With the Public Ramps Bleeding Money, City Eliminates Free 2-Hour Parking Downtown

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Gary Caldwell for ELi

If you want to park for free in the gated lots and garages of downtown East Lansing, do it before the month ends. Starting July 1, there will be no more free two-hour parking.

A thirty-minute grace period will be instituted for drivers who want to dip downtown quickly. But if you hit the thirty-one minute mark, you’ll pay for the time starting when you entered.

City Council decided last night to make this change after hearing from City staff about the financial and physical state of the City’s parking system.

Director of Planning Tom Fehrenbach, whose job includes overseeing the parking system, summarized the conundrum: The City can offer free parking in the hope people will come downtown to patronize businesses. But doing so cuts into a system already losing money.

Fehrenbach told Council that from March through mid-June 2020, the parking system brought in $777,000 less in revenues than the same period last year. (In 2019, that period saw income of about $1.3 million and in 2020 it was down to about $520,000.)

Some of the money was lost from permit parkers who left town after MSU closed down campus.

Expenses were slashed by laying off workers, leaving a retirement-vacated job unfilled, and deferring projects and maintenance. But, Fehrenbach said, that approach could not go on forever as the system needs repairs, and putting them off ultimately costs more.

The expense reduction that has been used so far is “not really tenable,” Fehrenbach said. As an example of needs the system has faced, Fehrenbach said that the Charles Street Garage has needed replacing. (That’s the brick-faced garage over Buffalo Wild Wings and Sundance Jewelers.)

Alice Dreger for ELi

The Division Street ramp (left) and Charles Street ramp (right).

In an ominous opening, Fehrenbach referred to “uncertainty ahead” for “business districts” in American cities. He said he thought the two-hour free parking “has had a positive effect in terms of visits” to downtown. But it had been expensive for the City.

City staff are looking at ways to provide more quick-stop parking around town and considering other ways to lure people downtown.

At last night’s meeting, Council also approved a new lease agreement with the Metzger family for Lot 11, the Bailey Street surface parking lot behind Peanut Barrel. The City owns only 29 percent of that lot, with the Metzger Trust and Fabian Enterprises owning 71 percent. The current lease expires at the end of this month.

City staff didn’t want to sign up for a long-term lease without knowing what that parking lot is likely to bring in, given the new reality. So they arranged a short-term, fourteen-month lease.

The lease requires the owners to give 90 days’ notice if they want to terminate the lease “in the event of a pending sale or development.”

Also in parking system news, on Monday afternoon East Lansing’s Building Authority met in person in the police department’s conference room in the basement of City Hall. The group considered a request from Georgio’s Pizza for financial help and voted to let restaurants in City properties apply for emergency outdoor seating permission.

According to the City’s website, “The Building Authority acquires buildings for governmental use and oversees the payment of debt for those buildings.” State law requires such a body when there is debt on public properties, and Council appoints the members.

(Gary Caldwell for ELi)

Georgio’s is located on Charles Street in ground-floor retail space of the City’s Division Street parking structure – the “colorful parking ramp.” The restaurant has been closed since mid-March and Fehrenbach told the Building Authority it’s expected to reopen in “late July.”

The owners were asking the City to forgive about $11,000 in back payments and to reduce their rent, too. Fehrenbach said staff was trying “to balance the desire we have to support a long-term business in East Lansing” while also recognizing “the realities of the parking budget, which is ultimately where these funds go.”

Fehrenbach said the parking system had no money in reserve to cover this. “We actually owe these funds.”

He recommended a payment plan for the arrears and a six-month reduction of the rent by 25 percent, to $10 per square foot per year. The Building Authority unanimously voted to support that proposal. None of the members thought it was prudent to forgive the debt.

Building Authority Chair John Czarnecki told Fehrenbach that staff should ask to look at the books of Georgio’s, including looking at their federal tax returns, if they continue to ask for concessions. He also posited that this business and others might have insurance to deal with losses from the public health emergency.

Fehrenbach told the Building Authority there are “really challenging choices ahead” for the parking system. Czarnecki suggested that perhaps more students would drive down from the Northern Tier to use the parking garages in the fall out of fear of using CATA.

ELi reported last week that River Caddis Development, which has an exclusive agreement with the DDA on the Evergreen Ave. properties, wants the City to build a new parking ramp west of Abbot Road.

Raymond Holt for ELi

John McGraw of River Caddis Development at the Nov. 14, 2019, meeting of the DDA.

River Caddis had obtained the exclusive agreement based on a pitch to build an office building that included 250 interior parking spaces.

But since then, the developers have decided parking is too expensive to deal with, and the City should take on the expense of building it and managing it.

Note: When originally published, this article referred to a slide and comments from Fehrenbach indicating the Charles Street ramp replacement as an apparent example of future costs. It appears he may have been referring to prior replacement of that garage, so we have amended this article while we await clarification. The City’s debt on that ramp ends in 2025.

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