Galleria Corporate Center

Some tenants at the Galleria Corporate Center purportedly provide shuttle rides for employees who park their vehicles in downtown public spaces rather than inside the corporate garage.

Scottsdale residents finally have their first look at proposed parking code changes – over a year after City Council first directed staff to address downtown business owners’ concerns that code deficiencies would lead to a shortage of spaces.

Council requested the review in February 2020, but little progress was made due to pandemic-related disruptions, according to city staff.

That prompted Councilwoman Kathy Littlefield to propose a moratorium on downtown development until parking was addressed.

City staff’s proposal – which could go to Council as early as May 4 –revises parking requirements for new downtown condo and apartment complexes, hotels and office developments.

Parking requirements for new multifamily projects would increase from one space per studio or one-bedroom unit to 1.25 spaces per studio and 1.3 per one-bedroom.

The proposal would also decrease requirements for units with two or more bedrooms from two spaces per unit to 1.7 spaces per two-bedroom unit and 1.9 spaces for units with three bedrooms or more.

Those new requirements mirror the parking code already in force for apartments and condos outside of downtown.

The proposal would also create a guest parking requirement for new multifamily developments throughout the city that would require developers to provide one additional guest parking space for every eight units.

Scottsdale City Planner Bryan Cluff said staff benchmarked the new proposal against 11 other Valley cities and found it would give Scottsdale more robust requirements than most other municipalities.

According to Cluff, four of the 11 cities have no guest parking requirement and another four require one space per 10 units. 

Only three cities have requirements more stringent than the one guest spot per eight units currently proposed in Scottsdale.

The city is considering reducing overall parking requirements for hotels.

However, the city would also would require adequate employee parking on site as a way to address concerns that hotel workers are taking downtown spots that business owners want reserved for customers.

City staff is proposing decreasing the hotel parking requirement from 1.25 to 1 space per room – which Cluff said is closer to industry norms for suburban areas but is still high for a downtown core.

“Based on data both local and national available to the city, it’s estimated that the current parking demand for travel accommodation uses in the Old Town area is probably not much more than 0.8 spaces per room,” Cluff told the Planning Commission on March 24.

Former Scottsdale Transportation Director Paul Basha, who now operates a consultancy that advises developers, told the commission that the actual needs of downtown hotels are around 0.6 spaces per room, citing surveys of hotel operators.

Cluff said developers downtown can still request an additional decrease. City staff can approve decreases up to 20 percent to 0.8 spaces per room while larger ones require Council approval.

However, any hotel developer that requests a reduction in parking requirements will also have to submit a parking plan identifying how it will provide employee parking on site.

Hotels with conference rooms or restaurants will also have to include plans showing how they will provide parking for those uses.

The new proposal will also address longstanding concerns that downtown call centers are overextending the existing public parking supply.

In 2019, the Progress reported that some tenants at the Galleria Corporate Centre – including Yelp – were providing a shuttle service to employees who parked in public spots downtown rather than in the Galleria’s garage.

The new regulations would create a new category requiring call centers to provide one parking space per 200 square feet, up from the one space per 300 square feet currently required.

City staff presented the proposed parking changes to the public last week at two open houses.

While the myriad of proposed changes addressed some concerns raised by Council in February 2020, local stakeholders are not completely satisfied. 

Some stakeholders, especially downtown gallery owners, have long scoffed at projections by developers, planning experts and city staff showing that an increase in rideshares like Uber means less parking should be required at apartments and hotels.

But opponents argued that any inroads that rideshares made into Arizona’s car-centric culture were largely reversed by COVID-19.

Business owner French Thompson pointed to skyrocketing rates for rental vehicles in Arizona as evidence.

Jonathan Weinberg, CEO and founder of car-rental site AutoSlash, wrote on the company’s blog in March that there is an impending car rental “apocalypse” caused by a combination of low supply and demand that has risen steeply for the first time since the pandemic began.

He wrote that several major markets, including Phoenix metro, were sold out of rentals almost a week out.

Weinberg told Forbes in early March that last-minute rentals in Phoenix were going for as much as $700 per day.

Some residents and property owners also voiced opposition to the apartment proposal.

The Coalition of Greater Scottsdale sent a letter to city staff requesting a further increase for multifamily developments to 1.5 spaces per one-bedroom unit and keeping the two-space requirement for units with two bedrooms or more.

 The group also asked the city to increase the new guest parking requirement to one space for every four units in a complex.

Downtown Gallery owner Bob Pejman argued that the decrease in parking requirements for larger units canceled out the increased requirements for studios and one-bedroom apartments.

“This is essentially a wash, and ends up with the same parking space count given an equal mix,” Pejman wrote to staff.

The apartment proposal was opposed by nearly all 21 attendees at the March open house for either providing too much or too little parking. 

According to a poll of attendees, 71 percent thought the proposal didn’t do enough to address the problem.

Cluff said if the new rules were applied to some recent apartment developments downtown, it would have resulted in more required parking. 

“The new ratio in combination with the guest parking requirement of one per eight results in an average increase of 15 percent in required parking,” he said. 

The proposed changes would also modify and remove some existing programs designed to reduce parking requirement burdens on small property owners who plan to do minor upgrades to their properties, including the in-lieu parking program.

That program allows smaller property owners downtown to pay into a parking fund when they cannot meet city requirements on site. That fund affords them a credit and is then reserved to pay for future new parking.

Critics have called the in-lieu credits “phantom spaces,” arguing the city charges too little per space and has not used the fund to build new parking in years.

Under the new proposal, property owners could no longer purchase in-lieu spaces but could still lease them, meaning the in-lieu credit would not run perpetually with a property and would expire if the space was no longer needed.

That pitch did not sit well with COGS as the organization wants to get rid of the in-lieu program altogether.

“The collected funds have not provided new, much-needed parking garages, nor replaced the aged Civic Center Parking Garage,” according to the COGS letter. “The 3rd Avenue garage has been predominately occupied by Call Center/Galleria employees to the detriment of 5th Ave and area businesses and its employees.”

At the community open house on March 30, Sonnie Kirtley, COGS executive director, said she saw no difference between the new proposal and the existing in-lieu program.

Cluff offered little clarity on that point, only stating that is” something that we’re continuing to consider through this process.”

According to city records, 1986-2020 saw 496 in-lieu spaces permanently credited and 855 built with in-lieu funds. The city currently charges property owners $13,800 per in-lieu space – well below the what it actually costs to new spaces.

As of 2020, the in-lieu fund was around $306,000, which would only build between six and 15 spaces based on city and developer estimates that have priced parking at anywhere from $20,000 to $50,000 per stall.

The $319-million bond approved by Scottsdale voters in 2019 also included $20-million to construct parking downtown but the plan did not address when the city would use those funds.

The current proposal only addresses issues directly tied to the city ordinance but does not include changes to downtown parking management strategies that were requested by Council in February 2020.

Cluff told the Planning Commission the city could come back with a review of those strategies – including adding more timing restrictions, considering paid parking for special events, and improved way finding – at a later date. 

One main issue holding back those other recommendations is the lack of an updated parking study for downtown that would analyze where new parking is needed and where the existing supply is underutilized.

The last study was produced in 2015.

“We were hoping to be able to have an updated parking study, but because of the pandemic, a real-world update of those downtown parking conditions has not been possible,” Cluff said.

Cluff said the pandemic disrupted normal traffic and activity downtown last year, meaning any study in 2020 would not reveal useful data.