San Diego, CA – The City of San Diego is proposing a significant increase in fees for valet parking and outdoor dining permits, potentially impacting hundreds of restaurants and hotels. The new pricing structure is part of Mayor Todd Gloria’s plan to address a $250 million budget shortfall, but many business owners say the move could severely harm local operations.
The Proposal: Higher Costs for Valet and Parklet Spaces
Under the proposed plan, valet parking operators and restaurants utilizing on-street dining areas would face steep fee increases. The city’s revised valet pricing structure would introduce a base charge for the first two valet spots, reflecting lost meter revenue, with additional costs for each extra space.
City officials said the measure aims to “promote fairness, transparency, and efficient use of public assets.” A spokesperson for the city told:
“Valet operations generate significant revenues to the operators. By charging the loss of revenue fee, San Diego aims to ensure that valet operations compensate the city for the actual value of the parking spaces they occupy.”
For restaurant parklets — the outdoor dining spaces introduced widely during the pandemic — the annual fee could rise from $5,000–$10,000 to $30,000 per year, marking a dramatic increase for small business owners already facing tight margins.
Reaction from the Gaslamp Quarter and Local Businesses
The Gaslamp Quarter Association, which represents over 400 businesses, including hotels and restaurants, has strongly opposed the proposal.
Michael Trimble, the association’s executive director, said the increases are unreasonable and unsustainable for businesses in one of San Diego’s busiest districts.
“For example, a $650 fee that a hotel would pay is going to be going up 14,000%,” Trimble said. “If you want a large space, you’re going to pay close to $15,000 per additional space. If you have six spaces and you do the math, it really adds up.”
Trimble warned that the proposed changes could drive businesses out of the downtown area and make it harder for employees and customers alike to afford parking.
Business Concerns: Financial Pressure and Reduced Foot Traffic
Many local business owners say they’re still recovering from pandemic-related losses and can’t afford such drastic cost hikes. Hotels and restaurants in the Gaslamp Quarter, already operating within a Special Event Meter Zone, are worried about additional charges on top of existing high parking fees.
Trimble said these fees could further discourage visitors from coming downtown, especially after the city introduced $10-per-hour special event parking rates near Petco Park on September 1.
“We have quite a few hotels in the Gaslamp Quarter,” Trimble said. “They’re worried about those fees. They’re worried about how they’re going to recover those fees.”
Since the new event rates took effect, the district has seen an estimated 40% decrease in parked cars, a trend business owners fear could worsen with the new fee structure.
City’s Rationale and Revenue Goals
City officials argue that the proposal is a necessary step to help offset financial losses and maintain fairness for taxpayers. The revenue generated would help cover maintenance costs, support public infrastructure, and close the $250 million budget deficit facing San Diego.
Officials maintain that businesses using public space for profit should contribute more toward the city’s operational costs. The city also notes that the proposed increase reflects “market value for prime parking and dining areas” in downtown zones.
Calls for Reconsideration from Business Leaders
Local business associations, including the California Restaurant Association, have joined the Gaslamp Quarter Association in urging the city to rethink or scale back the proposal before it reaches the City Council.
“What I’m asking, along with my other partners downtown and the California Restaurant Association, is to really roll back all these initiatives and rethink how it’s going to work out,” Trimble said. “The last thing they want to do is have business impacted downtown.”
Trimble added that the city should “look at the big picture” and find a balanced approach that supports both the city’s budget goals and the economic recovery of local businesses.
Next Steps: City Council to Review Proposal
The San Diego City Council is expected to review the proposal on November 3 or 4, where business representatives plan to voice their opposition.
Trimble expressed hope that a compromise can be reached before spring:
“I’m hoping between now and springtime, we can come up with a new plan that makes it more appealing for visitors, supports businesses, and ensures staff retention.”
For now, the debate underscores the tension between city revenue needs and the economic realities of small businesses still fighting to recover.
What are your thoughts on the proposed fee hikes? Share your opinions in the comments below.
