The Modesto City Council on Tuesday night approved providing free employee parking for five years to entice Valley First Credit Union to relocate its corporate headquarters downtown.
The proposal the council approved on a 7-0 vote calls for waiving parking fees of as much as $89,000 per year or $445,000 over the five years. The waiver is for as many as 100 employees. Valley First would pay for parking starting in the sixth year.
City officials said waiving or reducing parking fees is one tool they have in their efforts to revitalize downtown by drawing more businesses and people to the city center. They say the economic impact of having as many as 100 Valley First employees eating and shopping downtown will outweigh the lost parking revenue.
They added that there is ample off-street parking for Valley First without affecting other motorists who use the city’s parking garages and lots.
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Valley First President and CEO Hank Barrett has said his company has outgrown its Orangeburg Avenue administrative office and is considering buying the three-story building at the southeast corner of 11th and J streets. The building is a downtown landmark and the former home of a JCPenney store.
The building’s current tenants include the Modesto Chamber of Commerce. Barrett – who did not attend Tuesday’s council meeting – has said if Valley First buys the three-story building, the tenants would remain on the first floor and it would occupy the upper floors.
Stanislaus Economic Development and Workforce Alliance President and CEO David White told council members that Barrett was considering moving Valley First’s corporate headquarters out of Modesto and along Highway 99 before he talked with Barrett about the benefits of being downtown.
“Quite frankly,” White said, “they were looking outside of Modesto. ... Could you imagine losing a headquarters like that?”
Barrett has said moving downtown does not make sense without a concession on parking. The building Valley First is considering does not have parking. The city charges $74 per month for a parking spot in one of its downtown parking garages and parking lots.
Barrett said his corporate headquarters has about 65 employees and expects to expand to 100 employees in a few years. Without the waiver, Valley First would pay $57,720 per year for 65 employees and $88,800 for 100 employees.
City officials say what they are offering Valley First is a pilot program. The program comes as the city and the Downtown Modesto Partnership finish a parking management plan, which could come before the council in several months.
The city now charges for its least desirable parking – its parking garages and lots – while not charging for prime street parking, which often is used by employees of downtown businesses to the detriment of people coming downtown to eat or shop, according to a parking consultant hired by the partnership.
The parking management plan is expected to recommend that the council reduce or eliminate the charges for the parking garages and lots while charging for prime street parking.