HomeMy WebLinkAbout12-17-18 City Commission Packet Materials - A6. Res 4942, Increasing Parking Cash-in-lieu Fee
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Ed Meece, Parking Program Manager
Chuck Winn, Assistant City Manager
SUBJECT: Recommendation of the Bozeman Parking Commission to increase Cash In Lieu of Parking from $5000 to $25,000 (BPC Resolution 2018-04).
MEETING DATE: December 17, 2018
AGENDA ITEM TYPE: Action
RECOMMENDATION: Approve Resolution 4942 increasing the fee for the Cash In Lieu of
Parking payment option to the off-street parking requirement of the Bozeman Municipal Code from $5,000 to $25,000.
BACKGROUND: In brief, the use of Cash-In-Lieu of Parking consolidates public parking into
‘shared’ facilities (ex., parking garage) and encourages the most intense use of available
land/building space for a specific site thus maximizing the investment of building footprint. The
City of Bozeman allows for the payment of Cash-In-Lieu of Parking fees, in the downtown (B-3), as a method to satisfy on-site parking requirements for a proposed development. The fees collected
can be used to improve or expand parking infrastructure in the B-3 district. The current Cash-In-
Lieu of Parking fee of $5,000.00 per parking stall was set by Resolution No. 3283 in July of 1999.
Current estimates for the actual cost of constructing one structured parking stall is approximately
$30,000.
The collection of Cash in Lieu of Parking fees to assist in the funding of new public parking
capacity aligns with the 2018 Bozeman Strategic Plan (strategy #2.2), which recognizes a need to
“strategically invest in infrastructure as a mechanism to encourage economic development”. In
addition, the 2016 Downtown Strategic Parking Management Plan (strategy #6) identifies “re-
evaluate and restructure [of] the current “cash in lieu” program” as important to the City’s ability to plan, build, and manage public parking capacity.
Recognizing that the current rate of Cash-In-Lieu of Parking fees are insufficient to fund the
construction of new public parking capacity in a timely manner, Rick Williams Consulting
provided a technical memorandum that included a template for calculating the cost of Cash-In-Lieu of Parking fees. The Bozeman Parking Commission, and Parking Program Manager,
utilized this template to calculate and proposed an adjusted Cash-In-Lieu of Parking fee of
$25,000.00. In doing so, the Bozeman Parking Commission accepted Mr. Williams’ construction
cost estimates, for the Northwestern US, as applicable to Bozeman.
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The proposed $25,000.00 Cash-In-Lieu of Parking fee, $5,000.00 less than construction estimates,
provides a cost incentive to the development community as well as timely funding for the
construction of new public parking capacity in the B-3.
Originally, the Parking Commission considered applying a 40% discount ($12,006.40) to the proposed Cash-in-Lieu of Parking amount. However, upon further discussion and a recommendation by the Parking Program Manager, the Bozeman Parking Commission adjusted
the amount of incentive from 40% to 20% ($6,003.20), in order to maintain the incentive and create
a revenue stream capable of contributing to the construction of new public parking capacity in a
shorter period of time. Please note that the Cash-In-Lieu of Parking calculation does not include land costs, as these can vary significantly within the B-3. From a practical standpoint, the absence of land costs means the resulting proposed Cash-In-Lieu of Parking fee has a discount built into it
before the proposed 20% incentive is applied.
As a top priority of the Administration, and a strategy recommended in the 2016 Downtown
Strategic Parking Management Plan (# 21 and 26), the acquisition of new public parking facility
assets is a critical element to successfully managing downtown parking needs. As a result, the City of Bozeman and Bozeman Downtown Business Partnership are involved in several efforts to site and manage new public parking assets in the B-3 District. With development pressures increasing
in the B-3, resources for additional parking assets must be identified, and acquisition and/or
construction commencing within the next 24 months. Implementation of a “right-sized” Cash-In-Lieu of Parking fee provides a major portion of the necessary resources for acquiring and/or constructing these new public parking assets. The proposed changes to the Cash-In-Lieu of
Parking more closely aligns the proposed fees with the actual costs, provides an incentive to utilize
the program, promotes further downtown density, facilitates downtown development projects, and
provides resources .
FISCAL EFFECTS: At this time, the costs of maintaining a viable Cash-In-Lieu of Parking program, alongside the larger land use/development processes at the City of Bozeman, are not
significant; and they are absorbed within general departmental operating budgets.
