Parking, from surface to stacked: Plans draw debate as ramp could extend expiring TIF 97

City Government Reporter

TRAVERSE CITY — Spending more than $35 million on a parking garage seemed like a lot of money to Fusion Framing Manager Jane Garrett.

Garrett, who works in a shop in the 100 block of East Front Street, said she likes how her current walk from a city lot where Union Street meets Grandview Parkway brings her along the Boardman/Ottaway River.

Her commute may change in an effort to shrink surface lot parking in favor of building a parking structure on downtown's west end — but she doesn't see any any other option.

"Parking is such a problem, and I would hate to see one off Grandview," she said.

Building a third parking ramp is one major reason city and Downtown Development Authority leaders are discussing extending TIF 97, one of two tax increment finance districts. Borrowing money to build the parking garage and extending the TIF plan to pay off the loan are likely to be hotly debated issues.

So much so that Traverse City Mayor Richard Lewis is certain voters will force one or both decisions to a referendum. He told the DDA board as much at a January study session.

"Plan on it," he said afterward. "Anything we decide to do with all that, there's going to be a referendum. That's fine, that's the people's right to do so, that's OK. Just don't ever assume they’re going to walk in and say, ‘Oh yeah, everything's great.’"

Voters would have two chances to force the issue to the ballot, one if the city commission amends the TIF 97 plan to extend it and another if the city commission gives notice it intends to borrow money to build the parking garage, Lewis said.

Both he and Derenzy said they expect the city will decide on both extending TIF 97 and issuing the notice of intent in early 2024 — Lewis said commissioners would make both decisions around the same time, and would need to do so in time for any referendum to make the November ballot that year.

A referendum is something former DDA board member T. Michael Jackson hopes to see, he said. He agreed a third parking ramp is probably needed — it was debated for years during his time on the board — but he’d still sign a petition to put it to a vote.

"I think (a vote) would be needed because I think, really ... people need a voice on the issues that affect their lives, and people need a voice in these things," he said.

Jean Derenzy, the DDA's CEO, said she didn't necessarily agree a referendum is inevitable, but noted voters have decided on past projects.

Voters approved the Larry C. Hardy Parking Deck in 2002, but four years later, they rejected a $16 million bond issue for public parking inside an eight-story building planned for 145 West Front Street — the current site of city Parking Lot V, as previously reported.

City commissioners bought the lot in 2016 planning to site a new parking garage there. It's now planned for another lot on the same block.

The big question to Jackson is how to pay for that new ramp, he said. He believes extending TIF 97 would break a promise city leaders made when they adopted it in 1997— that it would expire in 30 years with its last date of capture Dec. 31, 2027.

After that, the growth in the district's taxable values reverts back to the city, other jurisdictions and millages.

Lewis agreed that was the implied promise when TIF 97 was adopted, but he believes the work isn't finished. The city wouldn't have enough money to pay for a new deck without it. That should come as no surprise, since a past city commission determined as much several years ago.

Derenzy argued TIF allows the city share the burden of downtown infrastructure. Otherwise, city taxpayers would be paying full price for projects that benefit a much wider user base. It's a concept the DDA explored extensively through its Moving Downtown Forward study, completed at the end of 2022.

While the city and DDA could explore revenue-sharing with other jurisdictions as a way to allay their concerns about their tax revenues being funneled into downtown projects, resetting the tax base for TIF 97's district would hamstring the city's ability to fund more projects, Lewis said.

A public-private partnership sounded good to Jackson, one where a development that benefits significantly from the parking garage helps to pay for it.

Or the DDA could partner with a developer to add some public spaces to a garage that also serves their building — Derenzy said the DDA is open to this possibility.

Assuming voters force a referendum then approve another parking garage, the TIF extension to pay for it or both, that would allow for construction to begin on the garage in 2025, according to tentative timelines from the DDA.

The DDA is also supporting a shift away from lots of surface parking to "stacking cars," as board member Pete Kirkwood put it. Changing trends in transportation could have city leaders regretting building another parking garage in 50 years, but for now it's the best answer to short-term vehicle storage, both in terms of good land use and environmental impact.

"So future people, sorry if we screw it up, we’re just trying our best to address a complex constellation of problems with the tools and concepts we have now," Kirkwood said.

Building another parking structure also supports city zoning policies that don't require parking in downtown commercial districts, Derenzy said.

