation infrastructure to get people back and forth quickly so they could access such developments, and surface lots require land that could be used for other purposes. Such land did not generate the tax revenue it would if developed as a more intense use. Sprawl resulted, which cost the community more money. Ms. Bettman said those costs were not reflected in the information presented by Mr. Moore. In terms of the potential that an increase in parking costs or a tax on parking would drive development out of downtown, Ms. Bettman said that development was moving to the periphery anyway. The only way she could justify subsidized parking downtown was by taxing parking outside downtown. She acknowledged the memorandum the council had received about the issue, but said it was not what she had expected; she had expected a range of options that would allow the council to move forward with a tax on parking outside downtown. The staff memorandum appeared to be an argument for not moving forward. MINUTES--Eugene City Council May 30, 2001 Page 3 Work Session Mr. Farmer agreed that there were subsidies that had fostered sprawl. He said the question for him was, given that most of the subsidies were based on federal policies, what could the City do to make a difference? Staff had not found a solution in its research to the issue of "leveling the playing field." He said there were some approaches like Land Value Taxation, which would take action by the State legislature, as a lever that had been used selectively by some Pennsylvania communities to raise the cost of land relative to the cost of the improvement. Regarding the concept of administering a local parking tax on large surface parking lots, Mr. Farmer said it appeared the tax would have to be so enormous because of the turnover of spaces and throughput of businesses to work. There were administrative costs associated with the tax as well. Staff had not found any workable models, particularly for a community that was part of a larger region and that had immediate control of only a certain amount of land. Ms. Taylor suggested that the City could stop development that required large parking lots. Mr. Farmer said that the City had not gone as far as some communities in regulating big box retail. It could do more in the future. Ms. Taylor agreed with Ms. Bettman that activities outside downtown affected the issue of parking downtown. Ms. Taylor asked who parked in the Pearl Street garages and benefitted from them. Mr. Farmer responded that the City's garage, which was fairly close to capacity, served the area around it. It was not constructed to serve any particularly interest, but replaced the surface parking displaced by the Lane Transit District Station. Ms. Taylor agreed with some parking subsidy but said it should be combined with other approaches outside of downtown. She asked if Mr. Farmer was familiar with the parking structures in Santa Barbara. Mr. Farmer was not. Ms. Taylor said that Santa Barbara had beautiful parking structures that were landscaped to conceal their purpose. She suggested the City needed to consider how to beautify its structures. Mr. Farmer noted that cities sometimes employ business license revenues to underwrite those costs. Ms. Taylor expressed appreciation for the presentation. Mr. Rayor asked if staff and Mr. Moore believed there were enough structures downtown. Mr. Farmer said no. Mr. Moore said he had not evaluated the issue. He said that from a business point of view, finding adequate parking that worked well is difficult for downtown businesses. Mr. Rayor expressed concern that the rates charged by the City for structured parking were not adequate to fund the construction of new garages. He did not see how the City, in its current funding situation, could build any future parking structures unless a private/public partnership was involved. Mr. Rayor did not think a tax on surface parking outside the downtown was workable. He thought the council had attempted to address the issue of leveling the playing field by establishing landscaping requirements and parking limitations for development outside downtown. He asked Mr. Farmer for his reaction to those approaches. Mr. Farmer said that there were several ways to address the issue, including the use of regulations, by limiting supply, and through provision of subsidies. He cited 29th Avenue and Willamette Street and suggested that to achieve denser development at that location, it would require structured parking, which was not likely to be built by MINUTES--Eugene City Council May 30, 2001 Page 4 Work Session the private sector. That could be the impetus for the formation of a tax increment financing district or local improvement district. Mr. Rayor asked if all the parking envisioned through the Central Area Transportation Study (CATS) had been provided. He questioned if the study was obsolete. Mr. Farmer believed the plan should be updated. Scott Luell of Planning and Development Department clarified that CATS identified a need for 1,200 spaces; the City built just under 1,000 spaces for a net gain of about 420 because of the loss of surface parking to development, leaving some parking still to be built. Mr. Rayor said the cost of maintenance continued to rise while parking rates held steady, and there were no reserves in the Parking Fund. That was a concern to him. Mr. Bowers clarified that rates had been increased twice in recent years, the City did have Parking Fund reserves, and the