The Scotsman Hotel has avoided an almost $303,000 parking bill after Niagara-on-the-Lake council approved a plan that will allow all 12 required parking spaces to fit on the Old Town property.

Council also finalized the planning changes Tuesday night that reclassify the six-suite establishment at 95 Johnson St. from a country inn to a hotel and allow the establishment to serve patrons food and alcohol in the lounge and courtyard.

The Scotsman was classified as a country inn, which allowed it to provide overnight accommodation and serve breakfast to guests, but not have the broader hospitality area its owners were seeking.

“One of the key issues that the applicant ran into with this proposal was the inability to add hospitality space to a country inn,” said Aimee Alderman, the town’s director of planning, building and development services, during last week’s meeting.

Council has now redesignated the property from residential to a tightly restricted commercial designation and rezoned it to allow the hospitality area. Commercial cooking equipment will not be permitted.

The major unresolved issue heading into Tuesday’s meeting was parking.

The property currently has eight parking spaces. Staff determined the hotel, hospitality area and residential unit would normally require 14 under municipal rules, but agreed to reduce that requirement to 12.

That still left the property four spaces short under the original layout, which would have required the owners to pay $302,864 in cash-in-lieu of parking at the town’s 2026 rate of $75,716 per space.

“This seems like a significant hurdle for the Scotsman to overcome, considering there’s only six suites,” said Blair McArthur, who owns the inn with his wife, Brenda, during last week’s meeting.

McArthur said the commercial designation would also increase the property’s taxes.

He also pointed to a parking study — requested by the town and paid for by the Scotsman — conducted during peak periods, Friday at 2 p.m. and Saturday at 3 p.m.

“The daily parking demand did not exceed the total supply of parking spaces available,” he said.

Planner Dana Anderson of MHBC Planning, representing the owners, also argued the parking requirement was excessive.

She asked council to require just one parking space for the hospitality area, which she said the Scotsman already provides, and drop the condition requiring the owners to address the parking shortfall before the new use could go ahead.

“We respectfully do not see the need for the five additional parking spaces specific for the hospitality area,” Anderson said.

Rather than approve the $302,864 payment last week, councillors sent the parking issue back to staff to explore another approach with the owners.

Staff returned Tuesday with two options: require eight spaces on the property and charge the owners for the remaining four, or fit all 12 required spaces on-site using a dedicated valet service.

The arrangement means some vehicles could only leave after others are moved, requiring an ongoing valet service.

“For example, a vehicle parked in space 10 could exit only if vehicles occupying spaces 11 and 12 were moved first,” the staff report says.

Staff had recommended the $302,864 option in its written report because it would provide a conventional parking arrangement that doesn’t depend on a continuing valet operation. But Alderman told council Tuesday both options were considered acceptable.

Coun. Wendy Cheropita moved to go with the valet option, seconded by Coun. Tim Balasiuk.

Cheropita called it a “very good solution.”

Coun. Andrew Niven questioned what would happen if the valet service were discontinued.

Alderman said the town can require the valet service through the site plan approval agreement and could enter into additional agreements if needed to ensure it continues.

Council approved the valet option, eliminating the four-space cash-in-lieu charge.

Coun. Sandra O’Connor said she supported the parking solution but remained opposed to redesignating the property commercial.

Council then passed both the official plan amendment and zoning bylaw, finalizing the planning changes.

The owners previously proposed using four leased spaces at 129 Johnson St., but town staff did not support relying on parking on a residential property for the commercial use. Staff also said there would be no way to ensure leased spaces remained available to the hotel permanently.

No new rooms, additions or other physical expansion were proposed.

“The function of the site is going to continue to remain, essentially, as is,” Alderman said at last week’s committee meeting.

That prompted Niven to question why the new use should trigger a bigger parking requirement.

“There’s no increased guest count and there’s no expansion of the existing property,” he said.

Alderman said the difference was the hospitality area.

O’Connor also raised concerns at that meeting about whether changing the property from residential to commercial conflicted with the town’s goal of preventing commercial uses from creeping into residential neighbourhoods.

Alderman said staff deliberately narrowed the new commercial permissions.

Instead of allowing the broader range of businesses normally permitted in a commercial zone, the property is limited to a hotel, hospitality area, residential unit and accessory buildings and structures — which town materials do not further specify.

Lord Mayor Gary Zalepa rejected the idea that the change amounted to typical commercial expansion into a neighbourhood.

“This is not an intrusion of commercial into residential zones,” he said. “This is an enhancement of guest services.”

It was Zalepa who moved last week to send the parking issue back to staff to explore alternatives with the owners.

That led to the valet proposal council ultimately approved Tuesday night.

paigeseburn@niagaranow.com