By Doby Fleeman
Parking in Downtown Davis has become a challenge over the past decade. Planning for a new downtown parking structure has been in the works, but the ground rules changed when Davis lost its redevelopment agency nest egg in 2012. The focus had to change from “why” and “where” to “how” the city pays for the project. This is about how we solve the problem.
Some of the talk about paid parking is “Who pays for the construction and how?,” with revenues from parking fees being used as the primary source of repayment. In an opinion piece last week, the communities of San Luis Obispo and Boulder, Colo., were shown as shining examples of how paid parking can be a positive means to ensure at least one free spot per block while providing ongoing revenue for transportation-related initiatives.
Comparison with these cities is useful, framing a larger discussion in our community about two issues: 1) an understanding of Davis’ role in the regional economic structure and 2) our ability to finance municipal services and essential infrastructure.
Equally useful, it’s an opportunity to compare community planning processes, development standards and local enforcement policies and the role they play in long-term community strategies.
Geography and hubs
San Luis Obispo and Boulder (and to a lesser degree, Chico) are communities that by virtue of their location have become regional destination economic hubs. Each of these communities is the “big town” in their region. The magnet effect of such regional hubs results in significantly increased per capita retail sales, and sales tax. Such cities have the ability to impose policies like paid parking without fearing a drop in customers.
We are not a regional hub. Our nearest neighboring communities are close — 10 to 20 miles — far closer than the 35-mile drive from San Luis Obispo to Santa Maria, or the 45 minutes from Boulder to Denver, or the 85 miles from Chico to Sacramento.
Just as important is the benefit of tourism in a town’s economy. For a college town, tourism would drive visitors with money to spend into town during the summer months; the benefit would be profound. And, in terms of paid parking, much of the burden is paid directly by such visitors.
Davis has built its reputation as an important destination for arts, entertainment and dining, but we have more to do before we achieve “must visit” destination status for summer travelers. Notable downtowns like La Jolla, Carmel, Napa, Sonoma and Healdsburg — all known as tourist destinations — have thus far shunned paid parking, in part because none of them is an isolated, regional destination hub like San Luis Obispo or Boulder.
Policy and planning
For a meaningful comparison of economic development strategies, it would take a full study to understand the differences in approach between Davis, San Luis Obispo and Boulder. But it’s possible to make a quick comparison of how each of our communities has approached the issue of downtown development and reinvestment.
Building on UC Davis’ drawing power, we’ve made great strides in terms of positioning downtown Davis and the Davis Farmers Market as regionally recognized destinations for recreation, family entertainment, the arts and a destination dining experience unrivaled in the region. Davis is a vibrant, thriving model of what a downtown should be, so it’s understandable that we’ve exceeded the limits of available parking.
It’s important to understand how the parking situation was allowed to deteriorate over the past 10 years and why Davis has been unable to coalesce around a strategy to deliver this critically important piece of downtown infrastructure.
Basic economics: Demand for downtown property, even in today’s recovering market, is insufficient to support the cost of developer-furnished parking. As the result, for most of the past 10 years, Davis has offered a “fee holiday” on traditional in-lieu parking assessments. In lieu-fees are required of developers when they don’t meet prescribed on-site municipal parking standards. Such in-lieu fees are collected to help offset the future construction costs of structured public parking.
In the 1990s, Davis established an in-lieu fee at $8,000 per space for new construction. Then the amount was reduced to $4,000. For several years now, this charge has been waived entirely, and when an office space is converted to a restaurant — which typically generates much higher parking demand — the city has never assessed a fee.
What’s the point? San Luis Obispo currently imposes and enforces an in-lieu one-time fee of $18,641 per space. Its cost is 40 percent of the estimated per-space construction cost (excluding land) for structured parking. In the case of restaurants, outdoor dining areas (Bistro 33, for example) are included in calculations of required parking demand. In the case of “changes in use,” San Luis Obispo imposes an impact fee of $4,660 for any increase in demand created by the new use.
To see the potential differential demand created by different user groups, a study by Stein Engineering for Metro Downtown Portland calculated minimum parking requirements for office space as 2.7 spaces per 1,000 gross square feet while restaurant use was computed at 15.3 per 1,000 GSF — more than a five-fold increase in demand when changing from office to restaurant.
In fairness to the Davis Parking Task Force members, this type of information and scope of analysis was neither recommended by staff nor requested by the City Council. Perhaps it was deemed overly broad for the scope of its review. But it’s difficult to make parking planning decisions without this information.
Three facts: 1) You can only give away free stuff for so long, until the supply runs out; 2) we don’t exactly have developers lining up to build new buildings with commensurate assessments for new parking impact fees; and 3) downtown property owners are not keen on new, self-imposed assessment taxes to fund new parking structures — primarily because of the impact these new taxes would have on the rents their tenants would be required to absorb.
So, we’re in a different era today than existed in the go-go era of the 1960s and ’70s, when local business owners and the City Council encouraged the downtown auto dealers to make a strategic relocation to Chiles Road, opening up the existing downtown surface lots.
Led by downtown business leaders who recognized the link between convenient, free customer parking and the ability to attract new retail businesses along with the new construction and reinvestment it would bring, today’s surface lots were acquired through assessment fees charged to downtown property owners.
Today’s situation is significantly more complex. In the 1960s, the new hot ticket was automobiles and tomato soup. Then the growth of the university and its associated housing boom propelled the Davis economy throughout the 1980s and ’90s.
Today, however, what’s the “next big thing” for this community? That’s the question we should be asking. How do we prepare to adapt to that future? How do we ensure that we continue to face the future on our own terms — not beholden to forces beyond our influence?
Investors’ willingness to invest is based on their assessment of the risks involved as measured against the anticipated opportunity and demand for their products. Investor confidence is key.
Are today’s business owners prepared to reinvest what it might take to finance a new parking structure? Are tomorrow’s real estate developers prepared to pay for their project’s fair share of any new parking infrastructure to be built? Are new tenants willing to pay increased rent in order to cover these additional landlord costs — in addition to higher water bills and increased general fund expenditures to fund long-overdue roadway maintenance costs?
Perhaps we should ask today’s developers and business owners directly: What would it take for you to invest in downtown Davis? What would it take to provide up front the costs of new parking infrastructure and still feel confident that your tenants could absorb the additional carrying costs?
Sure, the easy choice is “let’s adopt paid parking in downtown Davis,” but does that really move us along as a community on the much larger issues that will affect both our generation and generations to come?
— Doby Fleeman is co-owner of Davis Ace in downtown Davis.