City Council Split, but Eventually Moves Forward with State Street Parklet Rates

After Three Rounds of Voting, Santa Barbara City Council Decides on Tiered Payment System

Credit: Erick Madrid (file)

After three rounds of voting and nearly two hours of discussion over the proposed State Street parklet payment program, the Santa Barbara City Council eventually decided 4-2 to move forward with a tiered-rate system that would start May 2023.

During the pandemic, State Street was closed to vehicle traffic, and the parklets popped up as a temporary way to ensure safe social distancing. Since then, though, cities across the state have embraced longer-term parklet plans by drafting interim or permanent ordinances to regulate the outdoor spaces and offset the maintenance costs that fall on cities’ public works departments.

In the special council meeting — which was originally scheduled for January 10, canceled due to this week’s storm, and then quickly rescheduled for Thursday, January 12 — Santa Barbara Downtown Team Manager Brian Bosse outlined two options for a monthly pay rate system that would offset the expenses the city has been subsidizing to maintain the parklets.

Downtown Parking, which is in charge of maintaining the parklets, estimated the costs for fiscal year 2023 at $515,000, and Bosse said the number is expected to be anywhere from $650,000 to $675,000 for 2024. City staff explained the reason for the increase into fiscal year 2024 would be to pay for the cost of code enforcement, which would begin in January 2024. In comparison, the city’s cost of maintenance for sidewalks and landscaping throughout the entire downtown area, which is also run through Downtown Parking, is at about $410,000 per year

The city considered setting the rate based on the tax returns, location, or type of business, but ultimately staff settled on two options that both charge by square foot, with the rates gradually increasing for space that goes beyond immediate storefronts. According to city staff, there are over 14,000 square feet of parklet space downtown, about 9,500 of which is directly in the business frontages, with 4,500 square feet that extends beyond that space.

The first option would have a flat monthly charge of $5 per square foot for space directly in front of the business and a gradually increasing rate for additional space beyond the frontage. If a business parklet were to stretch 100-200 percent beyond its frontage, the cost would be $7.50 per square foot, and $10 per square foot if the parklet stretched more than 200 percent beyond.

Under the first option, the city could expect as much as $731,000 per year, even assuming that the payment plan would force at least 25 percent attrition from businesses either downsizing or closing their outdoor space. If the base rate were a dollar lower — starting at $4 per square foot — the program would net $585,000, falling short of the expected costs by at least $65,000.

The second option, which eventually was selected by the council in a 4-2 vote, is also a monthly charge per square foot, but with a “variable” structure, Bosse said, that would incentivize portability and updated designs by determining the rate “based on facility design and needs.”

“What this does,” Bosse explained, “is it allows businesses to determine the rate they’re going to pay based on what they’re going to put outside, or based on what they already have outside.”

With this plan, businesses with larger parklets that are built on a platform, have a covered roof, and are not portable will pay the “standard rate” of $5 per square foot with the same gradual rate increases for areas beyond the business frontage. Currently the city has only two such parklets: Arigato Sushi and Opal Restaurant & Bar.

Only these businesses would pay the higher rate, and since the City Council voted in September 2022 to prohibit any new non-portable structures with covered roofs, it would allow those with the bigger parklets to keep their existing structures as long as they pay a higher rate than the others.

Parklets built on a non-portable platform without roofs would qualify for the middle-tier rate starting at $4.50, and spaces with a movable platform and no roof would pay a starting rate of $4. The smallest, fully portable “on grade” spaces (no roof, no platform) would pay the lowest rate, starting at $3 per square foot and increasing to $4.50 and $6 for space outside of the business frontage.

Based on current square footage, and factoring in the projected 25 percent attrition, the second option with four tiered rates would break even with the projected costs of parklet maintenance.

Until now, the maintenance costs were subsidized by the city using American Rescue Plan Act Funds, but City Administrator Rebecca Bjork explained that those funds would soon run out, and the city would need to fully fund the parklet maintenance through the payments or else it would have to find other ways, like raising the downtown parking prices even further.

Santa Barbara’s proposed rate of $5 per square foot would be higher than other cities with similarly closed main streets — like Ventura ($0.90 per square foot), Laguna Beach ($1.41 per square foot), and Santa Monica ($2.66 per square feet) — but staff said anything lower would fail to offset the costs.

Mayor Randy Rowse was adamant about not moving forward with a payment plan that was anything less than full cost recovery, saying that it would be “memorializing a structural deficit” in the city budget. “Anything short of full cost recovery is irresponsible on our part,” Rowse said. “I’m sorry, it just is.”

Councilmember Mike Jordan agreed that the council should “shoot for full cost recovery,” and answered concerns about the $5 cost by saying the rates “weren’t made up,” but decided by the actual cost that the city had been subsidizing.

The council eventually came to a vote on whether to move forward with the tiered rate program, but in the first vote the council was split 3-3, with Mayor Rowse and councilmembers Meagan Harmon and Oscar Gutierrez voting against the motion.

Councilmember Gutierrez then proposed a second motion, asking for a vote on whether the council should continue the item to a regularly scheduled council meeting, since many members of the public were unable to attend or offer public comment on such short notice after the storm, and since Councilmember Kristin Sneddon was also unable to attend.

“I just feel like this is such an important topic to the future and vitality of State Street that we should be able to have any stakeholders present and commenting on what they feel we should take into consideration,” Gutierrez said.

Again, the council was split 3-3, with councilmembers Jordan, Alejandra Gutierrez, and Eric Friedman voting against the continuance.

With the group now locked in a stalemate and unable to agree on a motion to continue the item, Councilmember Friedman urged the council to take another crack at the originally suggested motion to implement the tiered payment system with a start date of May 2023.

“There are impacts and tradeoffs that take place no matter what we end up adopting,” Friedman said, “but we need to adopt something.”

On the third vote, the motion passed 4-2 with councilmembers Harmon and Oscar Gutierrez opposed. Officially, the council directed staff to return with a resolution to implement the tiered payment system starting this May. The payment plan would be in place until this December, at which point the city would have a chance to implement an interim ordinance for two to five years into the future.

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