Fees for electric vehicle charging, longer meter hours during the summer, and rate increases are some of the potential changes on the horizon for parking in downtown Traverse City. City commissioners discussed a variety of parking issues at their Monday study session, including a possible redesign of the alley south of Rotary Square that would eliminate some spaces but provide a desired overlook and public connection to FishPass.

Parking and Mobility Director Nicole VanNess noted that the City of Traverse City – which took back over parking management from the Downtown Development Authority two years ago – is experiencing financial pressures related to parking. Parking is an enterprise fund, meaning it does not use tax or general fund dollars but is self-sustaining through meter and permit fees, citations, and garage operations.

Parking revenues took a significant hit during COVID with a transition to remote work and reduction in downtown visitors, VanNess said. While revenues are now “generally” getting back to pre-COVID levels, they are uneven “due to changes in parking inventory, including the sale or redevelopment of parking lots and fluctuating permit demand,” she wrote in a memo. “While meter and citation revenues have increased modestly, some facilities, such as the Old Town structure, are not fully covering operating costs.”

At the same time, some parking equipment is reaching its end-of-life or internal components are “becoming obsolete,” VanNess said. “The department is facing increased and newly allocated expenses, including IT and software costs, credit card processing fees, equipment replacement, EV utility costs, and contracted cleaning services.” As parking decks grow older, they also generate significant repair costs. Repairs have reached “over $900,000 in 2023 and an estimated $1.2 million anticipated in 2026,” according to VanNess.

Compounding matters, the city is set to lose 188 parking spaces if several planned projects come to fruition. That includes the reduction of Lot B – the farmers market lot – from 136 to 100 spaces this year when the parking lot is reconstructed and a new market pavilion installed. Lot P on West State Street, for which the city is currently seeking development proposals, would lose 57 spaces if redeveloped. Mobility improvements on State Street could also eliminate dozens of on-street parking spaces. If realized, the overall loss of parking would equal $254,000 in lost annual revenue.

It could also result in serious oversell within the city’s permit lots. State Street’s Lot P is one of two main surface permit lots along with Lot T (next to the farmers market lot along Union Street). The city has 357 active permits for the 198 spaces in those two lots now, which means they’re oversold by 80 percent. The industry standard is a 30 percent oversell, VanNess said. The elimination of Lot P would push the oversell level for Lot T to 153 percent. The city has issued a moratorium on permit sales and is now only renewing them. City commissioners noted that not all of the discussed parking spaces may actually be lost, as some projects may not move forward or could include their own parking components.

Regardless, several changes will likely be coming to stabilize revenues and ensure enough funds are available to cover parking expenses and repairs. While the city offers free EV charging now, it is expected to start charging for that going forward. Continued work to implement a previous transportation demand management (TDM) study – which provided recommendations for aligning TC parking rates with areas of highest and lowest use – means other changes could also be coming.

Those include extending meter hours into the evening during the peak summer season – between Memorial Day and Labor Day – from 6pm to 8pm. Meter and permit rates could also increase during the summer when “multi-modal conditions are better” and more tourism traffic is present, VanNess said. Those rates would then lower during the off season when local use is higher, she said. Another option would be allowing more on-street parking for employees in downtown neighborhoods on streets that don’t have homes directly in front, such as Wadsworth, Railroad, Wellington, and Boardman.

Even faced with a declining number of spaces, VanNess said the problem isn’t so much an overall lack of supply but an unwillingness for drivers to park outside of the most in-demand, centralized areas. “We really don't have a parking problem, we have a walking problem,” she said.

The DDA tried in the past to incentivize parking deck permits for downtown employees or options like free BATA passes with low response rates, VanNess said. In the end, “pricing management” often ends up being the tool that most effectively redistributes vehicles, she said. VanNess cited as one example the planned return of Hagerty employees to the office this spring, whom she expected might not start immediately using the Old Town deck until on-street “enforcement” becomes a motivator.

Parking also came up Monday when commissioners reviewed plans for Rotary Square, the new DDA park at the corner of State and Union. A key recommended component of the plan is connecting Rotary Square to the city's new FishPass project at the Union Street Dam site just to the south by redesigning part of the alley (pictured). The pavement in that section would receive a different treatment – similar to Garland Street in the Warehouse District – that makes it clear to drivers that it's a shared space between vehicles and pedestrians. Cars would still be able to travel the alley between Union and Cass, though removable bollards could be used during events to temporarily block traffic.

Fourteen of 22 parking spaces would be eliminated – in what is called Lot K on city maps – to create room for a connected FishPass overlook and seating area off the alley. The loss of spaces would result in a reduction of just under $22,000 annually in parking revenue. However, Mayor Pro Tem Laura Ness noted that in this case, that was a small amount of revenue – less than one percent of the metered total – for a “tremendous” public benefit. A connection between Rotary Square and FishPass was the top priority cited by community members across multiple public open houses and input sessions during the Rotary Square design process. Ness said that if the city was going to make the effort to ask the public what they wanted, “we need to listen.”

Commissioners did not make a decision about the alley Monday because they were in study session, but could do so at a future meeting. Mayor Amy Shamroe noted that the city wasn't being asked to do “a favor” for the DDA by providing a FishPass connection. The DDA owns Rotary Square outright and can proceed with its redesign with or without the alley component, she said. Rather, commissioners must decide whether they support “depriving our public...of access to the FishPass that we've just invested a lot in, that we just spent a lot of time working on,” she said. “It is our choice...it's something we're deciding we're going to do for the public or not.”