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SPECIAL MEETING
CITY COUNCIL
OF THE
CITY OF SOUTH SAN FRANCISCO
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
Meeting to be held at:
MUNICIPAL SERVICES BUILDING
BETTY WEBER ROOM
33 ARROYO DRIVE
WEDNESDAY, APRIL 18, 2007
6:00 P.M.
NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the
State of Cali fomi a, the City Council of the City of South San Francisco will hold a Special Meeting
, on Wednesday, the 18th day of April, 2007, at 6:00 p.m., in the Municipal Services Building, Betty
Weber Room, 33 Arroyo Drive, South San Francisco, California.
Purpose of the meeting:
1. Call to Order
2. Roll Call
3. Public Comments - comments are limited to items on the Special Meeting
Agenda
4. Study Session: Discussion related to regulating park and fly operations at
hotels
5.
Adjournment
(J~
ty City Clerk
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AGENDA ITEM # 4
DATE: April 18, 2007
TO: Honorable Mayor and City Council
FROM: Steven T. Mattas, City Attorney
By: Cynthia Wang, Assistant City Attorney
SUBJECT: Park and Fly Enforcement Options.
SUMMARY AND PURPOSE OF WORK SESSION
Some hotels in the City, primarily those located in the East of 101 Area, offer long-ternl parking
when guests stay at least one night at the hotel. This practice, which is often referred to as "Park and
Fly", has a negative effect on parking availability at the hotels, 011 the availability of parking at large
events at the Conference Center, and also on commercial parking facilities in the City.
In some instances, the land use entitlement (generally a conditional use permit) obtained by the hotel
does not expressly authorize or prohibit Park and Fly operations. Generally, and in particular for
hotels approved and built after 1995, the conditional use permit contains a condition of approval that
expressly precludes Park and Fly operations, with only a few exceptions (e.g.., Wingate Inn.).
In addition, while the City does receive transit occupancy tax based on the single night of hotel
occupancy, the City does not receive any commercial parking tax revenue as it does from
commercial parking facilities. The purpose of this work session is for the City Council to consider
the various policy, legislative and enforcement options related to Park and Fly operations at South
San Francisco hotels and to provide direction to staff. Staff recommends Option 3.
BACKGROUND/DISCUSSION:
1. Land Use Requirements:
Some hotels in the City, primarily those located in the East of 101 Area, offer long-term parking
when guests stay at least one night at the hotel. In some instances, the conditional use permit
applicable to the hotel does not expressly authorize or prohibit Park and Fly operations. In other
instances, particularly in the case of hotels approved and built after 1995, the conditional use
permit generally contains a condition of approval that expressly prohibits park and fly operations,
with only a few exceptions.
Section 20.74.060 requires airport-oriented hotels and motels to provide the following off-street
parking:
One space/or each room, however, for facilities containing one hundred rooms or
more, a use permit may be approved to allow an off-street parking ratio of not less
than: one space for each three units, one-half space for each twenty rooms for
employee parking, one space for every fifty square feet of meeting rooms and one
space for each two hundred square feet of lobby and office area. (emphasis added.)
Section 20.76.060(i)(1)(A) provides the Planning Commission authority to approve a lower
parking-space-to-room ratio. Specifically, "[a] lower than one space per unit ratio may be
approved if the applicant provides substantial justification." S 20.74.060(i). Substantial
justification of a lower than 1: 1 parking ratio shall take into account the following factors and
conditions and any others deemed applicable by the Planning Commission:
(A) Distance the hotel or motel is located from the airport (airport-oriented hotels or
motels are usually located no further than three miles from the San Francisco
International Airport);
(B) Availability of airport bus and/or limousine service.
(C) Proximity of auto rental agencies to the site. Additional parking may be required for
rental facilities on the site.
(D) Availability of parking facilities adjoining the site which have peak use hours
different from peak hours of the hotel or motel.
(E) Documentation of actual use of parking spaces at an existing and comparable facility
for an extended period of time.
(F) Availability of on-site meeting rooms and conference facilities.
(G) Designation of additional parking spaces to allow for extended parking for
guests using the airport.