Attachments:
Bozeman City Commission Resolution No. 4942 Bozeman Parking Commission Resolution 2018-04, 6/14/18 Cash-In-Lieu of Parking, Technical Memorandum, Rick Williams Consulting, 12/15/15
Bozeman Municipal Code, 38.25.040 Number of Parking Spaces Required
Research Grid, ‘Cash-In-Lieu of Parking – Montana Cities’, 7/19/18
Report compiled on: November 28, 2018
Sq. Ft.
(Per
Stall)
Hard Cost
Construction
(Per Stall)
Soft Cost
Construction
(Per Stall)
Cost of
Land
(Per
Stall)
Total
Cost to
Build
Stall
(w/o
land)
Fee-In-Lieu @
80% of Total
Cost Per Stall
(w/o land)
350 $23,450 $6,566
Varies by
size and
location
of lot in
B-3 $30,016 $24,012.80
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COMMISSION RESOLUTION NO. 4942
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, MODIFYING THE FEE FOR THE CASH IN LIEU PAYMENT OPTION TO
THE OFF-STREET PARKING REQUIREMENT UNDER SECTION 38.540.050 OF THE
BOZEMAN MUNICIPAL CODE BY INCREASING THE FEE FROM $5000 TO $25000
PER PARKING SPACE AND REVISING PAYMENT PROVISIONS.
WHEREAS, Section 38.540.050 of the Bozeman Unified Development Code
recognizes an ongoing need for additional off-street parking facilities arising from new
development in the B-3 Zoning District; and
WHEREAS, Section 38.540.050 of the Bozeman Unified Development Code allows
payment of Cash In Lieu to satisfy certain parking requirements; and
WHEREAS, City Commission Resolution No. 3283 set the fee for Cash In Lieu of
parking requirements at $5,000.00 for each off-street parking stall, and provided for payment terms
that allowed Cash In Lieu to be paid over a period of years; and,
WHEREAS, after conducting research and considering the matter at their June 14, 2018,
meeting, the Bozeman Parking Commission adopted Resolution 2018-04 recommending that the
Bozeman City Commission increase the Cash In Lieu of parking fee to $25,000.00.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana, that:
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Section 1
Until further action by the City Commission, the required amount of Cash In Lieu to be
paid for each off-street parking stall required by the City of Bozeman parking requirements shall
be $25,000.00.
Section 2
The total amount owed for Cash In Lieu of parking requirements shall be paid, in cash,
prior to issuance of a building permit, business license, or zoning approval as required for the
proposed use. As of the date of approval of this resolution, the City of Bozeman will no longer
accept the installment payment of fees for Cash In Lieu of parking requirements over a period of
time.
Section 3
The Cash In Lieu rate set herein is effective immediately. The Cash In Lieu rate may
be revised at the discretion of the City Commission.
PASSED AND APPROVED by the City Commission of the City of Bozeman,
Montana, at a regular session thereof held on the _____ day of ________, 2018.
___________________________________ CYNTHIA L. ANDRUS Mayor
ATTEST:
________________________________________
ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
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___________________________________
GREG SULLIVAN
City Attorney
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TORIcr W¡¡.LIAMS CONSULTING['¡ r' ki ng & T r-a nsporrati onPO Box 1216Portland, OR 97212Phone: (503) 459-7638E-mail:MEMORANDUMThomas Thorpe, City of BozemanFROM:Rick Williams, RWCOwen Ronchelli, RWCPete Collins, RWCDATE:December 15,2015 (v.2)RE:Downtown Bozeman - Comprehensive Parking StudyTask 3: Strateg¡cUse of Cash-in-Lieu as a Source of Funding for Public ParkingI. BACKGROUNDParking standards in city codes often require that each land use provide parking on-site, or limit the useof parking provided to a specific "accessof' use. This can limit density, increase development costs,challenge small sites, and discourage shared use parking. A common solution to this problem is allowingdevef opers to pay fees into a municipal parking fund in lieu of providing the required parking on-site.The fees are then used to provide centralized public parking in place of on-site parking for individualproperties. By consolidating parking in centralized public lots or structures and offering developers analternative to providing parking on-site, a cash-in-lieu system can encourage in-fill development andredevelopment in existing downtowns, support land use intensification, and reduce the overall amountof built parking through more efficient use of the supply'ln the 1970's the City of Bozeman implemented a Special lmprovement District (SlD) for development inthe downtown. That SID was based on very suburban minimum parking requirements in the code atthat time. The current parking requirements for Bozeman's cash-in-lieu program within the B-3 D¡str¡dare less and result in a large credit for most projects that minimizes the number of spaces to be provided(see: 38,25.040 4.3.8 1-4). This means that unless the project(s) are very large they never need toprovide parking and there will be a tiny amount of CIL funds (assessed at a rate of 55,000 per stall),never enough to build a garage.The fact that Bozeman offers cash-in-lieu is progressive; however, current parking requirements,program format and fee may not provide the funding necessary to develop new parking and support theintensification of uses. ln addition, the current code is not clear on the strategic intent for use of the feescollected, the expectation of an occess entitlement that may or may not be granted to fee payers, or aconsistent and equitable methodology for calculating fees.790
