A proposal from the city manager to transfer $2.8mil from the city’s stabilization fund to the parking enterprise fund prompted much discussion from the city council at Tuesday night’s council meeting. The parking enterprise fund must be in balance before the tax rate can be set, and that fund is currently running a big deficit, hence the need to make the transfer now.
Before taking that vote (which passed), councilors pressed CFO Conor Baldwin and Parking Director Terry Ryan on what plans the city administration has to help bring the parking fund into financial balance. Baldwin said that the solution is to raise parking rates and to eliminate many of the discounts received by holders of parking passes. He said there are 5000 parking passes in circulation but only 370 of them pay the full rate. All others receive some kind of discount. These include discounts for the elderly and downtown residents, but also group discounts (usually involving businesses) and contracts with UMass Lowell and Middlesex Community College.
Baldwin concluded: If you raise the rate on all pass cards to $150 per month and eliminate all discounts, it would generate an additional $2mil to $3mil in revenue. That would cover the bond payments on the Hamilton Canal Garage which, because very few are parking there, isn’t generating much revenue. Once the Hamilton Garage fills up, there is the potential for even more revenue for the parking fund.
Baldwin didn’t say when he expected the Hamilton Canal Garage to fill up, or who would be parking there. One group that won’t be parking there are people coming to the Lowell Justice Center. Councilor Rita Mercier alluded to this in her remarks when she pointed out that the city conveyed a parcel right next to the courthouse to a private developer so that the developer could build a privately-owned garage on the lot. As Mercier put it, when someone has to go to the Justice Center, they will park in the adjacent private garage rather than at the city-owned garage that’s more distant.
Just how distant is the city’s Hamilton Canal garage from the Justice Center? I timed myself walking from the front door of the Justice Center to the southeast entrance of the parking garage (the one closest to the Justice Center). At a normal pace, it took me 4 minutes, 30 seconds to get there. But perception is reality and, in our culture, if you can’t park right door to your destination, the parking is too far away, even if it’s less than a five-minute walk.
Still, considering the financial problems facing the city’s Hamilton Canal garage, allowing a privately-owned garage that will syphon revenue from the city’s facility – most people don’t come to the Justice Center voluntarily; they have to be there, so they have to park somewhere – seems shortsighted.
The argument made in favor of conveying the lot to the private developer and allowing the private garage to be constructed was that it was an essential part of a larger package which included conveying two other nearby lots to the same developer who has promised to construct at least one new building, preferably one that mixes retail, commercial and residential, on one of those lots. The developer maintained that such a building would not be feasible without adjacent parking.
When this arose a year ago, the council voted unanimously to support it and even gave the developer a TIF (Tax Increment Financing agreement) on the garage. The TIF substantially reduces the property taxes that will be paid on this new private parking garage in exchange for the new jobs it will generate. Just how many jobs of what type will be created by a parking garage is unclear.
The private parking garage is still under construction so it has not yet diverted any Justice Center parking from the Hamilton Canal garage, but it seems inevitable that it will once it opens. If the developer follows through with a big new building that adds to the city’s tax base and jump starts other developments in the district, the fiscal hit to the Hamilton Canal garage’s finances perhaps will have been worth it. But we won’t know if that’s the case for a while.
Baldwin’s suggestion that parking garage pass card rates should be increased got some opposition from Councilor Wayne Jenness who represents the downtown district. He said that many who now live in downtown factored the cost of parking into their decision to live there. To suddenly raise the parking charge considerably would risk upending family finances, driving existing residents out, and making living in downtown less desirable. Jenness advocated raising the curbside rates substantially to make it more attractive for transient parkers to use the garages while keeping the cost of long-term garage parking low to make living in downtown more attractive.
When asked for ideas about increasing revenue, Parking Director Ryan mentioned two things: First was the need for new parking kiosks which would provide greater pricing flexibility. He used, for example, the ability to charge a higher “event rate” for curbside parking near the Lowell Memorial Auditorium or the Tsongas Arena when events are being held at those venues. He also mentioned the benefits of offering targeted discounts on parking garage rates to motivate people to park in some of the lesser used downtown garages rather than the ones that are always near capacity.
Pressed for when this new equipment will be installed, Ryan said the city is very close to finalizing a contract with the new vendor. (The contract is being reviewed and vetted by the Law and Purchasing Departments).
However, the parking rates are embedded in a city ordinance, so to gain the flexibility to set rates dynamically will require the city council to amend the ordinance. The city administration has not yet presented such a proposal to the council although one is supposedly under development.
Some councilors were skeptical that even these measures will solve the fiscal deficit of the parking enterprise fund and seemed willing to explore turning the city garages over to private owners.
Before the city can successfully address the Parking Enterprise Fund fiscal crisis, it should first answer the question, what’s the plan for downtown? Twenty years ago with the adoption of the Artist Live/Work zoning overlay district, it seemed that the city had committed to transforming downtown into a predominantly residential area with ancillary retail establishments. During the boom in housing prices in the early 2000s, converting office and mill buildings to residences made fiscal sense to developers, but the financial collapse of 2008 made residential conversions less attractive.
At that time, the city made an effort to substitute higher education-related development for private residences, but that was short-circuited when city councils of that period turned hostile towards UMass Lowell and the university turned inward.
Since then, the city has lacked a clear, cohesive strategy for downtown. Is it a residential neighborhood? A retail center? A business hub? What’s the big picture and what’s been done to get everyone to buy into that vision? If there is a comprehensive strategy, it’s not been effectively communicated. Instead, we tackle parking, homelessness, housing, public transportation, and many other things in isolation when they are all closely linked.
One positive development at the meeting came in the report of the Housing/Zoning Subcommittee. Committee co-chair Councilor John Drinkwater explained that there have been multiple motions from councilors aimed at encouraging more residential development in downtown. As a result of those motions, this subcommittee voted unanimously to eliminate two requirements that were thought to make downtown residential development more expensive and more difficult. The first was to eliminate all parking requirements for residential construction within downtown; the second was to eliminate the need for the developer of downtown residences to obtain a special permit. In almost all cases, the special permit requirements were waived by the applicable city board, but the act of having to go before the board in the first place tended to slow things down and make it more expensive. So doing away with that requirement should help streamline the process. These two proposals will now go to the full council for a vote.
This proposal seems like a step in the right direction. Housing is in short supply and the glory days of the downtown central business district will never return. It’s time to go all in on housing. Choosing that as a strategy has implications for what to do about parking, homelessness, and many other things.
Making a big strategic move like that does not happen immediately. That’s probably a good thing because the housing market is in the midst of a slowdown due to higher interest rates. But rates will drop, and the city should position itself to take advantage of the building boom that will accompany that.
The subcommittee voted to eliminate parking requirements for 10 units or less in the DMU zone. Why isn't it on Tuesday's agenda for a full council vote? Knowing what we now know about garage vacancies and debt service why not increase it to 15 or 20 units? We should also seriously consider extending the DMU zone to upper Merrimack and Appleton St.