VOTERS WITH FACTS RESPONSE TO STUART SCHAEFER’S 
"Why Build a Parking Structure in the North Barstow Area”

What are the arguments advanced for a parking ramp?

 Argument 1.  The City has entered contracts with JAMF and RCU to provide the following Parking Spaces (either ramp or surface parking):

For JAMF – 210 within 800 feet
For RCU - 300 within 800 feet

 Response:  That is incorrect – Neither agreement references 800 feet, although the existing parking is within 800 feet (.17 mile), so it is not an issue.

The RCU requirement per the contract is 120, not 300.

The contractual obligation is met with ease via existing surface parking, although it leaves little open for public use.

Parking Totals in North Barstow Area

The post office when torn down will provide an additional 100+ spaces.

Man Thinking - Closed Session Concerns

It should be noted that the total requirement is based on JAMF employment of 300. Actual employment when the company moves in is expected to be half of that or 150. Per Mr. Schaefer’s write-up, JAMF has requested 145 of the 220 at the time it moves in.

 Argument 2.  Aesthetics - the proposed ramp would be more aesthetically pleasing than surface parking.

 Response:  This is debatable.  The planned wall to wall buildings in the area is not pleasing.  Jamming a ramp in between the existing buildings and the proposed – “L-shaped” building (at the site of the current post office) at considerable cost would not add to the aesthetics.  A few benches and planters on the side walk area around the surface parking could very well be sufficient to make the area pleasant.

 Argument 3.  Environmental impact.

 Response:  With any situation, one must weigh the costs and benefits.  In an area with short summers and winter temperatures like Eau Claire, the “urban heat island” effect from asphalt is usually not deemed a major concern.  If it were, the city could construct an-all cement parking lot rather than asphalt.  Cement pavement reflectivity would be comparable to that of the cement parking structure.  Is it worth the extra cost?  Certainly, it will be less costly than building the $10.3 million structure.  As far as road waste, the only question is whether it will fall inside the ramp where it will need to be cleaned (at considerable cost) and disposed of versus the easier cleaning that can be affected on a flat outdoor surface.  The road waste will be falling off the vehicles regardless.  Note per Mr. Schaefer’s write-up, the ramp does not eliminate runoff but simply reduces it.  Is that reduction material?

 Argument 4.  Convenience of the Employees.

 Response:  Yes, covered parking has advantages in the winter when it snows, as the workers do not have to brush snow off their cars when they leave the office to return home.  Likewise it has advantages in the summer; employees have no need to place a shade over their windshields on the few hot sunny days.  One has to wonder why the RCU and JAMF workers are considered to be so special that the taxpayers of the City are expected to stand behind a $10.3 million bond (plus interest) to build a parking ramp to save them from these occasional efforts.  The city has not afforded similar consideration to its own employees nor other Eau Claire businesses, many of whom have far more employees and a greater financial impact on the city’s economy.

 Argument 5.  The ramp is a good investment.

a) New Property Taxes from the development of Block 7 (corner of Hobart and Wisconsin) and the Post Office more than offset the cost of the ramp.

b) There will be $500,000 of cost to develop additional surface parking as the current Post Office will need to be razed and the surface black topped.

c) The parking ramp is a profit center for the City at a $30 per month per week per space.

d) The City will enjoy additional revenue during the evenings and weekends by charging the public to use the ramps.

 Response:

a) The author begins his analysis by challenging the valuations used by the recently retired City Finance Director, Rebecca Noland.  He maintains that the assessed value of the hoped for building on Block 7 (corner of Hobart/Barstow and Wisconsin) should be at least $10 million and the smaller hoped for building at the site of the current Post Office will be at least $5 million rather than the $8.5 million and 2.5 million that Ms. Noland used, respectively in her figures.  That increases the valuation by $4 million. Regardless of the value selected, however, it is hard to justify building a $10.3 million parking ramp in order to secure property taxes on property valued at either $15 million or $11 million. Let’s put it in perspective:

City property taxes (applied at an annual rate of .8% on assessed value) will generate $120,000 per year on property assessed at $15 million.  The tax revenue of $120,000 divided by the city’s parking ramp investment ($10.3 million) results in a very small yield on the ramp of 1.2%, an 85-year payback.  If Ms. Noland’s figures are correct, the figure drops to $88,000 per year or .8% - that’s an even longer 114 year payback.  Either way, the City has a very poor return.  And keep in mind that, until the TIF is paid off (best case not until 2031 - 15 years from the date the ramp is scheduled for completion), the city generates no property tax on the new buildings (hoped to be built in 2018 and 2019), as all of the property taxes (including the school taxes) go to the bondholders.