Downtown Bozemon Strotegic lJse of Cash-in-LieuTo this end, the City is interested in evaluating its existing cash-in-lieu option, particularly in its use as areasonable funding source for new public parking facilities. The discussion herein will provide aframework for such an evaluation and for potential revisions to Bozeman's existing cash-in-lieu program.The discussion will also be informed by a reevaluation of the City's current minimum parkingrequirements, which will need to be strategically integrated into whatever fee structure is developed.II. FRAMEWORK APPROACH - PARKING CASH-IN-tIEUGrowth in parking demand is becoming an issue in Bozeman. lncreased traffic related to newdevelopment and visítors attracted to the City's vibrant downtown may create constraints in the existingparking supply. Surface parking lots will become attractive development sites, resulting in potential lossof parking as new development and redevelopment projectsprogress. The cost of providing parking, especially structuredparking, can adversely impact the financial feasibility of newdevelopment. lnadequate parking places burdens on existingdevelopment and is a disincentive for new development. Asdowntown redevelops, the City must find the right balancebetween its role and the role of the private sector in financingand building parking to support new growth.Key challenges for Bozeman in this process are:Continuing to attract new development to thedowntown.Supporting developments constrained by the cost ofparking development while reducing reliance on andimpact of surface parking areas.Recognizing site constraints, including historicpreservation that may limit the ability to incorporate parking.o Removing barriers to new development or redevelopment of existing buildings.o Maintaining and encouraging an urban form for new development that is consistent with thedowntown vision.. Appropriately recognizing previous investments in parking both public and private.Cash-in-lieu allows a new or intensifìed development to buy out of a requirement to provide a minimumnumber of parking stalls. Fees paid by the developer are used by the City to fund development of newpublic parking facilities.aaaRICK WILLIAHS CoNSULTINGiì: r r,r,; t'i, :.rt.l . t |:ti a tThis memorandum ossumes theCity intends to continue to ployo prominent role in owning,mo noging ond (ultimotely)growing its off-street porkingsupply. Therefore, exomini ngond refining the current cash-in-lieu progrom supportsthe C¡Vseffors to creøte o morest rote gi ca I ly coord i n otedporking monogement pløn forthe downtown.AppendixB-Pøge2791
Downtown Bozeman Strotegic Use of Cosh-in-LieuCash-in-lieu is an option to providing parking.l A strong cash-in-lieu program can be a powerful tool for achieving efficientdevelopment through the provision of common, centralizedand/or district parking facilities. Giving developers the option toreduce or eliminate their on-site parking requirement can resultin better-designed and more productive developments andstreetscapes.Offering developers the option to pay a cash-in-lieu for all or aportion of their minimum parking requirement may be anattract¡ve alternative for addressing the challenges outlinedabove, and provide a means for building structured parking inthe future. A cash-in-lieu rate is generally set at a level less thanthe cost for a developer to provide parking themselves. The rate can also be variable to reflect specificbenefits of use between projects; varied (for instance) between those that use more or less parking inrelation to a minimum parking standard. Overall, a cash-in-lieu option encourages developers toseriously consider downsizing their parking need, and to explore shared-use opportunit¡es in reasonableproximity to their development site. When successfully structured, cash-in-lieu programs can reducedevelopment costs, making projects more feasible and providing a revenue source that the City caninvest in a consolidated parking development plan.lmplementing a cash-in-lieu program commits the City to playing a key role in developing and managingoff-street parking, a role that Bozeman already fills. I/¡rs memorondum ossumes the City intends tocontinue ptaying a prominent role in owning, monoging, ond ultimately growing its off-street porkingsupply. Exomining ond refining the current