(emphasis added.) (~ 20.74.060(i)(A)-(G))
In the past, the City has permitted at least two hotels with enough parking spaces to support long-
term, airport-related uses. For example, in June of2000, the Planning Commission approved a
modification of Use Permit 91-888 for Travelodge Inn to use 93 parking spaces in their satellite
lot for long-term airport parking. The original Use Permit 91-888 allowed the use of that parking
area only by the Conference Center, Ramada and Holiday Inn. Travelodge also entered into an
agreement with the Conference Center Authority to use the lot for Park and Fly only on non-
event days (days that the Conference Center on-site parking is adequate to support a specific
meeting function or is not being utilized). The Planning Commission approved the use of part of
Travelodge's satellite parking lot for long-term parking subject to the Use Permit (SSFMC ~
20.24.030(c) and 20.24.070 (a),(b).)
The Planning Commission also approved a space-to-room ratio lower than 1: 1 for the Best
Western Grosvenor Airport Hotel ("Grosvenor") (UP 01-008). The Grosvenor was granted a
variance to reduce parking as part of the original Grosvenor approval, with a new parking ratio of
1:3 (parking-space-to-room.).
Staff have found one anomaly to the City's standard post-1995 conditions of approval for hotels
precluding Park and Fly: Wingate Inn, whose conditions of approvals neither authorized or
prohibited the practice by not speaking to the issue..
2. Commercial Parking Tax
Under South San Francisco Municipal Code ("SSFMC") Section 6.16.047, a hotel is liable for a
license tax for operation of commercial parking facilities. Subdivision (b) of SSFMC Section
6.16.047 requires operators of commercial parking facilities to pay a license tax equal to eight
percent of gross receipts of all parking facilities operated within City limits.
Current Practice
Historically, the City has enforced long-term airport parking regulations only sporadically. The
City has pursued enforcement on a case-by-case basis, and enforcement has been intermittently
scaled-back and discontinued. For example, during the post-September 11th economic downturn
in the hotel and travel industry, Park and Fly was one of the primary means for the City's hotel
industry to subsist, and the City relaxed its enforcement program in order to allow for an
economic recovery within the industry.
In addition, the City's former Finance Auditor has previously recommended to hotels that they
include Park and Fly revenue with the regular room revenue, and pay Transient Occupancy Tax
("TOT") to the City on the total amount. This was at a time when TOT and parking tax rates
were both set at 8 percent. Since then, the TOT has increased to 9%. (SSFMC Section 4.20.030.)
This approach assumes that the hotel operators actually charge higher room rental rates at a rate
commensurate with the rate charged by commercial parking operators, so that the price of long-
term airport parking is built into the room rate and accounted for tax purposes under the City's
collection of its TOT. .
3. Enforcement Options.
Option 1. Allow Park and Fly operations at East of 101 Hotels where such operations are
not expressly prohibited by a Condition of Approval attached to a Conditional Use Permit,
and accept Transient Occupancy Tax payments in lieu of a separate parking tax collection.
Advantages. The City is collecting 9% of total gross revenue in TOT from hotels at
higher room rates that may be tied to availability of Park and Fly services at the respective hotels,
if one assumes that the availability of Park and Fly allows the hotel to charge higher room rates.
By allowing long-term airport-related parking uses, the City may also promote business for the
hotel industry in general, which also results in increases in TOT payments to the City.
This option may help hotels in our City remain competitive in the marketplace against the
many hotels in the Burlingame-Millbrae-San Bruno market that offer long-term airport parking
privileges. For example, Travelodge's "Description of Proposal" for UP 91-888/MOD 3 states
that during the months in 2000 when Travelodge was precluded from offering extended parking
privileges to its guests, its gross revenues declined approximately 25% relative to the same
period in 1998 and 1999.
Disadvantages. Hotels have not consistently reported revenues attributable to Park and
Fly operations on their monthly reports and some hotels have not been audited in the City in the
last several years. Therefore, the accuracy of reporting and the specific revenue increase that
Park and Fly has added to the TOT are unascertainable at this time.
In addition, some of the hotels operating Park and Fly in contravention of specific
conditions or without express authority may not have adequate parking for their operations and
their obligations under reciprocal parking agreements. The City could also receive complaints
that such an approach results in selective enforcement, and that the City should either allow such
operations uniformly, or prohibit them in all instances. These types of complaints, however, are
unlikely to be successful absent evidence of invidious discrimination.