Moreover, where will the employees from these new buildings park?  The plan is to place the ramp over RCU’s current parking lot (141 spaces). That means the parking ramp will be used as follows:

Spots Available for Employees of the New Buildings and the Public

Presumably at a combined value of $11 to $15 million, one would think the new buildings would require at least 250 spots (200 for the office building; 50 for the customers and employees in the L-shaped building).  There is nothing like this available in the new ramp or the new ramp and the railroad parking lot.

b) Given the fact that most of the utilities are in place and there is no need to dig underground parking, it seems doubtful that either the utilities for the surface parking ($50,000 for the ramp) or site work preparation ($150,000 for the ramp) would be this high.  Moreover, the proposed parking ramp would be placed over the existing surface parking owned by RCU and JAMF. There will be a charge for this land which has yet to be included in the ramp cost calculation.  Finally, the known costs incurred in 2013 to pave the Block 7 lot (corner of Barstow and Hobart) should be a reasonable guide to the cost to pave the post office area.  The Block 7 area is 27% larger than the post office, yet the total cost to grade, black top, and finance electronic gates totaled “only” $185,000.  Nevertheless, accepting the $500,000 figure results in a comparative cost of $10.3 million for the ramp versus $500,000 for the parking lot, an easy choice in terms of economics.

c) The analysis assumes that 500 spaces will be leased each year despite the plan to reserve the top floor (130 spaces of the 520 spaces – not possible given RCU and JAMF requirements) for the public and arrives at a sum of $192,000 per year.

For purposes of this analysis, accept the $192,000 figure.  First, that’s paltry considering the base investment ($10.3 million – a return of 1.9%).  Of greater concern, is that this amount is probably not adequate to cover even the operating costs of the facility.  Per Walker Parking Consultants – the same company which provided the parking concept designs for the city, the average break even cost for a average 1,000 stall ramp using a 25 year amortization is $150 per month.  If the capital costs are disregarded, the average unattended parking lot operating cost per year on 1,000 stall ramps is $380 per stall - $32.00 per month per stall, which equates to the planned monthly charges to RCU and JAMF.  Given the fact, however, that the planned ramp will provide 520 rather than 1,000 spots, the average cost will be far higher, as fixed monthly costs will be amortized over a lower base.  (See http://www.finance.mnscu.edu/facilities/studies/docs/cost_of_parking.pdf

Per the VenuWorks report, the rule of thumb for parking structures is that they should only be considered if land values are in excess of $1 million.  Click here to see the Table 4-4 from the relevant section of the report.  The value of the post office land, if one assumes that the building has zero value, is $197,000 per acre.  That is a long way from one million.

d) That assumption is highly doubtful. In fact if the parking solution is a paid ramp, the area businesses will probably lose customers. The City is unable to fill the 450-stall ramp by the hotel despite offering it for free (http://www.wqow.com/story/25686836/2014/06/03/solution-to-downtown-eau-claire-parking-being-discussed)

Nor is Eau Claire unique. Palo Alto reports similar issues with its ramps.  (http://www.paloaltoonline.com/news/2011/09/02/editorial-the-economics-of-downtown-parking)

As far as the Farmers Market, the planned ramp is a death knell.  How many people will be willing to pay to use a ramp to buy a few tomatoes and fresh vegetables?  In fact, given the planned distances, the limited, if any, parking available, and the general avoidance of ramps, how many would want to shop at the market even if the ramp were free?

The Farmers Market with its pretty park setting is currently a draw for out-of-town visitors.  The parking structure, however, is planned to be all but invisible from the main street (hidden by walls of buildings) and, as such, will be also be invisible to travelers (assuming they are willing to use a ramp and pay for the privilege), a loss of yet more customers for the market.