The Parking Deck Debate, Bryan Crough Pro

July 26, 2006

PRO: Deck needed for downtown‘s future

By Bryan Crough

In the early 1990s we made a startling observation. Over a 60-year period, with all of the massive growth in our area, downtown Traverse City was disappearing... right before our eyes. Over time, fires had reduced four- and five-story buildings to one or two stories, and with considerable dedication, many buildings had disappeared completely, on purpose, to make way for parking lots. In fact, we estimated that more than 50% of our downtown was gone! And parking lots, producing little or no tax base, were lining the banks of the Boardman River throughout downtown.
At a time when everyone recognized the need for greater density in the center part of our City to keep our residential areas strong and our tax base less diffused, we were losing the battle. Malls and sprawl were ringing the City and the core was threatened.
An intense planning effort identified the need to focus on making better use of land by eliminating surface parking in favor of parking structures. We also recognized that our pedestrian environment and connectivity were threatened by these surface lots. Parking decks fronting our streets would not improve that situation and so our strategy focused on fronting decks, wherever possible, with retail or other uses.
Tax Increment Financing provided the development tool to make this happen. Getting rid of parking lots, encouraging new private development, and capturing the new taxes on that development to pay for the parking became the plan.
The Radio Center buildings and the Hardy Parking deck were our first steps. With voter approval, the City borrowed $12 million to build the deck, and pledged the increased tax revenues from the Radio Center buildings to pay off the bond issue. The strategy worked... the new development proved more than enough to pay off the bonds, and the deck not only replaced an ugly parking lot, but later led to the elimination of an additional lot at Boardman and State for new residential development.
The plan encouraged a similar approach on West Front Street. Specifically, we wanted to locate a parking deck away from the river, allowing for the re-development of all of the asphalt lining the Boardman River. The site selected in the Tax Increment Financing Plan in 1997 is the site of the West Front Street Development. In fact, after working to develop the Brownfield Redevelopment Plan for that area, (and along the way securing over $6 million in state funding to pay for public improvements,) we were able to help secure a new owner for the property and assist in seeing the development we envisioned come true.
Federated Properties gained control of the parcels we had identified for re-development and using our guidelines, City Master Plan and Brownfield Redevelopment Plan, put together the project we had envisioned many years before. Retail on the ground floor, public parking to spur the redevelopment of the other parcels around the river, and a strong residential component for downtown... that was the vision, and Federated had control of the property and was willing to go through a difficult, arduous process of seeking agreements to make it happen. Any developer was welcome to buy those parcels. Federated did.
The good news is that this project is only the first in many we believe will occur in this area of downtown. A developer has obvious interest in seeing the used car lot put into a mixture of residential and office, including a bank. Federated Properties already owns the GT Auto property on the north side of the street and has received approval for a mixed use development there. Someday, the parking lot behind the Post Office will become the permanent home of the Children’s Museum, and certainly other properties on State Street will be re-developed once public parking is available.


Pro: Bryan Crough

There have been a number of misconceptions thrown out by the opponents of this project, who, quite frankly, are afraid of change. The reality is this: the Downtown Development Authority Board of Directors, the Traverse City Planning Commission, the Traverse City City Commission, the Grand Traverse County Brownfield Redevelopment Authority, the Grand Traverse County Board of Commissioners and three state agencies under two administrations representing both parties have endorsed this effort. Public meetings, too numerous to mention, have been held in developing the plans, and now in implementation.
We borrowed over $12 million for the Hardy Parking Deck and have seen the positive change it has brought to the eastern part of downtown. For ONE HALF of that amount, we can see dramatic improvement to the west end of downtown.
We have a great downtown...but it is only as good as its TOTAL experience... to have contaminated property along the river, abandoned buildings, and acres of asphalt is not in ANY of our best interests. We deserve better and on August 8 we can have the kind of change we deserve.
Pro: Bryan Crough

There have been a number of misconceptions thrown out by the opponents of this project, who, quite frankly, are afraid of change. The reality is this: the Downtown Development Authority Board of Directors, the Traverse City Planning Commission, the Traverse City City Commission, the Grand Traverse County Brownfield Redevelopment Authority, the Grand Traverse County Board of Commissioners and three state agencies under two administrations representing both parties have endorsed this effort. Public meetings, too numerous to mention, have been held in developing the plans, and now in implementation.
We borrowed over $12 million for the Hardy Parking Deck and have seen the positive change it has brought to the eastern part of downtown. For ONE HALF of that amount, we can see dramatic improvement to the west end of downtown.
We have a great downtown...but it is only as good as its TOTAL experience... to have contaminated property along the river, abandoned buildings, and acres of asphalt is not in ANY of our best interests. We deserve better and on August 8 we can have the kind of change we deserve.

Bryan Crough is executive director of the Traverse City Downtown Development Authority, a position he has held since 1990. He was twice elected to the city commission and served as mayor of Traverse City in 1987-88.

Bryan Crough is executive director of the Traverse City Downtown Development Authority, a position he has held since 1990. He was twice elected to the city commission and served as mayor of Traverse City in 1987-88.


Con: Grant Parsons

satisfy the unpaid balance owed on the City bonds.
_______ (True or False) Despite what the Agreement says, the developer will not mark any documents “confidential,”and will authorize the City to show all documents.
_______ (True or False) Despite what the Agreement says, if the developer bids $16 million but manages to build the deck for $12 million, the developer will give the City back the $4 million savings instead of pocketing $4 million free-and-clear.
_______ (True or False) Despite what the Agreement says, if the developer changes the “mix or configuration” of the project, those changes will be considered “material” (substantial) and will be submitted for Planning Department approval, like every other developer does.
_______ (True or False) The developer will seek competitive bids.
_______ (True or False) The warranty deed will not limit the use of the deck as public parking to 23 years.
_______ (True or False) (EXTRA CREDIT) The developer made a $32,000 political contribution related to this project.

