City Council Amends DA for Yahoo! Center Parking

By Gene Williams
Lookout Staff

June 16, 2011 -- The City Council decided Tuesday to let Yahoo! Center owners continue leasing their surplus parking spaces to off-site businesses, but some councilmembers wanted more information before striking the deal.

The council’s five-to-two vote – which amended a 1981 development agreement (DA) governing the one-million square foot business park on Colorado Avenue – requires Equity Office Properties (EOP) to institute a campus-wide Trip Demand Management (TDM) program in exchange for continuing the controversial leasing policy.

EOP presently leases some 1,000 excess parking spaces to neighboring businesses, including St. John’s Health Center and local auto dealers.

Some residents – including more than a dozen who spoke during public comment Tuesday – said the amendment rewards EOP for years of DA violations.

Letting EOP off the hook too easily will encourage others to wiggle out of their agreements with the City, the residents said.

The amendment was supported by City staff, which negotiated the terms with the business park’s owners.

In her presentation to council, Planning Director Eileen Fogarty acknowledged that the parking leases have raised “a great deal of concern in the community,” but defended her staff’s recommendation to allow the practice to continue.

The Yahoo! Center amendment is “important from the City’s perspective because the City desires shared parking,” Fogarty said, adding that shared parking at the Yahoo! Center is essential with major development coming to the Bergamot Station area in the years ahead.

TDM and parking programs are the City’s tools for managing congestion under Santa Monica’s 2010 Land Use and Circulation Element (LUCE) update, Fogarty said.

“If [TDM] goals are not met in the first year or two, more aggressive measures can be put in place,” she said.

But two councilmembers sided with the Planning Commission, which three weeks earlier said the City should hold off on making a deal until EOP came up with more information and numbers ("Planning Commission Wants Stricter Rules for Yahoo! Center Parking," May 23).

In a motion which later failed, councilmembers Kevin McKeown and Bobby Shriver wanted to postpone the vote until EOP showed the City how much parking money it was making from off-site businesses.

Without those figures, it is impossible to know whether the public benefits the City expects to get from the deal are commensurate with the benefits being given to the property owner, McKeown and Shriver said.

“What’s lacking here is the applicant has quite deliberately declined to provide the requested financial information,” McKeown said.

“I don’t feel we should ever enter into a development agreement without the financial information upon which a good decision can be based,” McKeown said.

However, EOP representatives say figuring out what that amount is may be more difficult than it seems.

Dale Goldsmith, an attorney for EOP, explained the problem.

EOP contracts out Yahoo! Center’s parking management to Standard Parking, which does not differentiate between tenants and non-tenants when reporting revenue, Goldsmith said.

In addition, the number of parking leases and rates fluctuate quite a bit from tenant to tenant and month to month, making it difficult to go back and reconstruct how much money came from which sources, Goldsmith said.

But EOP would have no problem telling the City how much total parking revenue Yahoo! Center generates, he said.

Not everyone was buying Goldsmith’s explanation.

During public comment that followed, Tricia Crane, a resident and frequent speaker at City meetings, said EOP needs to be more forthcoming with its financial information.

“Yahoo has created a money-making operation that it apparently hopes to continue,” Crane said, “only now they want City approval for their profit center.

“The Yahoo parking spaces are a profit center,” Crane said. “They are refusing to disclose this information for a reason.”

Crane blasted the staff report – which she said ran contrary to the Planning Commission’s call for financial disclosure – and expressed alarm at how the “hired guns of developers have framed tonight’s discussion.”

But a majority of councilmembers disagreed.

Noting that Yahoo! Center’s DA does not clearly define whether the parking leases are indeed a violation – a point of contention between City and EOP attorneys – Councilmember Gleam Davis said that both parties have nonetheless benefited from the arrangement.

“Should we cut off our nose to spite our face and make bad land-use decisions in order to punish people who we think may be gaming the system?” Davis said.

“It’s not clear to me that they were gaming the system,” she said, “and if they were, we were profiting from it.”

Under the DA, Yahoo! Center provides community benefits, including a park, community room and child care center, which are run well and maintained in good order, said Davis.

In addition, the City has been collecting and spending tax revenue from the parking leases for a decade, she said.

“If we are going to extract community benefits from people, we need to give them the opportunity to pay for them,” Davis said.

Councilmembers Terry O’Day, Bob Holbrook, Pam O’Connor, Mayor Richard Bloom and Davis voted in favor of the amendment.

Councilmembers McKeown and Shriver voted against it.

McKeown expressed his support of shared parking, but reiterated his opposition to amending the DA without more financial analysis.

The amendment decreases the number of parking spaces that must be set aside for Yahoo! Center tenants by raising the ratio of office area per parking space from 322 square feet to 500 square feet.

The TDM program will start with an Average Vehicle Ridership (AVR) target of 1.5 people per car entering and leaving the site. The AVR will be raised when the Expo light Rail comes to Santa Monica in 2015.

EOP will be responsible for applying, monitoring and reporting the TDM program.

EOP attorney Goldsmith said that Yahoo! Center’s total parking operations have netted the City $1.8 million in parking taxes during the past three years.

Goldsmith estimates that off-site businesses that lease parking at Yahoo! Center pay between $60 and $100 per space per month.
The council’s action came one day before the Planning Commission was set to hear a DA amendment for St. John’s Hospital, which seeks to avoid building a 440 parking garage.

Resident’s who oppose St. John’s also opposed the Yahoo! Center amendment, which they see as a stepping stone for the hospital to walk away from its agreement to build parking.