Are We Really Going To Do This?

$17 – 47M in TIF to redevelop the Government East Parking Ramp and the Municipal Building into a hotel and other uses? Should we spend $8M or $1.5M more in 2014? Or pause while we rethink this? Council votes tonight!

Alder David Ahrens has spent a lot of time (powerpoint without the video) working on this issue and has introduced an amendment to slow things down. The Amendment to the Capital Budget is co-sponsored by Alder Rummel and does the following:

Parking Utility / Project #2 – Judge Doyle Square Garage – Reduce the project funding in 2014 from $7,000,000 to $1,500,000.

Email from David Ahrens

From: “Ahrens, David”
Date: November 4, 2013 at 11:15:04 AM CST
To: All Alders , “Veldran, Lisa”
Subject: Capital budget amendment on Govt East (JDS) parking garage

Dear Colleague:
This letter is in support of the amendment to the Capital Budget which would reduce the appropriation for the Judge Doyle Square (JDS) garage- aka Government East- from $7 million to a reauthorization of $1.5 million.

Alder Rummel and I proposed this amendment for the following reasons:
• The Government East garage has about another ten years of service left in it. The attached minutes of the TPC (see pages 2-3) summarize the consultant engineer’s report indicating that the structure can continue to be safely operated through the decade with standard maintenance work of replacing surface concrete. Indeed, the proposed revised cost of planning and design alone (which increased from $1.5 million last year to $2 million this year) would cover the maintenance costs of keeping the garage in operation for the next 8-10 years.
• The proposed new garage presumes that an adjacent hotel/office/apartment complex will be constructed in tandem with it. No project has been identified, negotiated or approved. However, as decision-makers we have the risk of being whip-sawed into: a) approving the hotel/office/apartment complex because the garage is getting underway or b) approving a new garage to service a hotel/office/apartment complex. Clearly, while these are not entirely separate entities they are not the same and should be treated as such.
• If a hotel/office/apartment complex of some form is approved it is likely to require enormous financial support of the private parking structure. The extent of the cost (one primary proposal requires $30 million for their parking) is unknown and its potential effect on the fiscal balance of the parking utility could be destabilizing. This will result in higher parking fees and thus higher office rental costs, thus yet higher vacancy rates, etc.

In summary, I request your support for this amendment because the authorization of these significant funds is premature given the uncertainty in the structure, composition and costs of the related developments.

History
The TIF decision and land use would be done in the future, but this is the beginning of the end . . . the decision has been being quietly made decision, by decision . . . we have already budgeted the following in the past:
2011 – Parking Utility $13.2M

This project envisions an underground parking garage with up to 1,500 stalls to be built under the current Government East (GE) parking garage, PinckneySt., and the parking lot behind the Madison Municipal Building (MMB). Six hundred to 820 stalls will be financed by the Parking Utility to replace the GE ramp. Approximately 400 stalls will be needed for the high-speed passenger rail station, which will be built directly across Wilson St. behind the state Department of Administration building. Additional stalls will be necessary for a mixed-use redevelopment project above the parking structure that may include a hotel, public market, bike station, office space and/or retail. Planning funds of $1,2 million were included in 2010 and are reauthorized in 2011. Construction costs of $22.4 million for the replacement of GE parking stalls are included in 2011/12. The project will be built in phases, with the first phase– a parking structure behind the MMB– starting in 2011. The extent to which the new parking facility will be an automated facility will be determined by the Common Council and Transit and Parking Commission.

Additional planning and construction costs will be necessary to finance the parking stalls needed for the redevelopment project. The amounts and sources of those funds are yet to be determined. Additional planning funds for the redevelopment project are included in the Department of Planning and Community and Economic Development under the title of Public Market Square Planning.

Past Budgets
Planning and Development – 1.750M

The introduction of High-Speed Rail to Downtown in 2013 provides an extraordinary opportunity to fully integrate the planning for the Madison Municipal Building and Government East blocks with the High Speed Rail Station. This project will fund the preparation of a development plan, architecture and preliminary engineering for these two blocks resulting in a plan for the intermodal connections to the station and a mixed use redevelopment plan for the area.

