January 31, 2013 § 2 Comments
A. WHY IS THIS PROGRAM IMPORTANT TO YOU?
Building a parking garage in the downtown area has been the dream of many for almost three decades. Among other things, it is supposed to revitalize the downtown. In 1996, the Town Council approved the Shared-Parking program to help accomplish this goal.
The Town has spent, not including the cost of the staff time, $3.0 million dollars in creating and implementing the program since 1996. Nine downtown businesses have purchased almost 200 spaces and contributed about $1.3 million. They were supposed to pay a lot more – may be 5 times more. This article, based on an examination of the public records, discusses how the business share ended up becoming so low. It also discusses how and when the (future) Art Center laid claims and continues to lay claims to at least 100 parking spaces, even though it has little or no money to pay for them.
The pressure to act has been increasing for sometime. The participants in the program periodically ask, “When will the garage be built?” Some believe that the garage would help even those who have not bought any spaces. And, of course, the folks connected with the Art Center are anxious as well – they want their spaces. The Town Manager has been saving about $200,000/year for paying the start up costs just in case the current or a future council gives him the go-ahead to construct a garage.
It would not be surprising if, one of these days, the Town Manager puts “the Garage” on the Council’s Agenda. At the ensuing public hearing, the proponents of the garage would claim that the garage would revitalize the downtown and not cost the Town anything. Mr. Nachman, a prominent citizen and a participant in the program, essentially did that on March 27, 2012 when he appeared in front of the council.
As usual, a few taxpayers, opposed to the garage, would also show up. They would claim that the garage would benefit only a few and that the taxpayers would pay an unfair share of the total costs.
After listening to both sides, the Mayor and her supporters on the council, more likely than not, would claim that people have already spoken, that the past leaders of the town have already approved the program, and that it is high time for taking action. We must move forward, she would say. Then, she would call for a vote. And, that will be that – in a matter of minutes, the Town would have committed to spending million of dollars, and provided extraordinary, some say imprudent, subsidies to a few in return for highly questionable results. Lets consider the costs and benefits of the program:
1. The Cost to You, the Taxpayer
Mr. Nachman’s March 27, 2012 assertion was far from the truth. Consider the following:
- Herndon taxpayers’ share of the total costs, including the $3,0 million spent so far, will amount to at least $7.0 million (in 2012 dollars) for a 311-space garage, and $9.8 million for a 570-space garage.
- 100 or so spaces reserved for an Art Center would cost about $1.8 million. It has been assumed that the Town would pay for them.
- Total subsidy to nine downtown businesses (not including the Art Center) would amount to $5.1 million for a 311-space garage and $7.5 million for a 570-space garage.
- Depending on when, where and how a garage is built, the taxpayers’ share will vary between 70% and 88% of the total costs.
Taxpayers’ share was supposed to be about 40% of the total cost, but it would be almost twice that because council-members between 1991 and 2009 (1) did not question the validity of numerous widely varying estimates of
“17 COUNCILMEMBERS — NO ONE ASKED EVEN A SINGLE QUESTION ABOUT THE COST OF THE PROGRAM TO THE TAXPAYER – THINK ABOUT IT!”
the cost of building a garage, (2) accepted a low figure based on a faulty analysis prepared by a compliant staff in 1994, and (3) failed to upgrade the figure in 2002. Even when a partial correction was made in 2009, councilmembers did not question the estimate. Throughout the 1994-2009 period, none of the 17 councilmembers asked about the financial commitments that would be required of the Town, or about a multitude of other relevant issues.
2. Benefits of the Program
The stated purpose of the program was to revitalize the town, but was it? The shared parking has had limited success in revitalizing the downtown. It has helped to bring 30,000 sq. ft. of new space to the downtown. In addition, it may have helped to remodel a portion of the 17,000 sq. ft. of space in old buildings, and keep them economically viable. However, there are strong indications that most of this space would have been renovated any way under the CCD and/or PD-MU zoning. In the process, the Town has already spent about $3 million dollars and stands to spend an additional $5.6 million if a 311-space garage is built and $10.2 million if a 570-space garage is built. It is doubtful that there is public support for spending this much money.
3. Status of the Construction of the Garage
Despite a 20-year effort, the construction of a garage is not in sight yet. In addition to the high cost and subsidies, the location of the garage approved in the 2010 Downtown Master Plan (DMP), would become controversial at some point in the future for at least the following reasons:
- The Town will have to buy additional land from Ashwell LC (the owner of the Subaru Auto property) to build any garage. It will take time and will increase the costs significantly. Regardless, it is highly doubtful a 570-space garage can be built at the selected location.
- Many of citizens believe that structured parking should be kept out of the downtown area (As in the Reston Town Center, for example).
- The subsidized spaces will put other structured parking (a total of 1500 spaces were contemplated by the DMP) at a serious financial disadvantage.
- If a 311-space garage is built, it will not benefit additional businesses because all of the available spaces have already been reserved for the existing participants in the program and/or apparently the Art Center.
- Citizens will object to subsidies for downtown businesses and the Art Center.
Alternatively, the Town could build a 3 to 4 hundred-space garage right behind the TPI center, if it is possible to do so. This location will mitigate some of the disadvantages, but the size of the subsidies will remain troublesome. Finally, one more related issue requiring careful thought and analysis must be
“THE ART CENTER WILL CONTINUE TO PLAY AN OUTSIZED ROLE”
mentioned. It is often asserted that a garage could be built under the public-private partnership program, in other words, by exchanging the land (with a builder for a garage). It is reasonably certain this cannot be done at this location. For one thing, no builder is going to accept $1 million or $2 million worth of land for building a $6 million or $10 million garage! He would want to extract a high price if he even considers joining the Town in a profitable partnership.
4. Reasons for the Lack of Progress
This article is based on a review of the minutes of Town Council meetings from 1991 until 2009 and the Community Development and the Finance Department files. The analysis suggests that potential conflicts of interest, the need to hide the true intent of the program,
“17 COUNCILMEMBERS JUST PASSED THE BUCK – TO THE (UNINFORMED) TAXPAYER “
the ability and willingness to not challenge the staff, or, simply the politics of the program contributed to (a) the much higher taxpayer’s share of the total costs (2) a rather unimpressive revitalization of the downtown and (3) the “non-construction” of a garage. Many believe that if all relevant issues had been debated during the last 20 years, either the program would have been terminated or the garage would have been built by now.
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