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SA Page 34 1. Optional. The first method would be to allow the developer to decide if he/she wants to take advantage of the program. If they want to pay the fee, they are allowed to automatically. If they want to park on-site, they may. 2. Discretionary. The second alternative is to retain discretionary authority over the program. Interested developers would then apply for the program and would have to demonstrate that it is excessively difficult to construct the parking- on-site and that allowing them to pay the fee would be a benefit to the City. If implemented, this approach is used in tandem with the optional approach. 3. Mandatory. The third option would be to actually require that the fee be paid and prohibit the parking from being provided on site. This is used by some cities, such as Cannel, who do not want private parking lots and garages to proliferate in their downtowns. All of these systems are legal and in current use in many cities-which one we choose is up to us, depending on our goals. It is recommended that this program be both optional (meaning developers can provide parking on-site if they wish) and discretionary (meaning that the ability to pay the fee is not automatic and that the City can examine each application to pay into the fee for its own merits before approving the project). While many developers will chose to apply for the in-lieu program, some developers may prefer to provide their parking on-site. As long as it is done with a good design, on-site should be allowed. In some circumstances in-lieu parking may not make sense, however, and the City should retain the right to deny applications if this is the case. Setting the In-Lieu Fee There are two ways to set in-lieu fees: , 1. Real Cost 2. Reduced Fee With the Real Cost approach, the in-lieu fee is based on the actual costs of providing the parking spaces in a new public facility. The assumption is usually that the City will construct a parking garage, so the cost of land and the cost of the construction of the new garage are divided by the number of new stalls that would be gained in the new facility, and the fee is based on the resulting figure. The advantage of this approach is that the City does not have to pay for the new garage, but rather it is completely paid for by the development that generates the need for it. Palo Alto uses this method for setting their in-lieu fee, which is $50,994 per space. With the Reduced Fee approach, cities set the price of the in-lieu fee be/ow the actual cost of building the new structure. The difference is made up from other sources such as parking assessment district or the future revenue generated by the new garage. The advantage to this method is that it could be a major stimulus to development and business creation by lowering the costs of providing parking. Palm Springs uses this method, and their fee is only $4,000 per space. According Professor Shoup in The High Cost of Free Parking, "the lower in-lieu fees have stimulated economic activity and have led to the opening of many new restaurants on Palm '1>t1~~ 27 .~".".. ..... _k...., __~., .._.. ___.. ._.._. ._...._ .... _0..' _.___..u_________.... ...__._____..~,_.__._..___, . .