fund was covering its operating costs and the costs of maintenance. He said that the City did not have sufficient reserves, for example, to fund a seismic retrofit for a parking structure. He confirmed, in response to a follow-up question from Mr. Rayor, that the City did not have sufficient reserves to build a new structure. Mr. Moore said the issue of parking downtown was a difficult one. He believed that the City would have to continue to make parking investments of some form or another in downtown to foster the density of development needed to make the downtown succeed. Mayor Torrey said that the private sector was going to follow the approach that made sense for it. If the council wanted to increase the cost of doing business downtown, the private sector had choices, and development would intensify north of Eugene on Highway 99 North toward Junction City. Mayor Torrey hoped the council would be consistent about its approach to incentives. He cited Symantec as an example, which placed an emphasis on the need for Iow-cost parking as an incentive for remaining downtown. He believed that any future tenant of the building would need a similar incentive, and that PeaceHealth would also request parking incentives as a condition for remaining downtown. Mayor Torrey said the economics of downtown development were dependent on proximity to Iow-cost parking. Mayor Torrey asked Mr. Farmer to discuss free parking. Mr. Farmer said that there is no such thing as free parking. There is always a cost for parking. He said that there were other reasons to charge for parking, including parking turnover to accommodate new customers. Mr. Farmer said that outside the downtown, parking was also being paid for, but was offered free to the customer because the lack of parking represented a barrier to patronage. MINUTES--Eugene City Council May 30, 2001 Page 5 Work Session Mr. Farr thought the City had gradually improved the appearance of its parking structures as time went on and it should be commended for that. Regarding taxing parking lots outside of downtown, Mr. Farr opposed that approach. He said that the costs would merely be shifted to the customers of the business concerned. He believed that if the council was to get the development it wanted downtown, it would have to continue to subsidize parking. Mr. Kelly said that Salem has free parking downtown because downtown businesses pay a monthly fee to make it available. He suggested Eugene businesses could be asked to pay for free parking downtown. He said that any incentives for downtown development needed to be placed in a citywide context and be made revenue-neutral, or the costs be shifted to other places on the basis of policy decisions. For example, the systems development charges for development downtown could be decreased, and those revenues replaced by an increase in the fee for development at the periphery. Mr. Kelly said that he would not support any future proposal for a parking structure that was supported only by the City. He wanted the participation of the public sector, and wanted to see follow-up on his past suggestions to reduce the differential in parking costs between the downtown and periphery. He wanted staff to provide alternatives for a parking tax. Mr. Kelly, seconded by Ms. Bettman, moved to direct the City Manager to bring back a specific range of proposals in the next four months regarding the implementation of a parking tax for all new surface parking developments on industrial or commercial zoned property that exceeds 25 spaces. Mr. Farr indicated opposition to the motion. He said that it was not a viable option if the City wanted to have development continue as it preferred. He reiterated his concern about cost- shifting. Ms. Bettman supported the motion. She wanted such a tax on all such lots, including existing surface parking lots. She suggested a friendly amendment to include residentially zoned property in the motion. She feared that developers would look for commercial property next to residential property and use the residential land for parking. Mr. Kelly declined to accept the amendment because he thought the focus of the amendment should be on usage rather than zoning. Ms. Bettman, seconded by Ms. Taylor, moved to amend the motion by adding residentially zoned property. Mr. Kelly said that he would have accepted a friendly amendment that addressed the usage of the property. Ms. Bettman withdraw her amendment. Ms. Taylor withdrew her second. Mr. Kelly accepted a friendly amendment from Ms. Bettman to change the word "zoned" to the word "usage." At the request of Mr. Meisner, Mr. Kelly repeated the motion, which now read: MINUTES--Eugene City Council May 30, 2001 Page 6 Work Session Mr. Kelly, seconded by Ms. Bettman, moved to direct the City Manager to bring back a specific range of proposals in the next four months regarding the implementation of a parking tax for all new surface parking developments on industrial or commercial usage property that exceeds 25 spaces. Mr. Rayor opposed the motion, reminding the council that the manager was to return to the council with proposals for funding mechanisms to create a series of urban renewal districts that would not be "your father's urban renewal districts," but which would reflect new ideas that addressed some of the issues mentioned by councilors. He called for a more comprehensive approach that involved examination of systems development charges, land use codes, development standards, and