Other cities are doing the same, with the New York Times reporting a growing trend of city governments around the U.S. eliminating parking minimums. A few even added parking maximums in an effort to combat sprawling lots that amount to 14 percent of land mass in some cities.

Planning is underway on the multi-pronged effort it’ll take to consolidate surface lots into a new garage, while planning the funding and construction of the garage itself. Board members indicated they believe the DDA is ready to consider a request for proposals for the parking garage at their March 17 meeting — city commissioners would ultimately have to approve that request, Lewis said.

Coordinating those efforts is especially important, as the DDA is on a path to take 297 parking spaces offline by 2026, according to an authority timeline.

All told, it would be a loss of 297 — more if the city were to redevelop Lot X off Hall Street and Lot T at Union Street and Grandview Parkway.

Building a new, 625-space parking ramp would more than make up for the loss of these surface lots, for a net gain of 79 if lots T and X are redeveloped or 276 if they remain. (That doesn't account for spaces that disappeared before, including a city-leased lot at the corner of Pine and West Front streets that's been redeveloped starting in 2019.)

Closing Lot V means Garrett will have to find somewhere else to park on Saturdays when the Sara Hardy Farmers Market is in Lot B, she said. She typically parks in nearby Lot T but she switches to the city lot at West Front and Pine to avoid the farmers market crowds.

Plans are to send Lot V permit holders to Old Town Parking Structure, VanNess said. It has 521 spaces, according to the DDA, and as of the fall had 80 percent capacity even at busy hours. Efforts to steer people toward the garage since then, including offering $30-per-month permits, are working but there's still plenty of room.

The walk from Old Town Parking Structure can be nice in the summer, too, but it's farther away and not so nice in the winter, Garrett said.

"It might seem silly but that extra two blocks at the end of the day feels pretty long."

Garrett isn't alone — VanNess noted some respondents to a downtown employee parking survey turned down the free Old Town Garage permits the DDA offered for their participation because they didn't want to walk.

Convincing people to walk a few minutes more is a behavioral shift the DDA will have to encourage if it wants to consolidate some of its surface parking, DDA board members agreed. That includes an increased focus on making walking or other means of accessing downtown more easy.

VanNess said she understands there's a "delicate balance" with parking and expects downtown employees will want a closer spot for their cars. But it's better to have vehicles that sit all day in a more distant parking ramp, leaving the spots closest to shops and restaurants free to turn over more frequently.

Plus, Old Town Parking Structure is still fairly close to downtown's core, VanNess said — maps she and DDA CIO Harry Burkholder presented at Friday's study session show it's a five- to seven-minute walk.

Board Vice Chairman Scott Hardy said it's clear the DDA needs to encourage a change in behavior for people used to parking very close to downtown shops and restaurants.

Both VanNess and Derenzy referenced ongoing discussions about a downtown trolley bus that would make it easier to head downtown without driving — Derenzy said that could benefit people who live nearby but still drive. Trolleys, bike-shares and more are all part of a mobility study that's underway.

Meanwhile, five private developments are planned or under construction in the downtown:

That had DDA board member Pam Marsh concerned the parking reconfigurations could disturb the downtown while new housing builds would leave the parking situation right where it started. Hardy pointed out those residential developments mostly have private parking planned, but any overflow from those buildings would have to park somewhere.

While Marsh said she loved all the focus on walkability and transit, she believes people are still going to drive.

"The reality is, we are in northern Michigan and in winter that requires a motor vehicle on some days, and we’ve got this quaint, beautiful downtown that in order to keep this energized, we have — I just feel like sometimes we’re losing focus on the big picture," she said.

Kirkwood pointed out much of that development is coming whether the city addresses downtown parking or not.

Board Chairman Gabe Schneider said the goal isn't to build a certain number of parking spots to meet future demand, but to put land downtown to better use.

"We can't build our way out of this but we can at least work to address and minimize the amount of flat, one-dimensional parking and maximize the amount of 3-D, vertical parking," he said.

Hardy later echoed Marsh, calling the downtown the region's "heart" and that any plans and changes must be careful not to kill it. Some downtown merchants are starting to get nervous about coming changes to a parking situation some customers already find frustrating.

Derenzy responded that DDA board members recently agreed that protecting and supporting local businesses would be one of their guiding principles of the Moving Downtown Forward plan. She agreed local businesses are the downtown's "lifeblood," and they depend on customers having access to them.

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