Ok – In lieu fees allows business owners to “get around” parking requirements. For instance, if you want to put in a restaurant and the parking requirements is for 30 spaces and you only have 15, you can pay the city so much per space and they will allow you to put in your restaurant. It’s sort of like a parking indulgence. Pay, and your sins sort of go away.
I think the original idea was that the money generated would allow the city to provide some parking relief to the merchants in the area. However, over the years it became simply a tax on a business with the money going quickly to the general fund.
In Scottsdale, AZ, they are considering removing this requirement but there are some fears that if they need to start it up in the future, a recent state law would require that if there was any reduction in property value due to the reinstitution of the in lieu fees, the city would be liable.
Although I agree with the law that if the city does something to lower my property value, then they should compensate me however to use that as an excuse to keep a fee in place is ludicrous. If the city puts a fee in place and that lowers my property value they should compensate me. Keeping a fee so that they wouldn’t possibility be caught in this catch 22 is typical bureau crap. The fellow quoted in the article is correct – they are just ways to garner money for the city coffers.