CITY HALL — Auto dealerships, hospitals and small businesses in the MidCity area rejoice — your off-site parking at the Yahoo! Center is safe.

In a 5-2 vote Tuesday, the City Council legitimized Equity Office Properties’ questionable practice of leasing over 1,000 parking spaces to non-tenant businesses, something that had been going on for over a decade illegally under terms of their development agreement.

In return, the company agreed to apply a traffic demand management program (TDM) across the board to help reduce the impact of workers coming to and from their job sites. TDMs include carpooling and increased use of public transit.

Right now, City Hall only requires TDMs for large employers, and the only way to win this benefit is through the development agreement process.

“The amendment and TDM plan would apply to the entire facility, to larger and smaller employers,” said City Planner Roxanne Tanemori. “The city would be getting more compliance than currently.”

It was an unpopular move with residents who believe the parking is a community benefit that should not be used to pad the center’s profit margin, but councilmembers for the amendment said that the center was providing plenty of perks, and that the amendment was right in line with City Hall land use policy.

“The benefit of shared parking is so apparent to me, and I think to the community, which is why we built it so deeply into the LUCE,” said Councilmember Terry O’Day. “It reduces trips, on-street parking, land dedicated to cars, helps pedestrian orientation, helps retailers and autodealers. It’s the apparent value of the shared parking, even if there isn’t a dollar value attached to it in this report.”

It was that lack of a dollar value that held up council members Kevin McKeown and Bobby Shriver, who demanded to see the financial analysis of how much a TDM would cost the center’s owner versus how much the company makes off of parking.

That information was requested by the Planning Commission at its May 19 meeting. The commission recommended that the council deny the application without that analysis.

McKeown agreed, saying that it was necessary to make an informed business decision on the part of the public.

“I’d like to put this off until that information is provided to us,” McKeown said. “All of us believe in shared parking, and we all want to make it happen. We need to make it happen fairly for those that live in Santa Monica, and make it happen fairly for the applicant.”

Mayor Pro Tem Gleam Davis noted that City Hall would be hard-pressed to criticize the company without taking a hard look at itself.

“It appears to me that the city was complicit in that, because we’ve been taking revenue from that for all these years,” Davis said. “It’s hard to point the finger at the developer when we’ve been benefiting from this violation.”

In fact, the center has paid approximately $1.82 million in parking taxes between 2008 and the first quarter of 2011, according to a letter by the center’s attorney, Dale Goldsmith.

The leasing, formally discovered during a check of the Yahoo! Center’s development agreement, was deemed “out of compliance” with the conditions of the 1981 agreement by the City Attorney’s Office.

While lawyers for the company argue that the agreement does not prohibit the leases, in the words of Deputy City Attorney Barry Rosenbaum: “A better reading is that the practice of leasing to off-site tenants is currently not allowed.”

In response, the center came to City Hall with an amendment to its agreement, the fifth in the 30 years that the agreement has been in effect, which divested it of the responsibility to provide free parking to the businesses that lease space in the office park, and gives the owners the right to lease out spaces to other businesses.

Goldsmith told councilmembers that the use of the large number of spaces in the half-empty business center was in line with the “shared parking” principle in City Hall’s recently-adopted Land Use and Circulation Element, or LUCE.

The concept encourages people and businesses to find ways to use existing parking more efficiently rather than build new parking, which city officials say promotes car use and wastes money, energy and increases traffic.

“Letting these spaces lie fallow would squander these resources and require a commitment to spend more non-renewable resources,” Goldsmith said.

While city planners do promote the concept of shared parking, which they say increases walkability, decreases traffic and promotes economic vitality, the owners of the Yahoo! Center have not always been as gung-ho about the concept as Goldsmith’s comments suggest.

“They were indifferent at best about going through the DA process and having the ability to have shared parking,” said outgoing Planning Director Eileen Fogarty. “We encouraged them strongly because they have all these excess spaces. That was the city’s broader view on this application.”

The 1 million square foot center does have a lot of extra space, according to a staff report.

Its subterranean garage provides 4,063 parking spaces, nearly a quarter of which it leases out to off-site parties, including Saint John’s Health Center and local car dealerships.

A study conducted Dec. 1 and 2, 2010 showed that even at 11 a.m., there were surpluses of nearly 800 parking spaces.

Disgruntled citizens noted that those dates fall on Hanukkah, which might have detracted from the number of parkers present.

The center used that study to push a major reduction in the number of parking spaces it was required to provide to its tenants, also gunning for the ability to charge all of its tenants for the right to park.

Although the principle of the decision lines up with City Council policy, the evisceration of the development agreement process, which forms the basis of LUCE implementation, causes problems, McKeown wrote in an e-mail after the meeting.

“I regret that the council went forward after the applicant declined to provide information requested by the Planning Commission, council members, staff and the public,” he wrote. “The precedent is worrisome, and calls for a rethinking of how we intend to handle the dozen or more new development agreements upcoming.”

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