cash-in-lieu program supports the City's effotts to creote omore strotegically coordinoted porking monagement pton for the downtown.'Th¡s will entail activeplanning for future parking, and identifying ødditionol sources of funding to supplement ond leveragefunds derived from cash-in-lieu.31 A private development should not be discouraged from providing parking without City assistance, within therequirements of the code.' Many cities do not have cash-in-lieu or similar programs related to public off-street parking, choosing to put theresponsibility for off-street parking growth completely on the private sector.3 Few cash-in-lieu programs around the country cover the full cost of parking development. Most cities couplecash-in-lieu with other strategically identified revenue sources to create a package of funds that can fully supportnew parking development. These include fees generated from parking, bonds, infrastructure financing districts,parking benefits districts, etc.RIGK }YIITIAHS CONSULTI NGP¿ rk r n g 2,, T r ansp ort¡ t ronFew cosh-i n-lieu programsoround the country cover thefull cost of porkingdevelopment. Most citiescouple cash-inJieu with otherst rateg ico I ly i d e ntif i ed reve n uesources to creøte o pockoge oJfunds thøt con fully supportnew porking development-AppendixB-Page3792
The fund should be flexible enough to allow the City to:Downtown Bozemon Strategic lJse of Cash-in-LieuIII. PROGRAM ELEMENTSAs previously stated, the waiving of minimum requirements in a private development through a cash-in-lieu option requires a fìrm comm¡tment by the City to provide public parking in Downtown.'Clearexpectations regarding the C¡ty's use of funds raised by cash-in-lieu payments should be developed.For Bozeman, there are several considerations in designing and refining the existing cash-in-lieu optionBelow are several program elements that should be considered in refining the current cash-in-lieuoption.A. Use of FundsBarring the existence of immediate funds to construct a parking facility in advance of a cash-in-lieuoption, it is doubtful that the City could commit to a structured facility in the initial stages of a morerobust cash-in-lieu program. As such, payments will need to be collected and allocated to a dedicatedparking fund, configured to provide for a future parking garage when coupled with other fundingsources (e.g., bonding, Local lmprovement D¡str¡cts, urban renewal). so Develop new parking structureso Purchase or lease underutilized private parking in theDowntown for conversion to public accesso Partner with the private sector to add public parking innew developmentsB. Level of ExpectationCash-in-lieu fees are generally calibrated to the level ofcommitment the City makes to the payer for access to an off-site parking supply: an "entitlement" to parking access. Thelower the payer's expectation of entitlement as a result of thefee, the lower the fee assessed. Conversely, the higher theexpectation of entitlement to parking, the higher the fee.Currently, 38.25.040 does not meet this standard. The City willneed to determine its comfort level in terms of expectat¡onwhich willthen dictate the assessed fee. Creation of clearexpectat¡ons regarding its obligations for funds raised by cash-a This would not disregard the viability of a shared use agreement credit if it could be successfully developed andadministered.t Bozeman may already have such a fund established for its existing program. The consultant had not verified thisby the time of this writing.RrcK vvr|-l-rAr.rs CoNSULTTNGParking & TransportationAppendixB-Poge4793
Downtown Bozemon Strotegic Use of Cash-in-Lieuin-lieu payments will result is a more efficient cash-in-lieu parking program. These obligations need to bedeveloped and adopted concurrent with whatever fee is implemented. The present fee charged ofS5,OOO per stall represents approximately L7% of the cost of a constructed park¡n8 space and acorrespondingly low level of comm¡tment.Several key questions about cash-in-lieu are outlined below. The consultant has provided single answersto the questions, but only for context as to how they might be addressed. lt is recommended that thesequestions form the basis of future stakeholder discussions regarding the role of cash-in-lieu within thedowntown parking management plan. Consensus answers derived from this process would then informa revised cash-in-lieu program and set of specific expectations:a. What type of access ent¡tlement is a development assured in return for payment of a cash-in'lieu fee based on an established minimum parking requirement? Entitlements do not implyownership, but long-term rights to parking. These access rights can be attached to the propertytitle and carried with it over time, including transfer in a sale. Because the cash-in-lieu fee isassessed at a rate less than the cost of construction, those entitled to parking agree to pay thecurrent posted rates for parking in