Parking Ramp Concerns

During the April 7, 2014 Council Meeting, four volunteers with Voters with Facts expressed the following concerns with respect to the proposed $9.7 million to $10.3 million Parking Ramp.  The preferred City option is the more expensive, $10.3 million version.

1)  THERE IS NO FUNDING VEHICLE.  IF IT PROCEEDS, TIF #8 WILL FAIL

The purpose of the North Barstow TIF district was to encourage private investment in what was once a blighted area.  As a result, the City razed the existing buildings and put in new base infrastructure – roads, water, sewer and the like - to make the area attractive to new business.  It took $6.2 million from other City funds to acquire and remediate the property.  These funds were effectively a taxpayer donation.  There is no plan to recover them from TIF property taxes.  Over and above those funds, it has borrowed $10.995 million from private investors.  This is general obligation debt which is backed by us taxpayers.  It has also borrowed $3.2 million from the City’s economic development and risk funds.  In all, the total infrastructure cost to date is $20.4 million.

Unfortunately, that investment has not resulted in a rush of private property owners to build on the cleared land.  Through 2014, the total anticipated incremental property valuation in the area is $38.9 million – a ratio of private to city investment of 1.9 to 1 – that’s far short of those TIFS that are touted as successful, like Oakwood Mall and Hutchinson – which have ratios in the 8 to 1 to 10 to 1 range.

Money

An investment of an additional $9.7 million to $10.3 million for the ramp will insure that the North Barstow TIF fails.  Projections based on a $7.7 million ramp found in Amendment 2 to TIF # 8 extended the TIF date out from its start date of 2002 to 2032.  That amendment assumed that two additional major building projects would occur in 2017 and 2018 totaling $10.5 million.  Those assumptions are strictly hope, as to the best of our knowledge, there are no prospective builders in the district.  The end date of 2032, takes the project out beyond the maximum TIF period of 27 years and includes the entire four year grace period the State allows for TIFs in blighted areas.  The additional projected debt for the ramp of $2 to $2.6 million would extend the repayment date several years beyond the absolute deadline of 2032. The ramp as proposed cannot be legally funded under this TIF.

As such, if the parking ramp proceeds, TIF District No. 8 is a failed TIF.  This ramp cannot be built under this TIF.  We would ask the City and this Council to put any further expenditures in terms of schematic designs, design development, or contract documents on hold, while the requisite TIF planning is done.  At a minimum a new overlay TIF needs to be both proposed and approved before any further work is conducted.  Given the amount of effort required for an overlay, we would think that a decision on the Confluence project would be key before doing any further work on this project.

It is unfortunate that $9,500 was spent for a concept design.  We would recommend that the City staff in the future handle matters in the same way the Developers have done on the Confluence project –do not spend any money on sketches or architectural drawings until funding is approved.

To pay off this new TIF debt along with that which has already been incurred, a total of $80-$89 million of incremental construction is required.  Where will this come from, as there has only been $40 million committed to date?

 

2)  PARKING RAMP IS NOT NEEDED – THERE IS MORE THAN ENOUGH EXISTING PARKING

There is already a considerable amount of parking available for the existing businesses and we believe that this kind of expenditure is a waste of funds.

The City last year spent $185,000 to black top the big lot across the street from the Livery on the corner of North Barstow and Wisconsin Street.  That is a lot of money. In terms of property taxes, that is equivalent to 138 homes (22 blocks) at an average assessed value of $150,000.  For that kind of expenditure, we should consider the lot to be an investment in parking, rather than a temporary solution.

That new lot does add 200 parking spaces.  RCU’s remaining lot has 140 stalls. There are an additional 75 parking spots behind the Galloway Grill between Farwell and Barstow Street which are across the street from RCU – between the three lots, there are 415 spaces.  There is no doubt some parking planned near the JAMF building.  JAMF is requesting 210 spaces in the new ramp and RCU 120, so their needs appear to be more than covered with these three existing lots.  In addition, there are 101 spots in the Haymarket Lot on the corner of Graham and Eau Claire Street, not to mention the 450 stall Civic Center parking ramp at the corner of Gibson and Farwell that is largely empty.  Hopefully, the hotel once it opens will provide some customers for the lot, but as the hotel will be down-sized to 80-90 rooms, the majority of the stalls still will be available.  In total, there are 1,342 parking spots in downtown Eau Claire.

Unlike a black topped area, a ramp requires considerable maintenance.  Best case, the parking fees will cover the day to day cost of running the ramp, including minor maintenance.  In terms of major maintenance it will be another building that constitutes an ongoing drain on capital.

Before building a parking ramp, we should assess the true parking needs.  We cannot do that until we know whether the Confluence Performing Art Center will become a reality.  As pointed out in Sunday’s Leader Telegram (April 6th), there are still many hurdles to that project.  We would also ask the City and staff to provide information on anticipated operating costs and future capital needs of the proposed ramp.  Until we citizens have the information, no money should be spent on designing let alone building a parking ramp.

 

3)  THE RAMP WILL RESULT IN THE LOSS OF A DOWNTOWN DESTINATION BUSINESS

We are concerned about the Post Office located on North Barstow. The Post Office is the site of the proposed parking ramp; the plan is to evict the Post Office in September; and the building will be razed thereafter. 

