In-lieu fee perspective

An in-lieu fee of $30,000 a parking space? That sounds like a good deal when compared to a parking space in San Francisco that recently sold for $85,000. But there are a couple of differences: In downtown San Francisco, parking is very scarce, and for $85,000 you get a deed to an actual parking space. In Del Mar, the $30,000 goes to providing shuttle service and public parking. Del Mar’s in-lieu fee provides nothing more than a waiver of parking requirements.

The staff report reasons that a $1,000 yearly in-lieu fee is 50 percent less than a parking meter fee. But again, that parking meter comes with a parking space.

What’s the correct amount of an in-lieu fee? The staff report reasons that building a parking garage costs $30,000 per space, and amortizing it over 30 years is $1,000 a year. Is $1,000 a space per year a reasonable amount to charge a property owner for waving the parking requirements? Let’s put it in perspective:

The City claims 1201 Camino del Mar . . . which is unquestionably the best-parked building in this town . . . is 38 spaces short of complying with your ordinance. $38,000 a year amounts to only 20 percent of the rent from those two spaces for which the City wouldn’t issue occupancy permits. But it probably amounts to 50 percent of the profits, because there’s other building expenses involved. And If I had a loan on the property, it might be 100 percent of the profits.

Whatever amount you determine to be the appropriate in-lieu fee, I’ll have to pay it, because the law requires that I mitigate my damages. And I agree to pay it yearly during the time those food-serving spaces are occupied; with the first payment made at the time a business license is issued. I also agree to contract with the tenants, with enforcement provisions prior to occupancy. But I won’t place a million dollar mortgage on my property in return for the right to lease it.

George Conkwright

1201 Camino del Mar