Option 2. Pro-Active and Consistent Enforcement.
The City Council may wish to consider more pro-active and consistent enforcement of its Park
and Fly regulations against all hotels in violation of Conditional Use Permit conditions. The City
is authorized, under SSFMC Section 20.98.050, to revoke both the use permit and related
business licenses for hotels that continue long-term airport parking without approval from the
City. The City could impose additional fines under code enforcement actions. For hotels that
share Conference Center Parking, Section 16.2 of the Reciprocal Parking Agreement entitles the
City to a recovery of all attorneys' fees and expenses associated with the action.
Section 6.04.180 of the SSFMC provides that failure to report the receipts of gross income from
parking is a misdemeanor, and that each day of lapsed reporting shall constitute a separate
offense. To avoid prosecution under this section, code enforcement staff could demand that
hotels account for revenues earned through operation of commercial parking facilities, and remit
the applicable license taxes to the City.
Advantages. The City could collect additional tax revenue under SSFMC Section
6.16.047 for a license tax equal to eight percent of gross receipts for the operation of commercial
parking facilities, in addition to TOTs. By compelling hotels presently offering Park and Fly to
apply for Planning Commission approval of a lower space-to-room ratio and modification of
conditional use permits, the City may better regulate traffic flow, circulation, drainage,
consistency with the General and Area Plans and site appearance through the imposition of
mitigation measures and conditions of approval, all while collecting more revenue via a parking
tax.
One potential impact of pro-active and consistent enforcement is an increased effort by
hotels to meet some of the criteria identified in the Zoning Ordinance for lower space-to-room
ratios, including provision of an airport shuttle service. (SSFMC ~ 20.74.060(i)(1)(a)-(g).)
Disadvantages. Forcing hotels to cease Park and Fly operations risks a loss of TOT
revenue to the City, as many of the hotels have insufficient parking to satisfy the requirements as
outlined in City Code. If a large number of hotels stop the practice altogether, it is likely that
consumers who seek out long-term airport parking will go to hotels in neighboring cities that do
permit, or at least quietly sanction, Park and Fly operations, and the City will lose the associated
TOT revenue to these municipalities.
This option is also complicated from a legal standpoint. The City may not collect a tax
on illegal behavior. Since 1995, the City has prohibited Park and Fly operations and
incorporated this prohibition as a standard condition of approval on hotel use permits. The City
cannot collect a parking tax from any hotel that is not legally authorized to run Park and Fly
operations. However, the Planning Commission is legally authorized to approve Park and Fly
and is more likely to approve it if code enforcement does compel hotels to provide shuttles and
meet other criteria identified in the Zoning Ordinance. (SSFMC S 20.74.060(i)(1)(a)-(g).) Such
action would legalize Park and Fly and make hotels subject to both a parking tax and the TOT.
Recommendation: Optimally, pro-active and consistent enforcement would compel hotels to
apply for approval from the Planning Commission to lower the required space-to-room ratio for
long-term airport parking purposes. The language of SSFMC provides for some flexibility (i.e.,
lower parking space to room ratios will be approved if the applicant provides "substantial
justification", taking into consideration the distance to the airport, whether the hotel offers an
airport shuttle, proximity of auto rental agencies to the hotel, and other factors listed in Section
20.74.060(i).) in approving use permits for such uses, allowing a lower than 1:1 ratio of parking
spaces to rooms. (SSFMC ~ 20.74.060(i).) If code enforcement staff is directed to pursue pro-
active and consistent enforcement, the City may thus receive both TOT and parking tax
payments.
Option 3. Case by case, long-term enforcement.
Case-by-case enforcement of Park and Fly use by hotels also remains an option. The Planning
Department would review and enforce each hotel's CUP violation individually, over a period of
one or two years. This option also may involve further consideration and flexibility from the
City Council and Planning Commission to variances and CUP approvals for hotels that fall
below the 1: 1 ratio, provided that such hotels offer airport shuttles and can provide evidence of
lower occupancy, regular occupancy by airport employees, or of any of the other factors
identified in SSFMC Section 20.74.060(i)(A)-(G).
