Here is another one of those stories about absurd parking subsidies. The city of Madison, WI has several parking garages that are functionally obsolete. The city wants to replace these facilities with new underground parking — and use the land above for new development.
In theory, that is not a bad idea. It frees up land for new infill development. The problem is that underground parking is ludicrously expensive. So the city is proposing a change in state law that would allow the use of tax-increment financing to fund it:
Under TIF, the city freezes the value of property in an area and uses new tax revenue there to support private development and public infrastructure. After loans and debt are repaid, all value is fully returned to the tax rolls.
In the early 1980s, the Legislature found TIF inappropriate for large public projects that rely on user fees such as sewage and water facilities. Madison can’t use TIF for municipal parking structures because its parking utility, created in the 1940s, has relied on user fees and revenue bonds to build structures.
Now, the city is seeking funding options to help pay for public parking at Judge Doyle Square and parking garages Downtown that must be replaced in coming years and decades. Being able to use TIF would make it more feasible to put parking underground and attract private development and private tax base on prime real estate above it, city officials said.
Putting parking underground can increase the cost of a garage by 50 to 100 percent, city Parking Operations manager Thomas Woznick said.
In other words, the city would subsidize the facilities instead of charging users the market rate. The development would receive other taxpayer giveaways as well:
The city is considering investing a record amount of public money into the project, which has evolved from a plan to replace the crumbling Government East parking ramp at Pinckney and Doty streets into a $160-million or more multi-phased effort including a luxury hotel, new office space and market rate housing.
First-term east-side Ald. David Ahrens has emerged as the most outspoken leader of the opposition, questioning the need for a new hotel that backers say will help bring more business to the city-owned Monona Terrace Convention Center.
Last month, Ahrens brought nationally known convention business critic Heywood Sanders, a professor of public administration at the University of Texas-San Antonio, to Madison for a public discussion on the project.
And first-term southeast side Ald. Denise DeMarb, who recently proposed an open meeting of the full City Council to discuss the project, says she has some serious concerns about a potential $50 million or more in tax incremental financing or other public subsidy.
“This is a huge project, with potentially a lot of taxpayer money going into it and that is something I take very seriously,” says DeMarb, the former finance director at Trek Bicycle Corp.