facilities built with cash-in-lieu in the form of monthly passes,daily and hourly rates. These rates can be transferred to tenants, employees, and customers.b. ls a development ent¡tled to full access to a specific parking facility, or can access be spreadacross multiple locations? The payment of the cash-in-lieu to the City would allow adevelopment to take advantage of all available parking under the City's control, but would notguarantee parking at any specific facility. This can be an important element when cities begin toassemble cash-in-lieu payments in advance of building a new parking facility; using surplus inexisting supplies to accommodate cash-in-lieu entitlements.c. Are there proximity ent¡tlements that assure access within a specified distance of adevetopment s¡te? The City would ensure that development of new parking funded with cash-in-lieu revenues is located within the Downtown Parking Management area. The areaboundaries and, in turn, the reasonable proximity to the development would be determined bythe City. The current code limits off-site parking to a 1,000 foot distance (just under % mile or aabout three blocks downtown.d. Can access ent¡tlements be changed over time? For instance, could parking be moved fromone location to another over time as devetopment patterns evolve? Yes. The City would retainthe right to redevelop parking facilities and to provide entitlement parking in different locationswithin the downtown over time. This type of flexibility is important, as was referenced in (b)above. The City may need to create temporary or interim sites as new structures are built.Surpluses within the parking system will need to be act¡vely monitored so that ent¡tlements maybe allocated accordingly.RIGK }VILLIAMS CONSULTINGPark ¡n g & T r ansportâtionAppendixB-Page5794
Downtown Bozemon Strotegic Use of Cosh-in-Lieue. What if the City is collecting cash-¡n-l¡eu payments, but cannot concurrently build a parkingfacility? Cash-in-lieu could be used to build interim surface lots to meet entitlements until anew supply (e.9., a garage) is both needed and feasible. lf the City cannot meet near-term cash-in-lieu demand requirements, the program can be suspended to ensure that exist¡ng/pa¡dentitlements can be accommodated.f. Can cash-in-lieu payments be used by the City to fund other forms of access (e.g., transit orbike/walk optionsl? ln some cities, that is the case. However, given the costs necessary todevelop structured parking, it is not anticipated that cash-in-lieu payments, as currentlyconfigured, would allow the City of Bozeman to fund other forms of access.E. Are there any other charges associated with cash-in-lieu to those with access ent¡t¡ements?There could be. Given that most cash-in-lieu entitlements are assessed at a rate less than thecost of actually developing off-street suppl¡ agreements formalizing the entitlements wouldallow the City to charge the then-posted monthly, daily and hourly rates at public facilities in thedowntown. As demand for parking increases, monthly and daily rates would also increase. Suchcharges are necessary to cover, at minimum, costs of maintenance, operation, andadministration of the public facilities, as wellas debt service.h. What happens if a development does not fully utilize its access ent¡tlements? Given thataccess is an entitlement and not a form of ownership, the City (or owner of the parking facility)has the right to sell underutilized parking to the general public on a month-to-month basis. Thisensures that the CiÇ can maximize parking on weekdays, weekends, and evenings. Accessent¡tlements give priority to those with entitlements, but do not prevent the City fromcapitalizing on unused space. Management of cash-in-lieu entitlements w¡ll require accurate andongoing data on occupancy and utilization of parking.C. Rate and FormatThe appropriate rate for a cash-in-lieu varies by city and is influenced by the type of parking provided(surface versus structure), costs of land and development in specific areas, and expectat¡ons assoc¡atedwith the level of entitlement granted with payment cf the fee. in order to make an informedrecommendation, the consultant team reviewed cash-in-lieu programs in jurisdictions throughout thecountry.The City of Tualatin, Oregon assesses a cash-in-lieu of 53,500 per stall required. The City of Bend,Oregon's cash-in-lieu is 526,000.6 A 2OO8 study of 27 cities by Carl Walker Consulting established a rangeof fees between 52,000 and 527,520, with an average of S11,500 per stall. The formula for determining6 Tualatin's original fee-in-lieu was calibrated at approximetely 50% of the cost of developing surfoce porking andBend's fee was c¿librated at approximately 67% of the cost of structured porking.RIGK WIIIIAHS CoNsuLT¡NGParking & TransportationAppendixB-Poge6795
