Plan expanded to $20 million project as part of new development next to Federal Building
by John Higgins, Beacon Journal staff writer
Akron City Council approved construction of a $20 million parking deck next to the Federal Building Monday night following afternoon debate about whether the city should continue to subsidize downtown parking.
The city originally budgeted about $12 million for the deck to serve existing businesses, primarily FirstEnergy. The city anticipated that the deck could be expanded in a second phase, pending a deal to lease part of the land fronting Main Street for a new office building.
In March, the city announced that developer Anthony Manna plans to construct an office building on part of that land. The deal, which is still being negotiated, requires the city to expand the deck to accommodate Manna and other tenants of the new building, which would sit above part of the deck.
The city will add about 350 spaces to the deck, for a total of about 1,100 spaces.
The city will borrow about $20 million instead of $12 million for the Dart Avenue Parking Deck, and that will mean paying higher annual debt service.
Annual debt service on a $12 million deck at 5 percent interest for 20 years would be about $963,000; a $20 million deck would cost about $1.6 million a year in debt service, according to city Treasurer John Tomei.
The difference -- about $640,000 a year -- will have to come out of the capital budget, said capital planning manager Charles Heimbaugh.
That budget pays for improvements to streets, bridges and sidewalks; parks and public facilities; water-and sewer-system upgrades; and economic development projects, including housing, industrial parks and aid to businesses locating or staying in Akron.
The city owns 10 parking decks. The newest one at High and Market streets adjacent to the new library was completed in 2004.
The outstanding debt on off-street parking since 1994 is $57.8 million, according to Tomei.
Off-street parking includes lots and parking decks, but most of the money is spent on parking decks. The outstanding debt covers new construction as well as significant repairs.
The city will pay about $5.6 million in debt service this year for off-street parking, not counting the $1.6 million that will be added for the Dart Avenue Deck.
The net operating revenue from the decks, which has been almost $1 million a year for the last few years, is applied to debt service.
Although the city raised monthly parking fees by 6 percent this year and by the same amount two years ago, operating revenue from the decks always will fall far short of the construction costs.
The city has built the decks to keep downtown businesses from fleeing to the suburbs, which can offer businesses plenty of parking because lots are much cheaper to build than decks. Surface lots cost about $2,000 per space, said engineering construction manager James Weber. The Dart Avenue Deck, by contrast, will cost about $18,000 per space.
Robert Bowman, deputy mayor for economic development, told the council's public works committee on Monday that providing that parking helps the city keep jobs downtown.
He said the city expects that 200 people already working in Akron for Manna and his potential tenants would move into the new office building. New jobs might be possible if Manna finds a buyer for the Carnegie Building on East Market Street, which Manna bought from the city in 2000.
Councilman John Conti, D-at-large, questioned whether the city should bear the entire burden for parking decks. The city also provides surface lots in neighborhood business districts, but the property owners typically pay for half of the construction and all of the maintenance.
``I think the time has come that we start assessing for these parking decks that are benefiting property owners,'' Conti said.
Bowman said that assessing downtown owners for the parking decks would reduce the incentives the city can offer to keep them downtown.
``That's the cost of maintaining businesses downtown in some cases,'' Bowman said.
``In my opinion, the costs have gotten too high,'' Conti said.
Bowman said he could provide council with a cost analysis.
Before the vote Monday night, Councilwoman Terry Albanese, D-6, warned against comparing big downtown decks to small neighborhood business lots because the lots mostly serve customers while the downtown decks primarily serve businesses and employees who pay city income tax.
``I think it's an unfair comparison,'' she said.
Conti voted with the majority for the deck, but he repeated his concerns about financing such projects with debt.
Bruce Kilby, D-2, was the lone vote against.
``I just don't think we need to be piling on debt at this point,'' he said. Afterward, he said that paying the extra debt service will mean scrimping in some other area of the capital budget, such as street resurfacing.
The project will start this month with construction of a retaining wall on Main Street. The site will be excavated down to 30 feet below Main Street to make the ground level with Dart Avenue.
The city expects deck construction to begin in September.
