Two Options Emerge For New Public Parking Deck

Two options have emerged for a planned new public parking deck in downtown Traverse City, including a 57-foot deck estimated at $16.7 million and a 68-foot deck estimated at $19 million. Construction on the new deck could start as soon as 2021, bringing 370-437 parking spaces to West Front Street – but will require a lengthy public engagement process, a possible election, and the extension of downtown’s tax increment financing (TIF) 97 plan.

Traverse City commissioners and Downtown Development Authority (DDA) board members had a joint meeting Monday to hear recommendations from an ad hoc committee about the parking deck and other TIF 97 projects. Traverse City bought property in 2016 at 145 West Front Street (pictured) near Pine Street for $1.3 million with the goal of building a parking deck. The property falls within the TIF 97 district, which covers the main northern half of downtown. TIF districts capture rising property taxes within their boundaries in order to fund public improvement projects, including parking decks. But TIF 97 is expiring at the end of 2027, leaving a limited amount of time remaining to fund projects – unless the plan is extended past its expiration date.

An ad hoc committee consisting of both commissioners and DDA members met for several months to review all the projects on the horizon for TIF 97 and see whether a parking deck could be paid for under the plan. Commissioner Richard Lewis, who chaired the committee, was blunt in his assessment Monday. “If we’re not willing to extend TIF 97, you can’t make this happen,” he told both groups. “It cannot happen financially.” Lewis said that if city leaders weren’t willing to consider extending TIF 97 – providing additional years to capture taxes and pay down the bond debt of the parking deck – there was no point discussing the project further. “Then we’re just spinning our wheels, cause there’s no other way you can make it work,” he said.

Mayor Jim Carruthers, Commissioner Amy Shamroe, and DDA board members Bill Golden, Scott Hardy, and Gabe Schneider – who all sat on the committee with Lewis – unanimously agreed with that assessment. Carruthers noted that while that didn’t mean everyone on the committee would automatically vote to extend TIF 97, they were all in concurrence the parking deck as proposed couldn’t happen without the extension. Detailed financial projections assembled by the committee – and reviewed by the city’s financial advisors – show that the city will need to extend TIF 97 by eight to 13 years to accommodate bond payments for the deck, depending on which design option is chosen. Both deck options are recommended to be bonded for 20 years, though the city could potentially pay the debt off as soon as 15 years.

The smaller footprint and setback requirements of the West Front parcel means the new deck will be more ineffective and costly per space to build than either the Larry C. Hardy or Old Town parking garages. Those decks averaged roughly $15,000-$17,000 per parking space to build; the new deck is in the $41,000-$43,000 per space range. Some of those costs are because of numbers that haven’t been adjusted for inflation, with Lewis also noting that both of the city’s current decks were built during economic downturns, when “bidding was favorable to most public entities.” Despite its higher cost, the West Front location has been identified as the ideal spot for a west-side deck, with other properties considered and discarded along the corridor because of factors including property cost, size, and/or accessibility.

Striving to maximize property space on the lot will require city leaders to decide: Are they willing to go through a public election process to get an extra 67 parking spaces? Building to 68 feet tall would trigger Proposal 3, the city charter amendment requiring a public vote on buildings over 60 feet. City officials could consider putting the deck on the ballot in 2020 if they aimed to begin construction in 2021. DDA board member T. Michael Jackson said he was “disappointed” the ad hoc committee had included a 68-foot option, particularly after voters last fall rejected a proposed taller building on State Street and had also opposed a 96-foot project across from the deck site at 305 West Front – the controversial project that first sparked Proposal 3. Both of those sites are now targeted for redesigned buildings under 60 feet.

Lewis pointed out that both projects were private developments, not public parking decks, and were significantly taller than the proposed deck. Voters might oppose a deck too, he said, but the city wouldn't know until it tried. Lewis also said the committee decided to reject a third, 78-foot option for the deck because they believed that would be a definite no-go with voters. “We did not make the decision to pick option one or option two,” added Carruthers. “We’re just moving the process forward so we as joint bodies can make that decision together.”

Hardy and DDA board member Steve Constantin noted that despite the cost of the deck, there could also be costs to not building it – as well as to not extending TIF 97. “We get real focused on the parking deck, and that’s the major project in this process, but without the extension of TIF 97, there are other projects that fall by the wayside as well,” said Hardy. “There’s always a cost of doing nothing,” said Constantin. “What if we do not address the parking issue in Traverse City on the west end? What does that to do development? What does it do to other spillover parking in the neighborhood?”

In the end, DDA CEO Jean Derenzy said it will be feedback from residents that helps determine the design of the parking deck. The next step in the process will be an extensive public outreach campaign over the coming months to collect feedback from community members, downtown business owners and employers, and other stakeholders before coming back with a recommendation that would go to the DDA board and city commission for approval. “This is a big determination for the community,” she said. Lewis agreed. “This is not a light decision that this community’s going to have to make through their boards,” he said. “It’s going to be important.”