The city wants downtown parking to generate an extra $3.7 million a year.
From the February, 2017 issue
That's the total the Ann Arbor News estimated could be raised by rate increases and extended enforcement hours over the next two fiscal years (starting July 2017). But if city council approves the plan floated in a joint meeting with the Downtown Development Authority in January, most of that money would end up in the city's general fund--not in the parking system.
That's good news for the city, but not for those worried about a worsening parking shortage. "We hear from every client of ours downtown that they're on waitlists to get parking permits in the municipal garages," emails Jim Chaconas, the city's busiest commercial real estate agent. "If we are going to continue to grow office density and employee numbers in the downtown core, we are going to need parking."
"There's not enough parking downtown," agrees Barracuda Networks general manager Rod Mathews by phone. "There's not enough to have our 270 folks come downtown every day."
Downtown Development Authority stats confirm the trend. The number of hourly parkers went from 1.7 million in 2006 to 2.2 million in 2015--a 30 percent increase in ten years. In eight of nine DDA parking structures, the wait time for permits is over a year.
In December 2015, consultants NelsonNygaard concluded that "during daytime peak conditions, there is no excess capacity within the DDA system, on-street or off-street." If jobs and residents continue to migrate downtown, they predicted, the system would face a shortage of 860 parking spaces in 2019. And that's assuming that two large privately owned parking lots--one across from City Hall, the other the huge "Brown Block" lot bounded by Huron, First, Washington, and Ashley--remain undeveloped.
In the past, downtown development automatically increased the DDA's ability to provide more parking, because it "captured" all the property taxes paid by new projects. As student high-rises sprouted over the last decade, the tax capture rose from $3.3 million in 2005 to $6.25 million last year. But that link has now been severed.
Going forward, the capture is capped at a maximum of 3.5 percent annually.
"We've always used [the tax capture] to help build parking structures," says recently retired DDA board chair Roger Hewitt. "The cap will reduce or eliminate that ability--and we're already running out of parking."
DDA director Susan Pollay stresses that those figures are just "conceptual ideas" for feedback, not a finalized plan for council action. And regardless of any changes, she emails, "it will take years before the DDA would have sufficient funds to pursue a future parking facility."
The rate increases wouldn't all go to the general fund. Figures released at a joint council-DDA meeting in January show the DDA with a net gain of more than $600,000 a year by 2019. That, plus paying down other debts, will give it more capacity to borrow money in the years ahead.
And the DDA faces a time limit. "To build a parking structure you have to bond," Hewitt says. "You have to put 15 percent down in cash with the rest paid over a twenty-year period. But the DDA expires in 2033 so we're under that twenty-year window right now. This is going to make it very difficult to bond for a new structure unless the DDA is extended."
In the near term, "we're looking at a couple structures we could add some parking on top of," says Hewitt, "but that's not fixing the problem. As far as a new structure, that's a lengthy process: the financing, do you put it above ground or below ground, and there'll be geographic arguments about what part of town it should go in.
"I know South U wants more parking. Everyone downtown wants more parking."
Calls & letters, March 2017
To the Observer:
I was disappointed by your February [Inside Ann Arbor] story on the "Parking Squeeze." Not everyone agrees that municipal parking systems must be sized to meet peak demand at all times. Some people argue that self-driving cars, Uber, and the general trend toward alternative means of transportation will greatly reduce the demand for parking space. Others argue that parking structures in the city center tie up land that can be more productively put to other uses. Some even say we should be cutting back on our use of private cars, to reduce congestion and alleviate global warming.
We will no doubt disagree on these questions. But your story only presents one side when it suggests that we must build more structures. By not exploring or even listing the alternatives you have done a disservice to all of us who have a stake in the future of the city.
Thanks for raising those questions. At least since opening its first parking structure in 1949, the city has regarded parking as a necessary enabler of economic activity--but as you point out, technologies and priorities change.
[Originally published in February, 2017.]
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