Downtown may just be spaced out

April 22, 2012
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As the fiscal year heads into its stretch run, Parking Services has found out that revenue is on track to be higher than expected. That’s because activity from downtown businesses and events has increased, raising demand for parking in the department’s ramps, lots and metered spaces.

“Operating revenue for FY12 is estimated to be up over budgeted amounts,” said Kimberly Miller, Parking Services manager.

Parking Services is now looking at revenue of $12.1 million for the year, up by about $1 million from the budget adopted last summer. Expenses are expected to be higher, too: $10.8 million instead of $9.9 million. Still, the system should have a surplus of $1.3 million by the time the year ends June 30.

The department has projected revenues will be $12.1 million again for FY13, with expenditures projected to reach $11.1 million.

But as the year progresses, some adjustments may be necessary; changes to the system’s physical layout may leave Parking Services with fewer spaces. The system offers about 7,800 spaces in its lots and ramps.

One change has already happened. The Interurban Transit Partnership has taken possession of the Area 6 lot and its 148 spaces for construction of the new Amtrak station. The lot was used for the DASH South route; its revenue was about $25,000 a year.

Rockford Construction recently bought the small Area 3 lot on Ionia Avenue just south of Fulton Street. Those 60 spaces may be removed from the parking inventory July 1. The lot’s annual revenue has been roughly $136,000.

The recent announcement that Jackson Entertainment, part of the Celebration Cinema group, may build a movie theater and conference complex on the Area 5 lot would drop 165 spaces and nearly $200,000 in revenue annually from the system. If the development goes forward and the adjacent Area 4 lot isn’t sold, there will be 419 spaces next door to the complex, another 127 spaces a block away in the Area 1 lot, and about 2,000 more in nearby ramps.

Miller told parking commissioners earlier this month that as the city grows, the surface parking lots are pretty much seen as sites for downtown development. “The DDA owns land underneath eight parking lots. These parking lots contain 1,832 parking spaces, which may be sold for private development with no immediate replacement parking available,” she said.

Miller added that the department carefully monitors the parking supply as part of its effort to support development in the district. But she added that the number of spaces isn’t the only thing Parking Services keeps a close eye on.

“We also monitor the financial health of the parking enterprise system, and we have reached our financial capacity for expansion. We cannot build any more parking without very strong and compelling financial justification,” said Miller.

“As downtown development occurs, it is increasingly difficult to find efficient, affordable solutions for parking needs,” she added.

One possible new development is a casino going into the former Sligh Furniture Co. building at 221 Logan SW, not far from where the Downtown Development Authority and the Grand Action Committee are putting together the Urban Market. The Committee for More Michigan Jobs has identified the 5-acre site for a privately owned gaming operation and is leading a petition drive to get it on the November ballot to let voters decide whether they want one downtown.

While Parking Services has helped the DDA and Grand Action with parking needs for the Urban Market by transferring $200,000 to that effort, it’s unlikely the department would be able to do the same for a casino.

“We currently don’t own any off-street parking in the area,” said Pam Ritsema, who directs the city’s enterprise services, which includes the parking department.

“Based on the few casinos I’ve visited, I would think they would be interested in providing their own parking and would have sufficient resources to do so,” she added. A casino developer would have to meet the area’s zoning and development requirements through the Planning Commission and could ask for financial incentives or get help in creating parking through the city’s payment-in-lieu program.

Developing parking is costly, even for a surface lot. Parking Services expanded a lot on East Fulton by 12 spaces at a cost of $170,000, or $14,167 per space. About a decade ago, that per-space cost was closer to $5,000.

In the past few years, the department has added three ramps and a handful of lots downtown and has purchased the Government Center ramp from the city to help balance the city’s general operating fund. Miller said all the additions have raised the department’s annual expenditures.

The department’s debt service for this fiscal year is $4.4 million — twice what it was in 2008. That expenditure has been projected to top $4 million annually through 2017. In 2018, it is forecast to drop to $3.7 million. Miller said the current debt service equals 36 percent of total revenues.

Miller noted that Parking Services has automated as many of its functions as possible in an effort to control personnel costs. Incorporating credit-card payments has cut back on billing expenses. The department still offers one free hour of parking in the Monroe Center ramp, which would be worth $250,000 in revenue each year if the fees were collected. “The merchants are really appreciative we do that,” said Miller.

There is a plan in the works to conduct a major traffic, transit and parking study for downtown. The effort would be led by the DDA and has been estimated at costing $250,000, most of which would be paid for by the DDA. Parking Services will be involved in the study and in picking up a portion of the cost. The department is putting together a steering committee to represent its interest and to help manage the effort.

But at the last Parking Commission meeting, concerns about the study were discussed. “One issue that has come up is the scope of this project is huge and may be more of an effort than the money allocated toward it,” said Ritsema.

“I want to echo Pam’s comment. This is a big piece of work,” said Parking Commissioner Andy Guy. He felt the commission needs a smaller goal: to determine what parking’s role is. “We’re trying to do a lot of things and we may end up doing nothing,” he said.

“This is a big topic. I would rather have a downtown traffic plan,” said Parking Commissioner Dave LaGrand. “If our goal is to increase bike traffic by four times, fine, then go ahead and say it.”

Parking Commissioner Michael Ellis wondered what questions would be answered from the study. Parking Commissioner Joan Rosema-David wondered if there were areas where more parking is needed.

Jay Hoekstra, a planning expert working with the DDA on the project, said the study’s request for proposals was being reviewed by a DDA committee and its objective was evolving. But Hoekstra said commissioners don’t have a lot of time left to get with the program. “If you’re not ready to go, we can rewrite it and come back next month,” he said. “My impression is, you might want to move on it pretty quickly.”

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