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Court orders Palo Alto to refund parking fees to developer

Original post made on Mar 21, 2023

Palo Alto will have to refund more than $900,000 to a downtown developer after a state appeals court ruled Monday that the city had illegally imposed parking fees without having a real plan to spend this money on parking.

Read the full story here Web Link posted Tuesday, March 21, 2023, 8:10 AM

Comments (13)

Posted by Annette
a resident of College Terrace
on Mar 21, 2023 at 9:26 am

Annette is a registered user.

That was one expensive decision that CC made a few years ago. I remember the meeting. Kniss saying times had changed; former mayor Kleinberg saying that the city was breaking a promise. Both were right. I doubt Chop Keenan needs the $972k but it is one heck of a punctuation mark. I hope there is an established fund for legal judgments against the city so that this payout has no impact on city services. Residents should not bear the brunt of this one.

Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Mar 21, 2023 at 10:17 am

Online Name is a registered user.

@Annette's absolutely right that residents shouldn't have to pay for yet another costly mistake but instead we're always on the hook.

Posted by Evergreen Park Observer
a resident of Evergreen Park
on Mar 21, 2023 at 10:49 am

Evergreen Park Observer is a registered user.

I hope the ruling does not prevent requiring in-lieu fees that are more clearly worded as to the intended use. If a commercial developer builds a facility and gets an exception from providing parking at is own expense, it should be required to pay the City for the costs of mitigating the increased traffic and parking needs created by the facility. Mitigation can take many forms -- new parking spaces that the City builds (for which -in-lieu fees have never been sufficient to cover the real costs of construction) or investments in public transportation or ride share apps. Chop Keenan should know full well that he got a great deal by not providing parking for his own developments. Shame on his greed for asking for the money back.

Posted by Cheryl Lilienstein
a resident of Barron Park
on Mar 21, 2023 at 11:08 am

Cheryl Lilienstein is a registered user.

Ugh. In lieu fees showing up again as the city's gift to developers that they always were. The developer gets what they wanted all along. No requirement to provide parking and a refund because the city attorney (?) neglected the requirement to report? At least, this is what it looks like. Who else will benefit from this ruling?

Posted by Neilson Buchanan
a resident of Downtown North
on Mar 21, 2023 at 12:13 pm

Neilson Buchanan is a registered user.

This is a good time to re-examine the benefits granted to certain landlords via the University Avenue Parking Assessment District(PAD). I admit that I have no legal expertise. The creation and original structrure of the PAD probably have legal authority. However, extensions of the PAD, perhaps into perpituity, are questions worth raising and answering by the City Council in public session.

Posted by Annette
a resident of College Terrace
on Mar 21, 2023 at 12:55 pm

Annette is a registered user.

Evergreen Park Observer used this phrase: "that are more clearly worded as to the intended use." and Online Name referenced "another costly mistake." City Hall should take note of both those comments and give some thought to factoring in more quality control over its own work. There was the in/famous typo that ultimately led to the eviction of the residents of the Hotel President, there's whatever happened with regard to the Ellsworth zone change, and now there's this $972 issue. I can easily imagine that there's more. With land costing what it does here, everyone making decisions that involve land use needs to do good, clean, unassailable work.

Posted by Annette
a resident of College Terrace
on Mar 21, 2023 at 4:53 pm

Annette is a registered user.

Editor: please correct my post above so that it reads $972k rather than $972. Big difference! Thank you.

Posted by Resident
a resident of Duveneck/St. Francis
on Mar 21, 2023 at 8:59 pm

Resident is a registered user.

The previous City Council knew the potential consequences. Likely then then City Manager, City Attorney and staff did as well. Was no one's assigned responsibility to track, manage and use this fee? I'm outraged at yet another CPA fiasco, especially as a creek nears overflowing and an observant PAWeekly reporter questions the effectiveness of the leadership.

Posted by Palo Alto native
a resident of Old Palo Alto
on Mar 22, 2023 at 12:09 am

Palo Alto native is a registered user.

In lieu fees should never be granted !! No exceptions to zoning codes. The City has been playing withe this “ Monopoly money “ for years and it has always struck me as a resident a bit fishy. Especially now that we the residents will be paying this money back to the developer. I do not blame Chop Keenan, he didn’t have to provide parking which would have cost a pretty sum at the time. A lot of these land swap deals and HUGE assessed fees all seem related to developers making hefty profits on their buildings with providing poor public benefit and now with this one— no parking. PC .zones also were used by developers to make their profit with NO benefit to citizens…….a few iron artistic benches! Come on, City needs to assess legitimate building fees, not money going into a slush fund for the whims of whoever happens to sit on City Council or the City Manager.

Posted by Amie
a resident of Downtown North
on Mar 22, 2023 at 8:33 am

Amie is a registered user.

You can charge these controversial in-lieu fees anymore, thank goodness. AB 2097 bars local governments from mandating parking spaces as part of housing, retail, and other commercial developments near transit stops. None of this matters anymore. It should have been mentioned in the article.

Posted by South PA resident
a resident of South of Midtown
on Mar 23, 2023 at 9:38 am

South PA resident is a registered user.

More negligence and amateurish errors by our PA council and city manager it seems. Forfeiting $1M to improve our quality of life because they forgot to spend it? Just wow.

Posted by Palo Alto Supporter
a resident of University South
on Mar 23, 2023 at 10:46 am

Palo Alto Supporter is a registered user.

Assessing In Lieu fees for projects that can not provide them on their property is a good thing. We have historic buildings and buildings where access is not even allowed (a new driveway on University) that make adding parking literally impossible. It is also far less environmentally impactful and more socially beneficial for the City to aggregate these fees and invest in an efficient public parking structure. To mandate very expensive subterranean garages on each parcel versus the alternative flies in the face of what Palo Alto stands for. We need more parking, all the studies have proven it. Businesses have said it. Shoppers and visitors have said it as well. Just because we are in a moment in time when the demand is down doesn't mean we should ignore is the time to be proactive. Too bad the City took so long to never do the right and legal thing.

In Mr. Keenan's case, I recall the City having spent more than $1,000,000 to design a garage for the public lot across from the post office to actually invest the parking in lieu fees as they were required. After all the studies and consultants and years of work culminated in a Public Works request to move to construction, the Council denied it. If the City decides it doesn't need the parking it collected fees to build, then, as the Court has concluded, the must give it back.

The Council should direct staff to determine who else should get their fees back and proactively send it back. Same with the illegal fees that were paid by all utility users. Give it all back to those that paid it (residents and businesses). Why the Palo Alto council blames others and thinks they get to decide what to do with all this money is insane. They enforced the Utility Transfers even after being told they should stop and only after a long expensive court battle are they saying they will finally return the money - someday.

Anyone else see what they keep doing?

Posted by woodChuck
a resident of Midtown
on Mar 23, 2023 at 10:50 am

woodChuck is a registered user.

Don't mess with Chop...ask HMB!

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