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3. Resolution 5242 - Cash-in-Lieu of Parking FeeCity of Kalispell Planning Department 17 - 2"d Stream East, Suite 211, Kalispell, Montana 59901 Telephone: (406) 751-1850 Fax: (406) 751-1858 Website: kalispellplanning.com REPORT TO: Kalispell Mayor and City council. FROM; Tom Jentz, Planning Director James H. Patrick, city Manager SUBJECT: Set the cash -in -lieu of parking payment fee for downtown parking and develop a policy for collecting the fee MEETING DATE: October 1, 2007 city council Meeting ESTABLISHING A CASH -IN -LIEU FEE: The Kalispell City council approved an amendment to the Kalispell zoning ordinance in August, 2006 allowing required parking in the downtown parking district to be met by a cash -in -lieu payment. Prior to this, the only option available for downtown owners was the actual construction of parking spaces. The cash payment or value of a parking space was to be added later based on staff research or actual costs. Staff is now recommending that the cash -in lieu payment be set at $8, 200 / space . The downtown parking district where the cash -in -lieu of parking fee is available as an option is bounded by Third Avenue East and Third Avenue West on the east and west and by center Street and Fifth Street on the north and south. The Kalispell center Mall was also included in the district. within this area, existing developed space is grandfathered for parking purposes. New construction must provide parking at a reduced rate of one space for each 400 square feet of new construction. The council in amending the zoning ordinance understood the limitation that available parking has on future development in the downtown area. For all practical purposes, there are no available parking spaces that can readily be leased and there is no available land for additional parking without first taking down an existing building to accommodate new construction. Therefore, the cash in lieu of parking option made sense for downtown property owners. Last August, at the zoning amendment hearing, staff projected that the payment in lieu of parking would be between $5,000 - $10,000 based on other community programs in the state. In developing the suggested fee for Kalispell, staff used recent appraisals for determining land costs and then the actual construction costs in Kalispell for developing a parking lot space. For land costs, staff used the average of two current (2007) appraisals. one appraisal was for a piece of property on Main Street, the other appraisal was for land on First Avenue West one block off of Main. For construction costs staff contacted the Kalispell Public works Department. The $8,200/ space fee would be collected by the building department at the time of building permit issuance. The money would be placed in an account that would be restricted to construction of additional parking in the downtown district. SETTING A POLICY FOR ASSESSMENT OF FRACTIONAL PARKING SPACES; The zoning ordinance currently requires that all fractional portions of a parking space are to rounded up to the next whole number. For example, if someone were adding 500 square feet of new construction c@ one parking space per 400 square feet of construction in the downtown, he Downtown Parking September 25, 2007 Page 2 would be required to provide 1 '/4 parking spaces which is rounded up to 2 spaces. The logic here is that you can not effectively split a parking space. However, it is possible to split a cash in lieu payment. Staff is looking for policy direction on how to address fractional parking spaces when cash--in-lieu is proposed. As a real life example of the issue, Mr. Earl Holbeck is remodeling a business on Second Street West. He proposed adding 95 square feet to a building to bring the front of his building out 5 feet to create an even front facade line with the buildings on either side of him. The 95 square foot addition would require approximately 1/4 of a parking space. our zoning ordinance requires the fraction be rounded upward to the nearest whole number; in this case one space would be required. Mr. Holbeck has nowhere to get another parking space so he is looking at the cash in lieu of parking payment. However, he raised the question, why should he pay the full $8,200 when he is proposing a small project that only requires 1I4 of a parking space. Staff concurs that this is a valid concern and is looking for council direction. Three possible options are laid out for council consideration: 1. Assess the cash -in --lieu of parking payment the same as is provided for in the zoning ordinance, round up each fractional amount to the next nearest whole number, in this case Mr. Holbeck would pay the full assessment for one space, if the council approves $8,200, then his fee would be $8,200. 2. Round off all fractions of parking space such that .5 or above is rounded up to the next whole number and .49 and below is rounded down. In this case, Mr. Holbeck would not pay anything as he only requires .24 spaces and would round down to zero. 3. Pay a proportionate share for all spaces and portions of spaces required. Because Mr. Holbeck's addition requires only .24 parking spaces, he would pay .24 of the cash -in - lieu fee. If set at $8,200 j space his fee would be $1,947. RECI]MIVIENDATCN: Adopt the attached resolution accepting $8,200 as the cash in lieu of parking assessment for the downtown parking district, directing that any funds paid to the city will be placed in a an account that would be restricted to construction of additional parking in the downtown district and setting the policy that any fractional parking requirements be addressed using option 3 above, that being paying a proportionate share of the required parking assessment carried out to the second decimal place. FISCAL EFFECTS: Positive financial impacts to the city by providing a source of revenue to ultimately address downtown parking issues while at the same time allowing property owners in the downtown district an option to address their parking needs thereby encouraging additional development opportunities downtown. ALTERNATIVES: As suggested by the city council. Respectfully Submitted, Tom Jentz qame�sH. Pa rick Report compiled: September 25, 2007 c: Theresa White, Kalispell City Clerk RESOLUTION NO.5242 A RESOLUTION ESTABLISHING A CASH-INr-LIEU FEE FOR THE OFF STREET PARKING REQUIREMENT WITHIN SPECIAL PARKING MAINTENANCE DISTRICT No. 2 AS AUTHORIZED BY ORDINANCE NO. 1585. WHEREAS, Section 27.26.040(11) of the Kalispell City Code requires that property located within Special Parking Maintenance District No. 2 South of Center Street shall provide one parking space for every four hundred (400) square feet of gross floor area, and North of Center Street shall provide one parking space for every two hundred (200) square feet of gross floor area; and WHEREAS, the City Council determined by Ordinance 1585 that a cash -in -lieu payment may be paid as an alternative to providing required parking spaces on -site and that the fee shall be paid into a fund established by the City Council and in an amount as may be set by the City Council from time to time by resolution; and WHEREAS, the research by City staff that determined the value of a parking space within the parking district is currently $8,200.00 is found by City Council to be fair and reasonable; and WHEREAS, the cash -in -lieu of providing parking spaces should be prorated according to the increase in square footage added to the gross floor area. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KA.LISPELL AS FOLLOWS: SECTION I. The value of a parking space within Special Parking Maintenance District No. 2 shall be and is hereby determined to be $ 8,200.00 which may be paid, on a pro- rata basis, by a property owner within such parking district in lieu of providing additional on -site parking as required by Section 27.26.040(l l ) of the Kalispell City Code. SECTION II. This resolution shall become effective immediately and shall remain in effect until later amended or repealed. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 1" DAY OF OCTOBER, 2007. Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk