A cycle hub catering for 250 bikes will revolutionise Tauranga's planned new $20 million parking building in Harington St.

The high-spec hub will include showers, lockers, charging points for e-bikes and cycle maintenance facilities.

It was part of a big push by the council to reduce traffic congestion and ease pressure on downtown carparks by encouraging more people to take the bus or cycle to work.

Tauranga City Council transport manager Martin Parkes said construction of the building between Kingsview and Harrington House was due to start early next year and would also provide infrastructure for electric cars.

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The building would hold 550 carparks, boosting the number of council-owned off-street parks to 2311 once it opened. The site was currently a council carpark with 78 spaces.

It would bring the number of downtown parking buildings to three, joining the Spring St and Elizabeth St buildings. More than a third of the off-street carparks were leased.

Tauranga Mainstreet chairman Brian Berry welcomed the cycle hub, saying it would help ease peak-hour traffic congestion and open up more carparks in the city centre.

"It's fantastic that the council is thinking more laterally, such as the cycle hub. A lot of work is going on in the background."

Mr Berry said the downtown parking buildings were at capacity and the 550 carparks would reduce pressure on parking.

He also welcomed the other move by the council to free up carparks and encourage commuters to change their travel habits.

The charge for an hour's on-street parking around the periphery of the downtown would double to $2 from July 1 - effectively making all-day parking cheaper in parking buildings than on the street.

Mr Berry said it would discourage all-day parking on the fringes and make more parking available for people coming into town for business or shopping.

Tauranga optometrist Devon Palairet of Blur Eyecare, who cycled to work every day, said the cycle hub was a proactive and forward thinking big idea.

"It is encouraging on so many levels."

He said it had to be a piece of the puzzle to get more people back on their bikes. There were still roading issues and the perception of conflict between cyclists and motor vehicles.

Tauranga's lifestyle meant that people should be able to bike to work. "Why else do we live here?"

The council has come under mounting criticism for the shortage of parking in the downtown, with downtown retailer Bill Campbell saying recently that parking was under huge stress.

He said the chickens were coming home to roost on the council's decision to abolish car park minimums for new developments, with retailers bearing the brunt when customers found it hard to find a park.

Parking figures provided by Mr Parkes to the Bay of Plenty Times showed 674 of the 1839 council-owned off-street carparks were leased.

Revenue from parking meters was increasing year-on-year and had reached $1.88m with one month left to go in the current financial year. This compared with last year's total of $1.85m and 2015's $1.65m.

Fines revenue had declined by more than half since 2014, with the biggest drop of $309,000 (41 per cent) between 2015 and 2016. This year was trending towards another drop of 10 per cent to finish just short of $400,000.

Mr Parkes said the main reason for the better compliance was the parking app which people could download on to their smart phones. "It makes it easier for people to manage their parking."

The council's parking operation, which ran at a surplus of $280,000 last year, was expected to end up with a deficit of $10,000 to $15,000 this year.

Tauranga downtown parking changes from July 1

Dive Cres pay and display: 50c a day increase to $3

Cliff Rd pay and display: 50c a day increase to $2.50

City centre pay and display per hour: $2 all areas (up $1 on periphery)

Monthly concession cards, half day: $20 increase to $70

Monthly concession cards, full day: $20 increase to $100

Parking buildings, early bird: $10 a day (up $1 for Spring St and $3 for Elizabeth St)