Planning for the blocks will include a 1,500 car underground parking facility, the Madison Public Market, a bike station, linkages to other transportation modes, a potential hotel, and other air rights development. This work will also identify and evaluate redevelopment opportunities and needed infrastructure improvements in the blocks around the station area in order to fully leverage the Federal, State, and City investment in High Speed Rail. This project will provide the funds to cover these costs. Other funding includes $950,000 in funding from the City’s TIGER II Planning Grant application recently approved by the U.S. Department of Transportation and $400,000 in available TID proceeds. The Department of Planning and Community and Economic Development is authorized to execute the necessary agreements with the U.S. Department of Transportation to accept and execute the TIGER II Planning Grant.

2012 – Parking – $1.2M

This project envisions a 1400-stall City garage to replace the current Government East (GE) parking garage. It may be built in conjunction with a hotel, bike station and office tower and extend under Pinckney St. into the current Government East (GE) garage site. Planning will take place in 2012/13 costing $1.2M, with construction in 2013/15 costing $18.6M ($31K/space x 600 spaces, including land value). Phasing allows for the demolition of the GE garage in 2014. The GE garage is 53 years old and near the end of its useful life. Deferred maintenance cost estimates are rapidly escalating. The current maintenance schedule would keep the facility in operation only until 2015. The demolition cost estimate for the garage is $950,000. Funding is reauthorized from 2011. The extent to which the new parking facility will be an automated facility will be determined by the Common Council and Transit and Parking Commission.

and Planning and Development – Judge Doyle Square (Block 105) – 1.75M

This master planning project will fund a multi-phase transit-oriented development planning process on a City-owned 1.2 acre site on Block 105 in Downtown Madison (currently the Government East parking ramp), to be known as “JudgeDoyleSquare,” and a larger 12-block area of downtown, known as the Transit-Oriented Development Planning District (TOD Planning District). This project will involve the preparation of a development plan, architecture and preliminary engineering for Blocks 88 and 105, resulting in a plan for connections to a future intermodal convergence point and a mixed use redevelopment plan for the area. The Judge Doyle Square and TOD Planning District provides a unique opportunity for the integration and development of several blocks in downtown, presenting an innovative vision for revitalization of downtown Madison for years to come.

Planning for these blocks will include: a 1,435 stall underground parking ramp behind the Madison Municipal Building, under South Pinckney Street and under the current Government East Parking Ramp; an intermodal convergence point/facility, with inter-modal connections that could include South Pinckney Street right-of-way in conjunction with any future passenger (high speed or commuter) railroad station; the potential for a 275-room hotel on the Madison Municipal Building block (Block88); the feasibility evaluation of a Bicycle Center within the project; additional air rights development, including the potential for new City offices and additional commercial or residential development on the site; and, a strong pedestrian connection among the new underground ramp, the new hotel, new above-grade land uses and other downtown destinations.

The General Obligation borrowing is reauthorized from 2011, and is TID reimbursable. Other funding includes are authorization of $950,000 in Federal TIGER II grant funds, plus $400,000 in available TID 25 proceeds.

2013
Parking – $0
Planning and Development – $1,239,600

This project is funding a multi-year, multi-phased development planning process started in 2010 on a City owned 1.2 acre site on Block 105 in Downtown Madison (currently the location of the City’s Government East Parking Structure), known as Judge Doyle Square, and a larger 20 block area of Downtown known as the South Capitol Transit riented Planning District. The first phase of the project, completed in 2012, resulted in a report recommending a multi-year, multi-phased public-private mixed use development project for Bloc k88 (the Municipal Building block) and lock 105, requiring an RFP/RFQ process and the appointment of an ad-hoc committee to oversee the process. The City will also hire a hotel expert to update the hotel market data to assist with this process. This process will also include the issuance of an RFP for schematic design plans and cost estimates for the Madison Municipal Building renovation for continued use as City offices on the block. The next step will include the completion of the next phase of the TIGER II grant from the Federal Transit Administration, which will include the preparation of a master plan and detailed implementation recommendations for the South Capitol Transit Oriented Development Planning District. This project includes the preparation of preliminary architectural drawings and preliminary engineering for specific projects identified during the master planning process. Funding for this project includes reauthorization of the remaining portion of the TIGER II grant ($639,600) plus $600,000 in available TID 25 proceeds (of which $200,000 has been reauthorized from 2012).

