By Elizabeth Dinanedinan@seacoastonline.com
February 07, 2010 2:00 AM
When Joulian Deiri went to the Portsmouth Planning Department in December with plans to open a seafood restaurant downtown, he was told he'd have to pay a one-time fee of $26,000 because the proposed restaurant had no affiliated parking spaces.
A month later he went back to the planning office, was told he "might want to have a seat" and was informed the parking fee had spiked to $130,000 as a result of a revised zoning ordinance that went into effect in January. Deiri said he was also told the $130,000 was due in cash or by certified check before any planning permit would be issued.
"I said, 'Thank you very much. I don't have to show you my plan anymore,'"‰" he said. "Asking for this kind of cash is insane."
A Kittery Point, Maine, resident, Deiri said the Portsmouth restaurant would bring 20 jobs to the city. He said he's operated restaurants for 20 years in Boston, Worcester, Framingham and Brookline, Mass., and has never heard of an "in lieu" parking fee.
In Portsmouth, the fee is only levied against restaurants in the Central Business District without associated parking spaces. The fee is calculated using a formula that requires payment for one parking space per 100 square feet of restaurant space. Effective Jan. 1, the cost of one space increased from $1,300 to $5,000.
According to the city, the fee is half of what it costs to own and operate a downtown parking spot. Restaurants operating before Jan. 1 are grandfathered.
When Deiri heard about the $130,000 fee, he was negotiating the purchase of a condo at 121 Congress St. owned by local lawyer Robert Shaines. The condo is the location of Shaines' brother Stuart's former menswear store. When Shaines heard the potential buyer was scared off by the increased parking fee, he was moved to write to the City Council.
"This seems to be one unreasonable and unconscionable tax imposed upon this property because it is contemplated to be used as a restaurant," he wrote. "This tax is discriminatory because it seeks to place a tax on this type of business and not on other forms of business."
Shaines described the parking fee as "a tax which discriminates against restaurants coming into the Central Business District." He said the condo is taxed at a value of $834,000 and the sale to Deiri was at "arm's length" for $600,000.
"And the city says it's entitled to $130,000? I tell you this is outrageous," he said. "If it's tattoo parlors, trinket shops, karate studios and such that the city wants in the downtown, this is a great way to achieve that goal."
Mayor Tom Ferrini and City Manager John Bohenko both declined to comment on the increased parking fee and both referred questions to City Planning Director Rick Taintor, who said the fee was increased after a review of parking demand showed peak crowds between 6 and 8 p.m. when people are dining out.
"There was a lot of concern that the restaurants were causing part of the congestion," he said.
The goal of the "in lieu" parking fee is to provide parking, said Taintor. Money raised from the fees will go toward building a new parking garage, he said, adding that construction for a parking garage costs $30,000 a space.
Shaines said "every other place of business" impacts parking. "We are not at liberty to single out a certain type of business and tax it out of business before it starts," he said.
City Councilor Ken Smith, who is also a downtown business owner and member of the Greater Portsmouth Chamber of Commerce, said he learned about the fee increase a year ago and has opposed it since.
"We, the council, were told to pass it (the new zoning ordinance) now and we can fine tune it later," he said. "We were losing business with the old rate."
Smith said he heard of a proposed pizza restaurant that was going to have bicycle delivery, but the plan dissolved because of the parking fee. He also claims personal knowledge that the former Caffe Kilim storefront has remained vacant for more than a year for the same reason.
"Not only will we kill the golden goose, we're going to strangle it, cook it and eat it," he said.
Also a member of the city's Parking Committee, Smith said the Planning Department never consulted with parking officials while crafting the increased fee. He said if they had, "I would've asked for it to remain the way it was."
Shaines said he plans to appear before the Planning Board Feb. 16 to ask for a variance "from this unreasonable and illegal tax."