City To Vote On Parking Deck Property Purchase
By Beth Milligan | April 4, 2020
Traverse City commissioners will vote Monday on purchasing the former Master Dry Cleaners building at 115 Pine Street to expand the potential space for a planned future parking deck on West Front Street.
The Pine Street property – which costs $635,000 and would be paid for through the city’s parking fund – is one of three parcels the city would need to acquire to accommodate a design for a larger parking deck. The city previously purchased land at 145 West Front Street for $1.3 million in 2016 with the intent of building a third downtown public garage on the site. According to a memo from Traverse City Downtown Development Authority (DDA) CEO Jean Derenzy, building a 58-foot deck exclusively within the footprint of that property would yield a 370-space garage at a cost of roughly $14.6 million, or $39,681 per space. Factoring in the recent loss of other downtown parking spaces to development projects on Pine and Garland streets, the new deck would ultimately yield a “net gain” of 130 additional spaces downtown.
If the city acquired additional property behind the West Front Street parcel, however, the parking deck could be extended over the alley and built out to accommodate 481 parking spaces. The construction cost would increase to $18.2 million under that scenario, according to Derenzy, but the overall cost per space would decrease to $37,885. The expanded design would result in a net gain of 241 new spaces downtown.
“With the expanded footprint, we believe we are not overbuilding parking within the downtown,” Derenzy wrote in a memo to DDA board members. “Rather, we are meeting an emerging demand and encouraging new private investment. In addition, we believe the larger parking structure will allow (us) to strategically redevelop other surface parking lots throughout the downtown for new infill opportunities.”
The DDA has a purchase option for the Master Dry Cleaners building, which is listed on the open market and has a "sold" sign in the window pending the city's finalization of a deal. The DDA's purchase option expires on April 10. Because the city would ultimately need to own the property, DDA board members voted 9-2 Friday to assign the buy-sell agreement over to the city. City commissioners will make the final decision on purchasing the property Monday. Derenzy said she’s already spoken with the owners of two neighboring parcels to the east of the building and both are open to selling their properties as well, though prices have not yet been negotiated. The three combined parcels would accommodate the parking deck’s expanded design.
DDA board members T. Michael Jackson and Mayor Jim Carruthers were the sole ‘no’ votes on moving forward by transferring the buy-sell agreement to the city. Both cited concerns about city priorities and focusing on building a multi-million parking deck during a public health crisis. “We’re talking about spending millions of dollars on a parking deck when we have every single business downtown closed and thousands of workers out of work,” Carruthers said. “I don’t think the numbers are clear. I don’t think this is the time for us to be spending millions of dollars…it’s the wrong time. It’s not essential.” Jackson said the board should “reevaluate (if) this is the best place to use” city funds during the pandemic.
The deck construction is expected to be paid for with bonds that would be repaid with tax increment financing (TIF) 97 funds – dollars dedicated for use for public improvement projects downtown. Deck construction is contingent on a DDA effort underway to extend the life of the TIF 97 plan past its 2027 expiration date, a move that will require city commission approval going forward.
Other DDA board members defended the property purchase, noting that plans for building a third deck have been in motion for years and that the city might lose its only opportunity to fully build out the garage by letting another buyer snap up the Master Dry Cleaners site. Scott Hardy said the purchase would allow the city to build a “more relevant” deck to meet parking demand and do so at a reduced per-space cost. “If down the road at some point, this community decides that parking deck is not necessary, that (property) can then be sold,” Hardy said. “There’s only so much property available in downtown Traverse City. It will retain its value.” Hardy said the risk in purchasing the property was minimal, but the risk in not preserving the city’s options for the best deck design was “critical.”
Board member Pete Kirkwood, who owns The Workshop Brewing Company, said small business owners across the community were being encouraged to fight through the pandemic and stay afloat until the economy could be reopened. He said the city needed to also keep doing business and working toward an improved future on the other side of the crisis.
“If we didn’t have a little bit of willingness to believe in the future and make significant investments, and take significant risk in the notion that this is not the end of the world and that we’re going to get through this…then we’d all just give up by now,” Kirkwood said. “By doing something like acquiring this property and taking the next step toward this parking structure, it’s effectively a vote of confidence by us that this is not the end of downtown Traverse City.”Comment