Downtown Bozemon Strotegic lJse of Cash-in-Lieurates in the sampled cit¡es was generally based on a wide variety of factors, both parking-related andnon-parking-related; as such, the literature offers no clear standard on which to draw in Bozeman.It is recommended that the City of Bozeman consider restructuring its current cash-in-lieu programaccordingly:1. The current unit cost of garage development in the Pacific Northwest is approximately 528,000to S35,OOO per stall, including land, design, and construct¡on. Variation in the range is mosttypically influenced by land cost. This range offers a good starting point for a cash-in-lieu ratediscussion, which would be refined with funher reseorch on the octuol cost of developingporking in Bozemon versus the average used here for discussion purposes.2. Once a unit cost is established for parking in Bozeman, base the cost of cash-in-lieu at a rate lessthan this cost -e.g., 60% (see Section lV. A Sample Methodology for Rate Setting, below).7 Asdescribed earlier, the lower cost is intended to encourage developers to downsize their on-siteparking and explore the shared-use opportunity that would exist within a consolidated publicparking supply. The cash-in-lieu rate should provide a reasonable funding base from which theCity can then develop a full funding package that would likely leverage other funding sources(i.e., user fees, bonding, local improvement district, etc.).3. Establish a periodic review of the cash-in-lieu program, allowing the City to evaluate (a) thenumber of developments exercising the options, (b) factors còntributing to developers' use ornon-use ofthe program, and (c) adjustments to the rate as necessary based on (a) and (b). Theperiodic review would also evaluate the capacity of the City to absorb new cash-in-lieuentitlements.4. Adjust the cash-in-lieu payment annually based on the Engineers News Record lndex (ENRI). TheENRI is a respected standard within the industry and would provide an objective index foradjusting City fees and charges associated with a cash-in-lieu program.t5. Recognize that other funding sources will be necessary for successful development of publicparking facilities, particularly structured facilities. These could include public facility districts,business improvement districts, local improvement districts, general fund allocations, and stateand local grants.Assuming the City intends to create a more efficient downtown, one capable of accommodating theintensification of land uses, continuing to offer a cash-in-lieu option is reasonable and strategic. This ist This figure was chosen only for purposes of discussion. lt is hoped that this memorandum is used as a basis forstructuring work sessions and/or in-depth discussions with stakeholders to develop a rate format that is bothappropriate and feasible for Bozeman.t the City of Bozeman currently uses the ENRI for inflation adjustments for impact fees and this source has beenaccepted by the development community. There are other construction indexes as well, including the Rider LevettBucknall quarterly construction cost index and the Turner Construction index'RIGKwllIIAHS CONSULTINGParking & Tra nsporta tionAppendixB-Page7796
Downtown Bozemon Strotegic Use of Cash-in-Lìeuunderscored by the fìnancial challenges associated with developing structured parking facilities. lt isrecommended that the City reevaluate and refine its current cash-in-lieu program so that it can besuccessfully applied as new development and intensified uses emerge. That process should take placewithin the context of the elements outlined above.IV. A SAMPLE METHODOLOGY FOR RATE SETTINGAs stated above, a review of other jurisd¡ct¡ons did not provide a clear methodology for determiningcash-in-lieu rates. Generally, the rate bears some relationship to the fu¡l cost of constructing a surface orgarage parking facility. Most jurisdictions set rates at less than the full cost of construction. The feeshould be an incentive for developers to work with the City to consolidate the parking supply in districtfacilities. Cash-in-lieu funds are then complemented by other sources to construct the consolidatedsupply.For Bozeman, new cash-in-lieu payments would be allocated toward future parking garagedevelopment, as full funding for a garage is likely not in place at this time. Future cash-in-lieu fees wouldbe calibrated to the full cost of constructing a garage in downtown Bozeman, a key change to thecurient program.tTable 1 offers a ootential methodology for deriving a cash-in-lieu rate. The discussion that followsprovides additional information and data sources. Any methodology would need to be regularly revisedand data sources refreshed, as stated in the discussion of Rate and Format above.INOTE: The cost ossumptions used in Toble 7 ore considered reasonoble bosed on the consulting team'sexperience in Pocific Northwest porking goroge developments. Finalfigures should be informed byødditional discussion with stokeholders and reseorch in the octual Bozemon morket. The purpose of thisexercise is to provide o reolistic ond usoble fromework for structuring o cosh-in-lieu approach ondfocilitoti ng discussion.le The final fee rate would be completed as per Section lll, c, Rate and Format above.RrcK Wt|-LlAÎ.rs CoNSULT|NGP¿rking & Tra nsporta rionAppendixB-Page8797
