Revived Free Parking Now At Issue

October 24, 2003
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GRAND RAPIDS — Blue Cross Blue Shield of Michigan will get some free parking when it moves into the Steketee’s building next August, and the Heartside Business District will get its long-awaited and much needed parking study going before then.

“I’m pleased to announce that Second Story Properties and Sam Cummings came through with $5,000,” said Pam Ritsema, Parking Services director.

The donation from Cummings, a local urban developer and president of the commercial real estate firm Second Story Properties, filled the funding gap and ensured that the study will go forward even with the district’s largest parking facility, the City Centre ramp, closing at the end of the year.

Walker Parking Consultants of Kalamazoo will direct the study that will take six months to complete and cost $139,500. The donation from Cummings put Heartside over the top of that price tag at $140,650.

The study’s biggest contributors were the Downtown Development Authority and the City of Grand Rapids; each gave $50,000. Others were Western Michigan University, the Interurban Transit Partnership, the Frey Foundation, Rockford Construction, Dwelling Place, the Children’s Museum, the Civic Theatre, and the Heartside Business Association.

The study will be the second most costly in city history; the recently completed one for the Michigan Street Business Association was slightly more expensive. But the Heartside study will be the largest ever done in the city.

The study area runs east from the Grand River past Jefferson Avenue and south from Fulton Street to Wealthy. At Fulton and Division, the study area juts north to Fountain Street and then shifts east to Jefferson. Much of the area is a historic district.

Heartside has had quite a bit of economic growth in the past few years, most notably along the district’s main thoroughfare, Division Avenue. But members of the business group have said that a lack of adequate parking has stymied more development.

How the district will overcome the loss of the City Centre ramp and its 517 parking spaces will be a focal point of the study. A date for the study’s start hasn’t been set yet.

Blue Cross Blue Shield will get at least six months’ worth of free parking from a 10-year-old incentive plan that has been in hibernation for the past five years, and a few parking commissioners weren’t exactly thrilled with that freebie.

The Blues signed a 10-year lease with Rockford Development recently and plans to move into the former Steketee’s Department Store next August. The nonprofit health care insurer will make the building its regional office and bring 266 employees into the city from its two suburban sites in Kentwood, a move that meets a parking policy designed to lure businesses into the city. City commissioners approved the incentive program in 1995.

“I think the City Commission thought this was an economic development tool and they wanted this arrow in their quiver,” said Mayor John Logie.

The policy gives the Blues some free parking and the amount is based on how long of a lease the insurer signs. A minimum three-year lease has six months of free parking.

Some parking commissioners, however, feel the program puts building owners who offer parking with their leases at a disadvantage.

“The parking policy is one subsidization on top of another. It makes me uncomfortable with the Blue Cross situation,” said commissioner Monica Sekulich, who works for the property management side of DP Fox Ventures, owner of the Frey and Bank One buildings.

Parking Commissioner David Kammeraad, owner of Preusser Jewelers at 125 Ottawa Ave. NW, agreed with Sekulich.

The Steketee’s building, which Rockford purchased from a group of investors, is in the city’s Renaissance Zone at 86 Monroe Center, meaning that most local and state taxes are exempted for its owner and tenant.

Although BCBS doesn’t pay state and local taxes, the theory is that the insurer got a lower lease rate than competitive building owners could have offered because Rockford won’t have to pay property taxes for much of the next 15 years. Building managers include the cost of taxes in leases.

Michael Ellis brought up another “free parking” issue. The past parking commissioner and current president of Ellis Parking Co. reminded the board that they agreed not to offer free parking in the new city-owned Monroe Center ramp that opened last month.

But Ellis said he heard that the restaurant going into the ramp’s ground floor was being allowed to give customers an hour of free parking. Ellis said his ramp, a few hundred feet west on Monroe Center, can compete with the city on service and rates.

“But nobody can compete with free,” he added.

Ellis asked commissioners to put the matter on their agenda and Logie said the board would consider doing that. Commissioners also decided to give the Blues the incentive, but not offer it to any other businesses until they have a chance to review the policy.

“I think there is enough concern here to look at the policy and make recommendations to it,” said Kammeraad. “Right now, it isn’t a level playing field.”    

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