The terms of an Agreement cannot be “explained away” by one party; it takes both sides. If you seek “explanations,” remember, “It’s the developer, stupid!” And don’t be surprised if there’s no free lunch.

Attorney Grant Parsons has a long track record of speaking out about how Traverse City is developed.


Con: Guaranteeing a $16 million free lunch
Con: Guaranteeing a $16 million free lunch

By Grant Parsons

The ink is hardly dry on the controversial Uzelac parking deck development agreement, and city officials are scrambling to “explain” some key nasty-appearing terms.
The nastiest of all is the “$16 million bond” term (also known as the “$12.9 bond” term or, on especially good days, the “$7.5 million bond” term) which indebts City residents to issue and pay back bonds to underwrite the deck. Then there’s the nasty “secrecy” term that prevents citizens from viewing public documents. And then there’s the nasty “get out of jail free” term that allows the developer to make huge design changes to the “mix or configuration” of the 100 foot-high project, without getting Traverse City Planning Department approval.
There are other nasties, as well. To say they are troublesome is to understate the magnitude of the risks. The nasties in this agreement pose truly large risks.
But wait! Good news! Suddenly, as the August 8 referendum approaches, there is an evolution of “city explanations” for each nasty term. The best, broadest “city explanation” of a term is the one about the money – “this is not going to cost City residents anything – this is a free lunch!” Except for the $200,000 the City already fronted for the designs. And except for what happens in the event revenue projections fall short – leaving residents on the hook for between $7.5 and $16 million.
Listening to a couple of well-intentioned city officials “explain” the “real” meaning of the intricate 31-page Development Agreement (and 18 pages of exhibits) drafted by A Big City Developer (ABCD) is wonderful stuff. It’s wonderful – I would, in a weak moment, say reassuring – to find there are still such positive-thinking, wishful folks in the world.
But for an attorney, like myself, the wonder and reassurance fades as I look at the written words crafted by the developer. There the words are – black and white. What if the developer really means what is written there? Is it possible the developer actually expects the City to stick with the nasty terms? Heavens ... it dawns on me that maybe the City officials cannot really explain the developer’s words away. Maybe the “city explanations” are just wishful thinking.
Maybe there’s no $16 million free lunch.
It occurs to me that the folks doing the “explaining” are probably not the folks we should be worried about. Richard Lewis and Bryan Crough are not the ones who are likely to cram down our throats the Development Agreement nasties.
“It’s the developer, stupid!” James Carville would say. It’s Uzelac, ‘A Big City Developer‘ himself, who we should ask to say whether he’s really okay with the “city explanations”. If he guarantees in writing that he’ll actually accept the “explanations,” then maybe we can stop worrying about the nasty terms.
So I have drafted a simple true-or-false test – I call it the “Developer’s Guarantee Test” -- that can be taken by Mr. Uzelac. Each question states a “city explanation,” and Mr. Uzelac answers it “True” (meaning he agrees with the “city explanation”) or “False” (meaning he plans to stick with the Development Agreement wording).
A total score of 9 “True” – signed by Mr. Uzelac and/or A Big City Developer in ink, and filed at the “Northern Express” by midnight of August 7 – is required to win City voters’ approval in the August 8 referendum:

_______ (True or False) The parking deck and improvements will not cost $16 million as the Agreement indicates.
_______ (True or False) The Agreement has not already cost City taxpayers $200,000.
_______ (True or False) This really is a free lunch for City taxpayers, so if revenues from the project fall short, the Developer will satisfy the unpaid balance owed on the City bonds.
_______ (True or False) This really is a free lunch for City taxpayers, so if revenues from the project fall short, the developer will satisfy the unpaid balance owed on the City bonds.
_______ (True or False) Despite what the Agreement says, the developer will not mark any documents “confidential”, and will authorize the City to show all documents.
_______ (True or False) Despite what the Agreement says, the City is allowed to wait for the design to be completed before having to agree to a price -- $16 million, $12.9 million, whatever – instead of having to agree based on only 30% of the design.

Con: Grant Parsons

satisfy the unpaid balance owed on the City bonds.
_______ (True or False) Despite what the Agreement says, the developer will not mark any documents “confidential,”and will authorize the City to show all documents.
_______ (True or False) Despite what the Agreement says, if the developer bids $16 million but manages to build the deck for $12 million, the developer will give the City back the $4 million savings instead of pocketing $4 million free-and-clear.
_______ (True or False) Despite what the Agreement says, if the developer changes the “mix or configuration” of the project, those changes will be considered “material” (substantial) and will be submitted for Planning Department approval, like every other developer does.
_______ (True or False) The developer will seek competitive bids.
_______ (True or False) The warranty deed will not limit the use of the deck as public parking to 23 years.
_______ (True or False) (EXTRA CREDIT) The developer made a $32,000 political contribution related to this project.

The terms of an Agreement cannot be “explained away” by one party; it takes both sides. If you seek “explanations,” remember, “It’s the developer, stupid!” And don’t be surprised if there’s no free lunch.

Attorney Grant Parsons has a long track record of speaking out about how Traverse City is developed.