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Payment in Lieu of Required Parking



An MPC Finance case study

Program background

Libertyville’s downtown district is within walking distance of the Village’s Metra station and has developed into a thriving commercial center. As the Village continues to attract new businesses to its downtown, added congestion and an increased need for parking have pushed residents and Village staff to rethink how to preserve the area’s rich history and pedestrian-friendly streets.

In February 2007, the Village introduced payment in lieu of required parking into its zoning code. Libertyville has promoted fee-in-lieu as an opportunity that gives added flexibility for developers looking to construct new buildings or add on to existing buildings in the downtown area.

How it works

Developers within the Downtown Commercial District can apply for a permit for payment in lieu of required parking spaces, provided that they are constructing a new building or adding floor area to an existing building. The minimum number of required parking spaces for the property cannot be available to or acquired by the owner in qualifying developments. Both residential and commercial developments are eligible for fee-in-lieu.

The Village was intentional about using fee-in-lieu as an economic development tool that gave developers the opportunity to improve their properties without having to provide parking. The developer can choose how many spaces for which they wish to pay the in-lieu. The required payment for each parking space is $15,000, which goes toward the construction of shared parking in Libertyville’s downtown. Though the fee typically does not cover the cost of the Village constructing an equivalent parking space in the area, it is often made up using returns generated from the Downtown Tax Increment Financing district or other Village revenues. It provides a number of advantages that benefit both property owners and residents:

  • A greater volume of shared parking can potentially reduce the number of parking spaces needed downtown.
  • There is a greater control of where parking is located and how it is used.
  • Enforcing parking minimums would force property owners to tear down existing structures. Payment in lieu of required parking helps support the Village’s historic preservation efforts.

To date, one commercial property has been issued a permit by the Village, with another permit application currently under the review process by the Plan Commission and the Village Board. Though there has been some concern that not enough new parking is being created for the recent surge in downtown development, the Village has continued to embrace fee-in-lieu for the benefits it can bring. Libertyville’s six-member Parking Commission meets monthly to discuss such issues as parking enforcement and education, and may offer advice and recommendations to the mayor and Village Board on important zoning decisions such as fee-in-lieu.


Department of Community Development, Village of Libertyville

  • Goal

    To offer greater flexibility to developers and create more shared parking in Libertyville’s Downtown Commercial District.

  • Target


  • Financing

    Payment in lieu of required parking fees.

  • Successes

    Provides opportunities for developers to build or improve properties without having to provide required parking.

  • Lessons learned

    Though the cost per space the Village charges a developer does not fully cover the cost of creating a new downtown parking space, payment in lieu of required parking is an effective economic development tool that allows for greater flexibility as to where parking is located and how it is utilized.