Parking Garage and the Shared Parking Program – The Main Article
January 31, 2013 § 2 Comments
C. ISSUE NO. 1 — VALIDITY OF THE BASIS OF THE COST OF THE PROGRAM TO THE TAXPAYER
1. Validity of the Cost of Structured Parking
Even though the Town’s share of the cost of the garage (and, thereby, the size of the subsidy) depends mainly on the cost of structured parking, none of the 17 council-members asked the staff to develop preliminary engineering estimates of the cost of constructing a garage on potential sites in Areas 1 or Area 2 of the Downtown at any time between 1991 and 2009. (Fig. 1) Nor, did they question the accuracy or validity of the estimates developed by the staff even though there were many opportunities to do so. In 1991, Mr. Ahmed offered to pay $223,200 for 48 parking spaces in the shared parking program. The offer implied that the cost of structured parking was about $7,750 per space in 1991. It is reasonable to assume that a developer would normally offer the minimum price possible and that actual cost may have been higher. The Town staff accepted Mr. Ahmed’s proffers. In October 1994, however, it asked Messers. Ahmed and Nachman to accept a substantially higher estimate of $13,067 per space. None of the council-members questioned the discrepancy between the two estimates, even though one estimate was almost twice as high as the other. By then, however, Chairman of the Planning Commission, Charlie Allen, and the President of the Herndon Chamber of Commerce were expressing concerns about the high fees of participating in the still evolving program. Almost exactly 3 months later, magically, the town staff, “based on a model by the Finance Director”, proposed a new, but substantially lower estimate of $5,445/space for structured parking. No councilmember questioned the validity of this new estimate either.
“IN THE FACE OF RESISTANCE FROM SOME IN THE BUSINESS COMMUNITY, THE STAFF SUBSTANTIALLY LOWERED ITS ESTIMATES.”
In 2001, the town staff initiated a concerted effort to revise the estimate; because it was concerned that sufficient money would not be collected from the participants. It proposed a figure of $14,700/space, which was based on the costs of garages in several jurisdictions: such as, Leesburg, VA and Stanton, VA. The cost of the garage (not including the cost of land) in Stanton was $18,875/space or about 28.4% higher than the proposed figure. The Town would have to raise and pay an extra $2 to $3million dollars, if the actual figure turned out to be closer to $18,875 rather than $14,700; yet, no council-member questioned the validity or reasonableness of the staff’s recommendation. As in 1994, downtown businesses strongly resisted the idea of raising the estimate. When the staff could not come up with a lower figure, the 2000, 2002 & 2004 town councils postponed the consideration of any new figure indefinitely. None of the councilmembers even proposed to inflate the old estimate by the inflation factor. Doing so would have increased the figure by about 25% to $6,800/space. Thus, the estimate of $5445/space remained operational until 2009 when the new Town Council approved the figure of $14,700/space, once again, without any discussion. By this time, however, more than 200 spaces had already been allocated to 9 businesses and the opportunity to collect much higher contributions had been lost. No one since 2009 has asked or has been asked to participate in the program except Mr. Nachman, who has recently indicated that he would like to buy a few additional spaces. Notice that the $14,700/space figure may still be very low. There are reasons to believe that it could be higher than $20,000/space. In that case, the Town’s taxpayers will pay a still higher share of the total costs.
2. Reasonableness of Developer’s Share
In 1994, developers’ share was set at 60%. On the face of it, the 60% figure may appear to be reasonable, but no available record sheds any light on its selection. It may be considered equitable, if the patrons of a business, including its employees, were expected to use 60% of the spaces regularly. The record suggests that neither the 1994 Planning Commission nor its downtown parking committee developed any conceptual framework to guide everyone’s thinking. The record also suggests that none of the council-members made even a single comment about the allocation formula in the 1994-1996 period. In 2001, however, one way in which the Town could raise more money from the business community was to increase the business share of 60% to a higher level. It floated figures of 70% and 80%, but there were no takers. In the absence of established ground rules or a well thought out rationale for allocating costs between the private sector and the government, their suggestions appeared arbitrary and without merit. Businesses were least bit interested in increasing their percentage share of the costs.They argued that the increased percentage share would curb downtown development. None of the councilmembers asked any questions. It appears that it was just convenient for them to go along with the wishes of the businesses. The 60% share is still in effect today.