The decision is puzzling given the City Council wants to make downtown Eau Claire a destination.  Only two businesses come to mind that have provided steady traffic to downtown year-in and year-out.  Is it not better to foster those two businesses rather than drive them out of downtown?

Certainly one is the U.S. Post Office.  And after picking up or mailing their letters, buying stamps or sending packages, folks tend to shop or stop for a bite to eat.  The post office building appears to be in great shape; in fact the roof and boiler were replaced in 2012.  Yet, last June, the City attorney declared the building 100% blighted, concluding, as a result, that it could be added to the North Barstow TIF.

The basis for the 100% blight finding could apply to most any city building close to river and built more than 35-years ago.  So why is this property deemed blighted?  It is blighted because (1) the former mail sorting area is no longer being used, (2) there is evidence of past flooding – all damage has been repaired, (3) walls and floors contain asbestos, (4) there were unrepaired cracks in a few of the cinder walls, (5) the site has coal tar deposits that will eventually have to be removed, and (6) the building is in the way of a proposed, but not yet approved, street and bike path extension.

Despite the finding of 100% blight, the City purchased the property for $350,800, a 25% premium over its assessed fair market value.  Effectively, it has removed the property from the tax rolls and lost the annual tax revenue of almost $12,000 ($11,600).  Fortunately, the Post Office pays monthly rent to the City, so the overpriced transaction has not been a complete loss.  The city has asked the Post Office to vacate its present location by September 2014.

Instead of destroying the Post Office, surely it would be better to leave it alone.  Let it continue to bring business downtown.  Let us not throw good money after bad by spending funds to relocate it elsewhere.  If and when the federal government finally closes the U.S. Post Office system, what about a plan to sell the building to a private business and let it decide whether to repurpose or demolish the building?

Another destination business is Scandinavian Imports, 16 S. Barstow.  As a result of the proposed Confluence project, Dawn Bergstrom, owner of Scandinavian Imports, is forced to move her downtown business after more than 50 years downtown and 43 years at 16 South Barstow.  According to Bergstrom, the store draws clients from all of the U.S. states and Europe’s Scandinavian countries.

John Mogenson, building owner, plans to sell the entire historic South Barstow block to the Haymarket LLC.  Haymarket will then demolish the historic buildings to build a mixed-use building including student housing.

Mogenson has refused to offer Bergstrom a comparable downtown building at the same rent.  She has no other option than to leave downtown; despite the fact that demolition of the historic buildings will begin, at the earliest, mid-June 2014.

Earlier this year, Mogenson agreed to extend her exit day to May 2, 2014.  Even after receiving rent for the entire month of April, on April 2, he served Bergstrom with eviction papers to oust her by April 16!

The City of Eau Claire effectively gifted Mogenson with the 2 South Barstow building, enabling him to sell the historic South Barstow block to Haymarket at full market value.  Given this extraordinary treatment, surely the city is in a position to ask him to treat his tenant fairly.   Anything the Council would do to encourage reasonable treatment would be appreciated.  Likewise anything it can do to retain this wonderful business downtown would benefit us all.

 

4)  IT WILL DRIVE THE FARMERS MARKET OUT OF PHOENIX PARK AND DOWNTOWN

We are concerned about the future of the Farmer’s Market by Phoenix Park.  It is one of the nicest markets many of us have seen and is one of our favorite things from early summer through fall.  Most of us love the variety of fresh produce and specialty items. People bring visiting relatives down to it and tell friends who live in surrounding communities to check it out.  It has been a Saturday morning routine for many of us for several years now.  A lot of people come downtown for it.  It has been a great success for vendors and customers alike.  Because of the number of customers, vendors from outside our area have even found it worthwhile to sell there.  We have had the benefit of being able to purchase things such as peaches and cranberries.  It was evident late last season that the market was being squeezed out and many of us found ourselves skipping it or going to the market on Sundays at Festival Foods instead.  The newly paved lot across from the Livery was a pleasant surprise, as it did provide many of the former missing spaces.

Now we find out that lot is temporary and more construction is planned.  In fact, there won’t be a single empty lot when the construction is completed. The parking ramp is not a solution, as it is simply too far, particularly when purchasing anything large or cumbersome like apples or potatoes or jugs of maple syrup.

If our city is concerned about health, we should not have policies that are making it harder to frequent the market.  We propose mapping obesity and then we strangle the market where people, of their own free will, purchase fresh food?  If we are sincerely concerned about poverty, we should not be wiping out customers from the vendors, many of whom have modest incomes.  Also, policies that increase property taxes, hurt homeowners and renters alike.

Our request to the Council is to stop adding buildings to this area.  More buildings mean more congestion.  That will end the Farmer’s Market as we know it.  Will the businesses and property owners who will have a defacto private park be willing to pay to relocate the farmers market pavilion?  Maybe Altoona would adopt this wonderful market.

Possibly, initially, what was done with TIF 8 was a good thing.  It is, however, like a glass of wine. The consensus seems to be that one might be good for you. Two?  Maybe.  Five?  Definitely not.  With TIF 8, we are looking at glass eight.

Please do not add the proposed ramp, especially before a need is even determined.  Leave the new parking lot as is and let us continue to enjoy the Farmer’s Market and the Park.