2014
Parking – $7M

This project envisions a 1,300-stall garage to be built on the current Madison Municipal Building (MMB)/Government East garage site with approximately 600 stalls financed by the Parking Utility. It may be built in conjunction with a hotel, bike station and office tower and extend under Pinckney St. into the current Government East site. Planning will take place in 2014/15 costing approximately $2,000,000, with construction in 2014/17 costing an estimate $27,000,000 ($41,000/space x 600 stalls, including land value). Phasing allows for the demolition of the Government East garage in 2015/16. The Government East Garage is 55 years old and near the end of its useful life. The current maintenance schedule would keep the facility in operation for approximately 3 more years. The demolition cost estimate for the garage is $950,000. $1,500,000 is reauthorized from 2103.

Planning and Development – $990,000

This project is funding a multi-year, multi-phased development planning process started in 2010 on a City owned 1.2 acre site on Block 105 in Downtown Madison (currently the location of the City’s Government East Parking Structure), known as Judge Doyle Square, and a larger 20 block area of Downtown known as the South Capitol Transit Oriented Planning District. The first phase of the project, completed in 2012, resulted in a report recommending a multi-year, multi-phased public-private mixed use development project for Block 88 (the Municipal Building block) and Block 105, requiring an RFP/RFQ process and the appointment of an ad-hoc committee to oversee the process. This process will also include the issuance of an RFP for schematic design plans and cost estimates for the Madison Municipal Building renovation for continued use as City offices on the block. The next step will include the completion of the next phase of the TIGER II grant from the Federal Transit Administration, which will include the preparation of a master plan and detailed implementation recommendations for the South Capitol Transit Oriented Development Planning District. This project includes the preparation of preliminary architectural drawings and preliminary engineering for specific projects identified during the master planning process. Funding for this project includes reauthorization from 2013 of the remaining portion of the TIGER II grant ($440,000), and reauthorization of $550,000 in available TID 25 proceeds.

Not sure how much of that got spent. The projects were labeled Public Market, Judge Doyle Square and South Capitol TOD as well as Government East Parking Ramp. A lot has been in flux, but the committee has been meeting, has issued an RFQ and RFP and they have 2 proposals. A comparison of the proposals is here.

Questions we should be asking
– Do we really need a hotel with all the new hotel projects coming on line? (450 new rooms being constructed)
– Is the TIF really needed? (Remember they needed TIF for Edgewater, didn’t get it and the project is being built – one of the proposals is the same developer)
– What kind of community benefits will we get out of this? (24/7 restrooms, lockers, showers, etc?)
– What kind of jobs will be created?
– Did anyone in the budget listening sessions say they wanted a hotel downtown as a priority? Is this a priority?
– What will happen to the city offices that are there? Will replacing them cost more?
– Do we need all this parking?

There are also some more complicated financing decisions to keep your eye on?
– Will the TIF be paid off in 27 years (most are done in 12 years), or will we need a donor TIF to help pay for this?
– Will the property tax pay for the TIF?
– What good is room tax if it doesn’t go to the general fund – it doesn’t assist in helping bring down our taxes.
– How much are we paying George Austin to push this boondoggle?
– How much have we spent on planning?
– How much are the developers investing in this project?
– How many TIF policy exceptions will be needed for this?
– Are the projections of how many people will stay at the hotel realistic?
– Why are we leasing the ballroom back when they tell us to for $700,000 a year?

Wait, why do we need to do this? What are we getting out of it?

More info
Here’s the WORT A Public Affair show I did on Friday with Alder Ahrens, School Board Member TJ Mertz and activist Susan Pastor:

Here are nore materials to review . . . lots of info there. I’d read the staff report carefully. And remember the foreshadowing by Aaron Olver about TIF and Judge Doyle Square.