The site was the only off-street car park not included in the free timed parking arrangement introduced across Shepparton in July after council classed it as a street.
But the decision was overturned at Tuesday night’s council meeting, with a vote of seven to two.
Cr Kim O’Keeffe, who moved the motion, said more than ever council needed to help support the business community.
“We need to note, and I note, that the Parking Reference Group recommendation to council was to make the car park as free off-street parking,” Cr O’Keeffe said.
“I think it’s a bad suggestion in a sense to say it’s bad for our community and bad for our CBD.
“This is an opportunity to get more people back into the CBD.
“I think it would be great if we have congestion, great if we have a problem of too many people coming into the CBD … that is a positive outcome.”
Cr Shelley Sutton seconded the motion and called on council to consider the area an off-street car park after it had “been a designated car park for many years”.
Some councillors said their would be no financial impact; however, chief executive Peter Harriott said “there’s an annual $50,000 loss ... it’s just in this current budget it has been accounted for, but that does not mean in an ongoing sense there’s not a longer term financial impact.”
Crs Dennis Patterson and Bruce Giovanetti voted against the motion.
Cr Patterson said making the car park free would have a detrimental effect on Shepparton’s central business district.
“These are prime parks in our CBD and if they are going to be free they are going to be taken up with people who are going to be getting to work late, jumping in there, parking and coming out after two hours, changing their park to one side to the other and after lunch doing the same thing, and won’t be available to shoppers,” Cr Patterson said.
“If I thought it would help the CBD I would be totally supportive of it, but I don’t think it will.”
He also noted the set-up of the car park was inconvenient.
Cr Giovanetti had similar concerns and said it was never council's intention to include prime locations, such as the West Walk car park, which were already fully occupied, in the free timed parking arrangement.
“People working in that area will be playing musical cars every couple of hours if the first two hours are free,” Cr Giovanetti said.
Mayor Seema Abdullah admitted there were some website "errors" that may have caused confusion in the community.
Core Strength Health and Wellness owner Tracey Visser was “ecstatic” about the decision, after being one of the main advocates demanding council make the car park free.
“It will be a big boost for the mall to have that car park free of charge,” Ms Visser said.
She also rejected the concerns of Crs Patterson and Giovanetti about mall traders filling up the space.
“I personally always use the multi-deck car park,” Ms Visser said.
“I don’t think businesses would allow their staff to park in there because they would have to let them leave and change their park every few hours.
“There are probably some exceptions, but we all need to do the right thing and encourage workers to park in other areas."
The council-owned off-street car parks included in the free timed parking arrangement now include West Walk/Fraser St, Welsford St/Wyndham Mall, High/Rowe streets, Stewart St, Fryers St, Fryers/Edward streets and Maude/Nixon/Edward streets, opposite 90 Welsford St.
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