environmental protections, and not necessarily a tax. He thought the council could reach the same place in a totally different way. Mr. Pap~ opposed the motion He thought the council was considering the issue in isolation of other related issues. He suggested the council schedule more work sessions to consider those issues in a broader context. Mr. Fart did not think the City needed more taxes. He indicated that, if the motion appeared to have majority support, he would vote in favor of it so he could move for reconsideration when the entire council was present. Ms. Bettman supported the motion, even though it was scaled back from what she thought was needed. She agreed with the mayor that the private sector would go for the best deal, and right now the best deal was development on the outskirts of town because the City was subsidizing what she termed "huge surface area parking lots." She noted concerns expressed by the Chamber of Commerce that the community was going to run out of commercial and industrial land, and questioned how many acres of such land was taken up by surface parking. Ms. Bettman suggested that if those parking lots were converted to parking structures, the inventory of available land would double. That would alleviate concerns about the lack of commercial and industrial property and relieve the pressure to expand the urban growth boundary. Ms. Bettman thought it would provide an incentive for more efficient use of property as well as generate an income stream so the City could continue to subsidize development downtown and build downtown parking structures. She said the City currently did not have the money to do so. Mr. Meisner supported the motion. He agreed with Mr. Pap~ that more options would be useful, but he was "incredibly frustrated" that the council's discussions were resulting in no new ideas from staff. He maintained that staff was telling the council that the issue was one of subsidy as it was or no subsidy; he maintained that was "simplistic and false." Mr. Meisner supported the motion as a means of getting some new information that had not been made available to the council. Mr. Kelly expressed appreciation for Mr. Meisner's comments. He said that the motion did not direct the manager to impose a parking tax, but merely directed staff to bring the council more information so it could evaluate such a tax. He also wanted more information about the range of options Mr. Rayor mentioned. The only reason he made a motion was to elicit the research that was reflected in the staff memorandum regarding a parking tax. Mr. Pap~, seconded by Mr. Fart, moved to substitute the motion with a motion that directed the City Manager to bring the council options on how to MINUTES--Eugene City Council May 30, 2001 Page 7 Work Session densify commercial and industrial development downtown, and to decrease commercial and industrial development on the fringe. Mr. Meisner asked if the motion included the potential of a parking tax. Mr. Pap~ said that his motion did not preclude a parking tax. Mr. Kelly said it was not clear to him how the issue of parking would be addressed in the motion. He would have preferred the motion as an amendment to his own motion. Mr. Kelly was also concerned about the second element of the motion calling for decreasing development outside downtown as he was unsure it reflected a council goal. He thought there would be such development, and the issue was what kind of development it was. Mr. Meisner agreed with the remarks of Mr. Kelly. Rather than decrease development outside downtown, he wanted to decrease the inequity of allowing land to be used for unlimited surface parking. He suggested that Mr. Pap~ and Mr. Kelly confer to determine how to incorporate the disparate elements of the two motions. Ms. Bettman opposed the substitute motion, saying she thought the City had done a good job to densify commercial uses downtown, and she did not think there was much industrial property in downtown. Mr. Rayor supported Mr. Papa's motion. He said while he supported some elements of Mr. Kelly's motion, he would oppose it because it presupposed a tax. He supported Mr. Meisner's suggestion that the two motions be combined. The substitute motion failed, 4:3; Mr. Fart, Mr. Pap~, and Mr. Rayor voting yes. Mr. Kelly, seconded by Mr. Pap~, moved to amend the main motion as follows: To direct the City Manager to bring back a range of proposals in the next four months regarding the implementation of a parking tax for all new surface parking developments on industrial or commercial usage property that exceed 25 spaces, and to direct the City Manager to bring the council a variety of proposals to increase density downtown and to improve efficiency of development outside downtown. Mr. Kelly accepted a friendly amendment from Mr. Meisner that the range of options developed by staff include, but not be limited to, a parking tax. The motion passed unanimously, 7:0. Ms. Bettman hoped the wording of the motion was sufficiently broad to include suggestions for ordinances the City could use to regulate big box developments on the fringe. She believed that parking structures would play an important role in nodal development. MINUTES--Eugene City Council May 30, 2001 Page 8 Work Session Mayor Torrey's assistant, Frances Hacker, adjourned the meeting at 1:30 p.m. Respectfully submitted, James R. Johnson City Manager (Recorded by Kimberly Young) MINUTES--Eugene City Council May 30, 2001 Page 9 Work Session