TUSTIN, CA—As tenants with increased parking needs—like health clubs, medical office and restaurants—pick up slack in retail centers, issues over parking emerge, experts tell GlobeSt.com. And the issues get hairier as municipalities get involved over the fight for available parking spaces within a center. In Part 1 of this two-part story, GlobeSt.com explores the growing pains retail has been experiencing with parking as it evolves. In Part II, which will appear at a later date, we explore the experts' solutions.

Matt Hammond, director of retail brokerage for Coreland Cos., tells GlobeSt.com, “We're dealing with a center in Laguna Hills where we're trying to include a restaurant and an urgent-care facility in a shopping center zoned for regular retail. Cities are amending their parking regulations to allow higher-use tenants in there because that's the trend.”

One difficulty for retail leasing managers like Coreland is that sometimes the local government bodies do not agree to issue the parking variances, even if the centers desperately need the higher-use tenants. “Clothing and gift stores are not expanding, but higher-quality quick-serve restaurants, dentists, Crossfit gyms, national massage businesses and yoga studios are,” says Hammond. “We want to put those in, but we can't. So we need to ask the cities, 'What can we do to get these tenants for your communities?' ”

To further complicate issues, often the cities do not appear helpful or sympathetic to the problem. In fact, GlobeSt.com was unable to find a city contact willing to comment on the parking issue for this story before deadline.

Sometimes, the problem for leasing managers is not so much with the municipalities, but with the existing tenant leases, says Philip Voorhees, SVP with CBRE. “There may be an exclusion for health clubs, with existing tenants wanting to prevent large gyms like L.A. Fitness or 24-Hour Fitness in a center, but how does a personal trainer or small studio fit in? Landlords need to get clarification on that definition.”

Voorhees adds there should be more focus on the appropriate amount of parking for the total number of uses. For example, in a strip center a restaurant may have a huge parking constraint during lunchtime, but the parking is adequate for the rest of the day, while a gym is busiest in the morning or at night when other tenants are not as highly trafficked. It's putting the pieces of the puzzle together to get it all to fit with the right amount of parking for everyone.”

Voorhees says landlords need to look at existing leases and work with tenants to accommodate a new tenancy. “Sometimes, the existing tenancy is seeking to change something about the parking and will give a concession back to the landlord.”

Scott Kaplan, SVP with CBRE, agrees that often parking issues can be worked out without bringing the city councils into the process. “If they can work it out between themselves, then great. If not, then go to the city and be unified in the plan. Most of the time, the cities—if they like the use—will find a way to engineer the parking variance. If they don't like the use or think it may cause traffic issues, they will Donkey Kong you to death. Or, they may order a traffic or impact study before they approve the variance.”

Medical office is one use that has increased in retail centers as a result of healthcare reform moving away from the acute-care setting and retail landlords looking to backfill space left vacant by stores negatively impacted by the recession and e-commerce. But this use does not seem to be creating parking issues for other tenants, says Voorhees. “I've seen less pushback on medical uses entering a retail center and more with restaurants and gyms that increase demands on parking.”

However, the problem works in the reverse for medical tenants, whose patients struggle for parking in centers with other high-use tenants like gym and restaurants, says Sonya Dopp-Grech, SVP/director of healthcare services for NAI Capital. The solution, she says, is for landlords to consider the mix and the amount of available parking before signing tenants. “Regardless of what the parking ratios are by the cities, invariably a center will get a tenant whose needs are greater. Light medical uses and rehab centers don't require a lot of parking. Typically, the parking requirements are 5/1,000 in most cities; in Mission Viejo, it's 6/1,000. All the developers are trying to maximize their coverage, so they go with the minimum. But most medical tenants need 6 or 7/1,000, and they're cramped for parking in 5/1,000. You get a center with a sports club or gym and it just kills the parking. So we're sitting there trying to get a tenant in there that meets what the city requires.”

Stay tuned for Part II of this story, which explores some of the solutions to the great new retail parking battle.