Everyone agrees that downtown Palo Alto is facing a parking crisis, but the city's latest solution to the problem -- a new five-story garage built in partnership with a private developer -- was blasted on Monday by some residents, downtown merchants and council members as an ill-advised and short-sighted giveaway of public land.

The City Council on Monday night debated but stopped just short of approving a partnership with prominent developer Charles "Chop" Keenan to build a new garage on "Lot P," a city-owned lot on High Street, between University and Hamilton avenues. Though four members of the council initially supported moving ahead with the partnership, the council ultimately voted 7-2, with Mayor Greg Scharff and Councilwoman Liz Kniss dissenting, to defer the decision until more analysis in conducted.

If approved, the new garage would allocate the top two stories to Keenan to support his new development at 135 Hamilton Ave. The rest of the garage would be available to the public and to other downtown businesses, possibly through issuance of permits.

During a long and detailed discussion Monday, four council members -- Councilwoman Gail Price, Mayor Greg Scharff, Vice Mayor Nancy Shepherd and Councilwoman Liz Kniss -- proposed moving ahead with the deal and supported a staff recommendation to draft an agreement that would effectively give Keenan ownership of the two top garage levels in perpetuity. But after a parade of technical motions and amendments, council members decided to tap the brakes and do further analysis of the prominent and centrally located lot.

Supporters of moving forward with the new garage characterized Keenan's proposal as a good (albeit, not perfect) opportunity to address one of the biggest issues facing the city today, a shortage of downtown parking. Price, who proposed drafting a memorandum of understanding, said the project has "great merit." Under the plan, Keenan would pay $7 million for the new garage, while the city would contribute another $1.5 million in construction funds and waived fees.

"It addresses one of the several needs that have been identified in the downtown, which is the lack of parking and the deficit that's been identified," Price said.

Scharff agreed and while acknowledging that there is no "magic bullet" for downtown's parking woes, encouraged to approve the partnership with Keenan as one valuable prong in the city's multi-pronged approach to solving one of the city's most perplexing dilemmas. If the garage is built, the number of parking spots on the site would increase from 61 to 145, with 63 of the spots on the new garage allocated to Keenan during the daytime on the weekdays.

"I think it's these incremental processes, if we don't take them, the process just gets worse and worse with parking," he said. "I think it's important that when you have the opportunity to build something like this, we build it."

Kniss called the proposal "an imperfect answer to a perpetual issue in need." She said she's not sure if the council can come up with a "perfect" answer during the Monday meeting, but argued that the proposed garage "would seem at least to help address the problem."

But others argued that there are still too many questions lingering over the proposal and it was their argument that carried the day. Councilman Karen Holman and Councilman Greg Schmid both voiced opposition to the proposal and said they were concerned about what Holman called "privatization of public land."

"I think we all agree there's a parking issue downtown," Schmid said. "It seems to me the answer is not to give up, as the first step, public control of public property. Effectively, we're giving up our property rights over decision-making of a valuable city property, forever or for 35 or 40 years."

Holman also pointed to a recent analysis of five potential garage sites, which identified Lot P as a location in which a garage would have major impacts on neighboring sites, when compared to other possible areas.

Councilmen Larry Klein, Marc Berman and Pat Burt had their own concerns and supported further exploration of the partnership before any agreement is drafted. Each said he has major questions about the garage's impacts on traffic circulation. They also requested more analysis of the financials, including a professional appraisal of the value of the city-owned land. Under the proposal that the council approved, the council's Finance Committee would use this analysis to determine whether the easement agreement should be "in perpetuity" or for a set term.

The proposed partnership also received a cool reception from the residents and merchants who spoke at the Monday meeting, including those who have been most adamant in calling for a parking solution. Sally-Ann Rudd, president of the Downtown North Residents Association, urged the council on focusing on "macrosolutions" to the problem of moving people around rather simply moving more garages.

"This is not the time to be proposing a precedent-setting project that does not appear to fit into long-term plans," Rudd said.

Elaine Meyer, president of the University South Neighborhood Association, added her voice to the opposition and urged the council not to move forward with the partnership. If a new garage is needed, the council should ask its residents -- not a private developer -- for funding help.

"Is the city incapable of building what it needs without enriching a private developer?" Meyer asked.

The city owns the lot site and should be able to proceed on its own, Meyer said.

"If the citizens thought it was an honest deal, we'd support it," Meyer said. "Put out a bond and we'll support it."

Rob Fisher, a restauranteur with three businesses in the area (Peninsula Creamery, Gravity and Reposado) also criticized the garage proposal, saying it would make it very difficult for the trucks serving downtown restaurants to enter and leave the site. It's not fair, he said, to put the burden of building parking for new developments on other people.

Even so, council members reasoned, the partnership should be considered further, especially given downtown's worsening parking problems. Keenan's four-story development, which has already been approved, would add about 60 cars to downtown without providing parking for them. The development, a 20,000-square-foot building with offices on the bottom stories and two residential units on the top floor, would include 24 underground spaces. But Keenan also paid "in-lieu fees" for 40 parking spaces and used a zoning exemption to reduce the parking requirement by another spots.

On Monday, Keenan told the council that his proposed partnership is an example of his willingness to "walk the talk" when it comes to alleviating downtown's parking woes. But he also urged the council not to dither on the plan.

"I want you to look at today as an end, not a beginning," Keenan said. "If the terms of the (memorandum of understanding) are satisfactory, then we'd go forward. If they're not, we'd just go build the project that we have and I'd rather not do that. I don't want to exasperate any parking deficit."