New OC Committee Explores Fee-In-Lieu Parking Concept

New OC Committee Explores Fee-In-Lieu Parking Concept
Mayor Rick Meehan addresses members of a new Fee-In-Lieu-Of-Parking Committee last week. Photo by Bethany Hooper

OCEAN CITY – While agreeing that a fee-in-lieu parking concept is worth exploring, members of a new resort committee say more information on financing and public-private partnerships is needed.

Last Thursday, members of a new resort committee kicked off discussions on a fee-in-lieu-of-parking (FILOP) concept in Ocean City. Presented by the Ocean City Development Corporation (OCDC), Board President Joe Wilson said a FILOP program would consolidate parking, encourage economic development and walkability, and address parking problems, particularly in the downtown area.

“There seems to be a trend downtown where developers are able to build or redevelop an economically feasible site but they may not be able to meet their parking requirement, which results in roadblocks for positive redevelopment in town …,” he said. “We thought a FILOP program in place would provide a really good solution and would help streamline the development process.”

Simply put, a FILOP program would allow developers an alternative for meeting the town’s minimum parking requirements. The concept allows property owners to pay a fee to the town instead of providing some or all of the necessary off-street parking required by code. The town then uses those fees to pay for public parking.

Wilson told committee members last week a recent study conducted by Walker Consultants proposed several options for implementing and managing a FILOP program. He said the concept would not only encourage redevelopment downtown but would address nonconformities.

“The town is consistently put in a position where it is forced to give consideration to parking concessions, allowing properties to carry forward large parking nonconformities,” he said. “Fee in lieu of parking would help reduce parking stress the town is adding on a continual bases by providing for centralized parking in certain areas of town.”

Proposed locations for introducing a FILOP program include the 100th Street parking lot, the Roland E. Powell Convention Center, the 4th Street parking lot and the Worcester Street parking lot. Wilson noted cost estimates for FILOP parking structures were also included in the Walker Consultants study. Estimates for an above-grade parking structure totaled $50,300 in upfront costs per space and $890 in annual costs per space, while estimates for an above-grade parking structure with a rooftop amenity level totaled $58,800 in upfront costs per space and $920 in annual costs per space. Estimates for surface parking totaled $67,500 in upfront costs per space and $150 in annual costs per space.

“The thing to emphasize here, more than anything else, is we are not married to these costs of what we are going to charge a developer,” he said. “That’s something to be hammered out in this room.”

Wilson noted, however, that OCDC was a proponent of a downtown parking garage, either at Worcester Street or 4th Street.

“Basically what we are trying to do here is create a template that we can use for the rest of the town,” he said.

For his part, local developer Palmer Gillis said he believed the town should spearhead efforts to implement a FILOP program.

“Number one, the town is exempt from real estate taxes so that lowers operating costs. And the town can finance it a lot better, longer term …,” he said. “The town has a lot of unique advantages. That means they can either manage a parking garage or they can subcontract it to somebody. But the town, in my thought process, needs to be the entity that does it.”

City Manager Terry McGean, however, said that would require more research.

“The concern is at what point do we lose tax-exempt status through financing a parking garage …,” he said, adding that a certain percentage of parking spaces would also need to be open to the public. “I don’t think we can build a parking garage at Worcester Street and set aside all the spaces for developers. Somehow, there’s going to have to be some sort of combination … When it’s open, it’s got to be open to everybody.”

Palmer also questioned if the city could provide financing for upfront space costs. OCDC board member Igor Conev said it was worth considering.

“There is a lot of upfront cost with any development, so if you can spread that out over a few years would be a lot easier than paying it all upfront,” he said. “That may be a good idea.”

Ocean City Councilman Peter Buas questioned if a parking garage should be constructed first, or if fees should be collected first. Shenanigan’s owner Greg Shockley said the town should first build a garage.

“They want to see where they will be able to park …,” he said. “I think the city will have to say, ‘we’ll build it’ and hopefully they come.”

Mayor Rick Meehan disagreed. He said he first wanted to see some commitment or interest from developers before moving forward with a FILOP program.

“We need to find out if that’s viable before we just surge ahead,” he said.

McGean said he also had concerns about building a parking structure first.

“It would be good to have a partner, an anchor when we build it,” he said, “somebody committing to 50, 100 spaces.”

Hotelier G. Hale Harrison said public-private partnerships should be explored. He said similar partnerships could be found in other resort communities, including Virginia Beach.

“I’d start by looking at their model and see if that model is adaptable for us,” he said.

When asked if the town’s streets could handle traffic associated with a parking garage, Wilson said it could improve traffic in the downtown area.

“I feel like we already bottleneck everyone down there in that [Inlet] parking lot …,” he said. “If we go with the 4th Street property, in my opinion it will probably reduce the problem.”

McGean agreed.

“When you go to Disney World, you don’t drive through Cinderella’s castle to park,” he said. “When you come to Ocean City, you drive through Cinderella’s castle, you literally park in Disney World. The bottleneck is the Route 50 bridge … If we’re going to add another 400 or 500 parking spaces downtown, the place to go, in my opinion is north of the Route 50 bridge.”

Some committee members last week shared their concerns about constructing a parking garage and its potential lack of use in the offseason. However, The Hobbit Restaurant owner and Ocean City Hotel-Motel-Restaurant Association representative Garvey Heiderman disagree.

“I will tell you point blank we are not a four-month community anymore …,” he said. “Those days are over, and we need to be forward-thinking.”

About The Author: Bethany Hooper

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Bethany Hooper has been with The Dispatch since 2016. She currently covers various general stories. Hooper graduated from Stephen Decatur High School in 2012 and the University of Maryland in 2016, where she completed double majors in journalism and economics.