350Square FeEt PerStall3s0Square Feet PerStallAs67.ooHard Cost ofConstruction perSquare Foots23,450Hard Cost of€onstruction perstall(GaragelBS18.76Soft Cost ofConlruction per' Square Foots6,s66Soft Cost ofConstr¡tet¡on perstalf (@ 28%oÍhardcN/A@st of Land PerStall per SquareFootVaries by size oflot/mix of usesand size ofSarageCost of tand perStallDs8s.76Total Cost toBuild perSquare Foot(w/o landls30,016Totel Cost toBuil{ perStall(w/o:landlESs1.46Fe+in-lieu@60% of TotalCost per SquareFoots18,O1010Fee-irr-lleuc'609ô of TotalCost per staltFDowntown Bozemon Strotegic Use of Cosh-in-LieuTable 1Sample Model: Cash-in-lieu Rate MethodologyA. Squore feet per stallThe totalsquare feet per structured parking stallvaries greatly, ranging from as little as 300 SF per stallup to 4OO SF per stall.11 ln general, 350 SF per stall is a reasonable standard used in most privatedevelopment proforma, which accounts for the parking stalls, two-way drive aisles, and area forpedestrian ways and plazas, and is consistent w¡th efficient and attractive facilities constructed inmedium-sized cities.l2 This number is reflected in Column A in Table 1 above.B. Hard cost of constructionHard costs are direct costs incurred by a specific construction project. For a structured parking facility,this would include site preparation, including labor, materials, and equipment.Several West Coast sources were evaluated to determine the hard cost of constructing a garage parkingstall in an urban setting like Bozeman. A 2010 study in Ventura, California estimated hard constructioncosts for a 283-stall downtown parking garage at 523,288 per stall (567.25 per foot).13 A studyconducted for Providence Health Group in Portland, Oregon estimated the average hard cost of above-10 As stated above, the final fee would be adjusted periodically (preferably annually) based on an adopted index ofconstruction costs.11-5eLavoutConsiderations.htp as well as WPI (2008), Porking Cost, Pricing and Revenue Colculotor, Victoria TransportPolicy lnstitute (www.vtpi.org); at www.vtpi.org/pa rking.xls't2^5eensta I ls/13 See Rick Williams Consulting, Review/Assessment of Block 35 Associates Porking Structure Proposol, January 3,20r7RICK \^/ILLIAMS CONSULTING::. :tl'ii:'--i :ilriAppendixB-Page9798
Downtown Bozemon Strotegic Use of Cash-in-Lieugrade park¡ng construction at 524,661 per stall (or SZ1.SO per square foot) for a 384 stall garage.to A2015 study by IPD Consulting and Rick Williams Consulting for Santa Monica, CA estimated hard costsfor a 500 stall garage (with retail) at 522,785 per stall (SSS.fO per foot). Walker Parking Consultantsestimated hard costs for development of a 500-stall above-grade parking garage in Venice, California tobe S18,O1O per stall (SSS.OO per foot).lsFor purposes of this exercise, the consultant used a conservative estimate of 567 per foot hard cost forparking structure development. This is reflected in Column B in Table 1.C. Soft costs reloted to constructionSoft costs are those incurrêd in addition to direct construction costs. ltems generally categorized as softcosts include design and design fees, legal fees, permits, engineering, licensing fees, toxic report fees,and plan check fees. A reliable and widely used source for estimating soft costs is RSMeans and ReedConstruction Data. These databases serve as national resources for tracking construction costs.According to a recent search of Reed Construction Data, soft costs for parking construct¡on generally runat about 3t% of hard costs.16 A 2015 parking project in Santa Monica, California, in which Rick WilliamsConsulting was involved, calculated soft costs of 25o/o, as developed by IPD Consulting, an internationalengineering and project management firm.For purposes of a base methodology for Bozeman, the consultant used a soft cost calculation of 28oÁ ofhard costs; an average of multiple data sources that includes national sources (e.g., RSMeans) and theexperience of the consultant team. This is reflected in Column C in Table 1.D. Cost of londLand costs are generally difficult to establish for a model such as this, and can be "spread" differentlyinto a development depending on the mix of land uses that might be associated with a parking garage(i.e., how much of total land cost is allocated to the overall per stall cost in a development proforma).Column D, Table 1, is left open in this model, assuming that if such a model were used by Bozeman, realcost information would be developed specific to a site and applied accordingly in determining areasonable cash-in-lieu rate.lasee JE Dunn, Hard Cost Estimate Sheet for POPlslnformation provided by Walker Parking Consultants. MSU is also currently in construction for a new parkinggarage. The MSU project could provide e current and locally relevant data point to be included in any finalcalculation of construction costs for purposes of establishing a revised cash-in-lieu fee.16 htto://www.reedconstructiondata.com.RICK wllIIAÎ'IS CONSULTINGParking & Transporte tionAppendixB-Poge70799
