Shared-Parking Program – Short Summary and The Way Forward

April 11, 2013 § Leave a comment

Municipal parking garage does not seem to be an exciting topic for public discourse, except that in Herndon it attracts keen interest on the part of many.  Downtown property owners generally believe that a garage would be a boon for their business.  People connected with the (future) Art Center expect that 100 or so parking spaces would be reserved for them.  And, then there are those who always keep a watchful eye on government subsidies. The high interest is understandable, except that very few people know (1) how much money the Town has already spent, (2) how much would a garage cost, (3) how many businesses currently participate in the Shared Parking Program (under which the garage would be built), (4) what would be the taxpayers’ share of the costs, and (5) how the Art Center ended up laying a claims to more than 100 parking spaces. All of these issues should have been discussed before the policy was finalized in 1996, but they were not; at least not in a transparent manner.  For example, the business share was supposed to be 60% of the cost of the garage. It is likely to be as low as 10% now.  The article, upon which this summary is based, presents a fascinating story of how the business share would end up being so low.

“17 COUNCILMEMBERS OVER 18 YEARS — NO ONE ASKED EVEN A SINGLE QUESTION ABOUT THE COST OF THE PROGRAM TO THE TAXPAYER.”

Over a period of almost two decades between 1991 and 2009, 17 councilmembers had plenty of opportunities to ask questions about (1) the validity of the costs of garaged spaces, (2) the taxpayers’ share of the total costs, (3) the cost of spaces allocated to the Art Center, (4) the number of businesses that might take advantage of the program, or the best ways of implementing the program.  Potential conflicts of interest, the need to hide the true intent of the program, and just the politics of the program seem to have prevented the councilmembers from asking appropriate questions.  Thus, the public has been kept in the dark for almost 20 years.  Now, for the first time, we know the reasonable bounds of such costs and the associated benefits, which are as follows:

Costs of the Program:

  • 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. Nine participants in the program have paid a total of $1.3 million so far.  None of the other businesses in the downtown have paid even a penny even though they and their customers use the surface parking spaces created by the program.  It is reasonable to expect that they will use the garage when and if it is built.
  • 100 or so spaces reserved for an Art Center would cost about $1.8 million.  Should the Art Center need 250 spaces, the cost would rise to about $4.5 million.  The Art Center does not any money to pay for the spaces; therefore, it is reasonable to assume that Herndon’s taxpayers will foot the bill.
  • Total subsidy to the nine participating 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.

“TAXPAYERS’ COST OF (COUNCILMEMBERS) NOT ASKING QUESTIONS =  AT LEAST $7 MILLION”

  • The Town will have to buy additional land from Ashwell LC (the owner of the Subaru Auto property) to build any garage at the location proposed in the Downtown Master Plan (DMP).  This purchase will increase the costs significantly. However, it is highly doubtful a 570-space garage can be built at the selected site.
  • The cost of the shared-parking program is likely to be substantially higher, if all of the 1500 spaces contemplated by the DMP are also subsidized (It appears they are eligible for the subsidy).

Benefits of the Program

The shared parking program has helped to bring only 30,000 sq. ft. of new space to  two downtown properties – the TPI building and the Ashley Building.  It may have also helped to remodel about 17,000 sq. ft. of space in 7 older buildings.   However, there are strong indications that the older buildings would have been renovated any way.  Thus, the program has realized very limited benefits. If a garage is built, it is doubtful that the subsidies that the Town would end up providing to the nine businesses, however meritorious, could ever be recovered through increased tax revenue.  In other words, the costs of the program are likely to far outweigh the benefits.

THE WAY FORWARD

Now that we know what the costs and benefits of the program are, we must debate them.  Only through open debate, would our citizens choose an optimal course of action.  Otherwise, strong resistance to the idea of building a garage would crop up at the most inopportune time.  Some people believe that if all relevant issues had been debated during the last 20 years, either

“LETS ASK QUESTIONS THAT SHOULD HAVE BEEN ASKED LONG AGO”

the program would have been terminated or the garage would have been built by now.  To move forward, however, answers to such questions as the following should be debated.

  • Is it fair for most of the downtown businesses that are not participating in the program to not pay any portion of the cost 0f the program?  Their employees and customers currently use some of the surface parking spaces built under the program.  They should  be expected to use any future structured parking spaces also.
  • Is it reasonable to provide subsidies of $5.1 million for businesses, if only about 30,000 square feet of space has been created at a cost of about $170/sq. ft?  It will be many decades, if ever, before the town taxes would recover the cost of this subsidy.
  • Should any parking spaces be reserved for the Art Center?  If 100 or so spaces are reserved for the Art Center, all of the spaces in a 311-space garage would have been taken by the current participants.  In other words, no spaces would be available for purchase by downtown businesses. On the other hand, if a 570-space garage is built and 250 spaces are reserved for the Art Center, about 150 spaces would be available for purchase by the existing or future downtown businesses.  However, we believe it is not feasible to build a 570-space garage at the chosen location.
  • Should the Town build a 3 to 4 hundred-space garage right behind the TPI center? This location will mitigate some of the disadvantages of a garage located right next to the future Art Center, if any.
  • Shouldn’t the garage be located on the periphery of Areas 1 and 2 (as in the case of Reston Town center)?  Such a policy would help keep the downtown walkable and make the available downtown land more valuable for commercial, business, or community uses?
  • Would it not be imprudent to have a two-tier system in which a significant portion of the parking is likely to be at a considerable disadvantage?  The subsidized spaces in a municipal garage will put any additional structured parking in the downtown (The DMP contemplated a total of 1,500 spaces in Areas 1 & 2 of the downtown) at a serious financial disadvantage.
  • Should the Town pursue the idea of using the public-private partnership program to build a garage?  No builder is likely to build a $6 million or $10 million garage in exchange for receiving  $1 million or $2 million worth of land.  It is reasonable to expect that he would extract a heavy price to participate in any program.

We should develop answers to these questions before the Town Manager decides to put the garage on the Town Council’s agenda. Only then, we would be in a position to decide the best course of action for our citizens.

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