Advantages. Hotel operators in the City are all members of the Chamber of Commerce
and other business associations. A case by case method of enforcement might face less political
resistance from such associations.
Additionally, a deliberate but slower upsurge in enforcement could have a chain reaction
and hotel operators might learn the consequences of noncompliance from one another. This
could potentially result in self-regulation and voluntary compliance with use permit application
procedures.
This might contribute to the long-term objective of increased oversight of long-term
airport parking by the City and would also result in regulated collection both TOT and parking
tax payments. A long-term enforcement strategy might mitigate both the initial revenue loss for
the City and the backlash from the hotel industry.
This option may afford hotel operators more time to implement Transportation Demand
Management for employees to free up parking space.
Disadvantages. Legal counsel representing a hotel could conceivably argue that his or
her client is being unfairly singled-out by the City on equal protection grounds if enforcement is
not consistent enough. Courts have generally recognized, however, that in the context of code
enforcement, there is an inherent a.'llount of variation in enforcement based on the limited
enforcement resources that are available.
Pro-active and consistent enforcement may compel hotel owners to apply for Planning
Commission approval of Park and Fly through the formal approvals process. Hotels may do so
by work towards meeting criteria identified in SSFMC Section 20.74.060(i)(A)-(G).
Recommendation: If the City Council chooses this option, Planning and Code Enforcement
staff could schedule a meetings with the hotel operators, inform them that they are in violation,
and that direct them to apply for a variance or a conditional use permit, as well as to begin
reporting and remitting parking tax. This recommendation is also applicable to the broadscale
enforcement option.
Option 4. Once hotels have legalized Park and Fly operations through the formal CUP
channels, the City can require those hotels to account for and remit the 80/0 commercial
parking tax in addition to TOT.
Advantages. This option will require hotel operators to account for and remit an
auditable 8% parking tax for the commercial parking service offered for each day a customer is
parked at the hotel. Hotels that obtained CUPs to offer Park and Fly services have thus far failed
to remit commercial parking taxes in addition to TOT. Hotel operators may argue that they do
not charge guests a daily fee for Park and Fly and thus should not remit commercial parking
taxes. While Park and Fly availability does factor into higher hotel room rates that result in more
TOT revenue, Park and Fly guests often stay for only one night and leave vehicles parked for up
to two weeks. The practical effect is that hotel operators remit TOT received for only the first
night, and no tax is paid for the parking by customers for the extended period. The City may now
expressly apply the parking tax and affIrmatively require hotels to obtain CUPs for Park and Fly,
and then remit a commercial parking tax separate from and in addition to the TOT for the guest's
one night stay.
Disadvantages. The vast majority of hotels in the East of 101 Area that illegally offer
Park and Fly privileges do not have CUPs. The City will need to implement a strong code
enforcement policy encouraging adherence to formal Park and Fly approval by the Planning
Commission.
This policy will likely encounter resistance from the hotel industry, particularly given
hotel representation on the Chamber of Commerce.
CONCLUSION
Staff recommends Option 3, which is a case by case, long term enforcement approach to regulating
Park and Fly operations by hotels.
By: IJ.w.,.. flb.-, cfOr-.s-k \l t... M~5
Steven T. Matias
City Attorney
Approved: ~ 'C: ~:J
Barry M. el
City Manager
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956690 JOOC
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SPECIAL MEETING
CITY COUNCIL
OF THE
CITY OF SOUTH SAN FRANCISCO
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
Meeting to be held at:
MUNICIPAL SERVICES BUILDING
BETTY WEBER ROOM
33 ARROYO DRIVE
WEDNESDAY, APRIL 18, 2007
6:00 P.M.
NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code ofthe
State of California, the City Council ofthe City of South San Francisco will hold a Special Meeting
on Wednesday, the 18th day of April, 2007, at 6:00 p.m., in the Municipal Services Building, Betty
Weber Room, 33 Arroyo Drive, South San Francisco, California.
Purpose of the meeting:
1. Call to Order
2. Roll Call
3. Public Comments - comments are limited to items on the Special Meeting
Agenda
4. Study Session: Discussion related to regulating park and fly operations at
hotels
5.
Adjournment
(J~
ty City Clerk