Downtown Bozemon Strotegic Use of Cosh-in-LieuE. Totol cost to buildBased on the methodology in Table 1, the total average cost of a structured, above-grade parking stall inBo¿eman would be 530,016 per stall or $$S.ZO per square foot per stall, assuming 350 square feet perstall built. This is reflected in Column E in Table 1 above. Again, this does.not assume the cost of land.F. Cash-inlieu rotelf the actual construction cost of a stall is 530,016 (Column E), the total cost would be factored by apredetermined percentage (in this case 60%) to derive an in-lie-u fee rate of 518,010, or $St.¿0 per foot(Column F).Bozeman already provides a cash-in-lieu option for new development and/or intensification of landuses. The program needs to be reevaluated to ensure that ¡t offers developers a reasonable option toconsider, and provides a sound financial basis for the City to build new parking facilities. The fee must becalculated using a credible market-based methodology that can be regularly updated as economics andparking development costs evolve. The rate must be calibrated to reasonable expectations for accessthat the payer can rely on. Finally, the fee must be strategically coordinated with other funding sourcesto ensure that the City has a financially feasible system for offering the cash-in-lieu option as adevelopment incentive, and can meet any demand for parking by those who pay the fee'V. SUMMARYThe authors of this memorandum have endeavored to provide context for and key elements of a cash-in-lieu program as an option for managing and growing downtown Bozeman's parking supply' Thisinformation is intended to facilitate additional discussion and questions from staff and stakeholders onthe continuing role of cash-in-lieu, and how it ¡s integrated into the downtown's parking and economicdevelopment planning. Cost estimates are only a means to focus discussion and create a platform forexamining, refining, and clarif,iing Bozeman's current program. The consultant team hopes theinformation provided helps to increase understanding of cash-in-lieu and st¡mulate discussion on theappropriate role for such a program in the larger context of a strategic downtown parking managementplan.RICK VYI|IIAHS CONSULTINGP¡, I ¡ rr 1 I 1 r ;ri1[;:rf l¡ !:arìAppendixB-Poge7L800
Excerpt. Bozeman Municinal Code38.25.040 Number of Parking Spaces RequiredA.3.(b). Cash-in-lieu modifications to parking requirements in B-3 district. Where all or part of the requiredparking spaces cannot be irovided foia propãs"d u." in the B-3 District, either through ownership or leaseättn" ã"ó.rsary land, the petitioner may'satisfy the parking requirements by providing an equivalent cash-in-lieu payment according to the following provisions:(l) No building permit shall be issued, nor shall any use of property be initiated, unless a satisfactory cash-in-lieu payment is received by the department of administrative services;(2) The parking commission shall review and consider all requests for cash-in-lieu payments and fumish awritten and dated certificate, signed by the parking commission chair, authorizing cash-inJieu payments' Acopy ofthis certificate shall be-presenied to the chiefbuilding official and planning director before abuilding permit is issued or the use instituted;(3) For each required parking space not provided, payment shall be made to the city administrative servicesaeiartment as siecifieä by stanåard payment requiiements established by the parking commission;(4) All real propeÍy assessed by special improvement district (SID) No. 565, or other similarly adoptediàpronement diätrióts designe spaces within the B-3 district, shall not berequired to provide additional quired at the time of the sID adoption,pråvided thä use of the real pr ns unchanged from the initial assessments ofSIO No. 565, or other similarly adopted improvement districts;(a) In the event that a ne\M use or an expansion is initiated on any portion of real property or improvementssiúsequent to the âssessments for SID No. 565 or other similarly adopted improvement districts, thenparkinþ space requirements shall be satisfied prior to initiation of those new or expanded uses.802
Montana Cities:Cash ln Lieu of ParkingNotes7|L9/2OL8@BillingsGreat FallsHelenaKalispellMissoulaWest YellowstoneN/AThey use to allow ClL, but stoppedthe program in 2010; businessesdidn't understand the concePt andwere discouraged by the fee.Parking reductions for bicYcleparking, but no CIL available.N/ALast uPdate of fee was over twentYYears ago; rate was raised to 53,000in early 90's but reduced due to fears$1,200/space it would hamper development.804