Parking Deck Facts & Figures: The City Responds to Project Questions

With its mix of one-of-a-kind retail businesses, a strong office presence, and restaurants and nightlife, Ferndale is a flurry of activity. But one concern that has repeatedly been discussed by residents, businesses, and visitors alike is parking.

During high-traffic times, finding prime parking can be a struggle, and the City of Ferndale has recently proposed a comprehensive solution: a mixed-use parking garage located at the corner of W. Troy and Allen. Such a large project naturally creates opportunities, challenges, and questions, and the City’s Assistant Manager Joe Gacioch has answered several of the questions recently raised by residents.

When the City mentions commercial/office/retail, what exactly would the mix of commercial space be at this space? Would it be zoned for office, retail, or both?

The zoning for the W. Troy lot is classified as CBD, which can accommodate residential, office, or retail. The current floor plate for the street-level commercial spaces being proposed could accommodate about 16,500 square feet. We have presented the street-level as commercial space with the intention to engineer it in a versatile way that could be attractive to both future retail or office tenants.

The City’s intent for the development in this area is best described from the 2017 MLUP update: “Appropriate new development in mixed-use areas includes vertical mixed-use—such as ground-floor retail with residential units on the upper floors—multi-family housing types, live-work units, and small-scale retail, services, and offices that are compatible with adjacent residential uses. The intent of this district is to allow residents the ability to walk to neighborhood-serving services and amenities to meet their daily needs”.

How is the City exploring leasing/management of the commercial space? Will the City become its “landlord?”

The City has no intention of becoming a landlord. Below are a few examples of methods that the City could pursue. While none of these options make us a landlord, they DO empower us to retain control over what uses go in, so we can ensure that what comes is most in line with/beneficial to our vision as a community for downtown.

  • Extended ground lease: in this instance, the City would retain control as the owner of the land but we could provide a 30, 50, or 99 -year lease (typical examples) to develop the land in alignment to whatever fashion (use) that the City and the ground lessee agree upon. This could be an option for development of any residential space on the Allen Street border of the lot or any potential future office space that could sit on top of the parking garage, the most of which would be two floors of office.

  • Sale of air rights: IF the City were to develop two additional floors of office, the City could sell the air rights. This means that the City could sell the right to build or develop in the airspace above the parking deck property.

  • Sale of property for development: In this instance, the City would divest itself from ownership of a defined piece of a property to a private developer. The downside is that the City has less control/input on the development.

  • We could explore other public-private partnership (P3) opportunities as well to support the development of mixed use to complement the parking. At its core, the City understands that being a landlord is not a core competency of local government; however, providing opportunities to support job growth, community space, and residential and business needs is something at which we aim to excel.

Are parking revenues expected to be enough to pay for the garage? How much would annual bond payments be versus annual parking revenues? If parking revenue expectations are not met for any reason in the future, would the City have to use general fund revenue to make up for any parking revenue shortfalls?

The Auto Parking Fund is budgeted to absorb the annual debt payment toward the bond. Protecting the General Fund is a core guiding principle in considering a bond issuance. Considering that, our bond council has been asked to provide a variety of bond/debt service scenarios that include increments of $15 million, $18 million, and $20 million over terms of 20, 25, and 30 years. This will give us an annual debt service payment range to provide for flexibility in updating our budget projections.

How important is the leasing of commercial space to the financial success of this project? Is there an estimate on what revenue may be generated? How might that revenue compare to parking receipts?

We are working with Oakland County on some future tax projections based off comparable mixed use projects with similar square footage. The commercial space provides critical benefits to the project. Not only does it help create a more positive, active, and safer street experience, but the revenues from commercial rents can substantially support the long-term costs of the parking deck and greater parking system (this is in addition to their benefit to the City’s tax base).

A theoretical example for the commercial/retail finances:
The rents for the street-level commercial space are estimated to be roughly $35 per square foot (net) based on area market comps. $35 x 16,600 sqft is $5,810,000 in annual rents for a developer. Weigh this against our estimated construction costs at about $2 million. The result is a commercial space that makes financial sense for a private venture to pursue with the City using one of the options referenced above in question 2.

Any proceeds from commercial leasing/sales to a private developer would be committed toward the bond repayment. Ultimately, the commercial space provides a direct financial benefit by helping to subsidize the long-term costs of the deck while also growing the city’s tax base.

The City has estimated the multi-use parking deck would take 12-15 months to build. Is this timeline accurate? How does this compare to the timeline for a simple, pre-cast parking deck?

Our designers anticipate the timeline to construct four levels of parking, street-level retail, alley beautification, and a streetscape improvement with public spaces/event plaza to take between 12 and 15 months. The architects have stated that it is very possible to restore some level of parking access on the site as early as the 11-month mark. None of this is a guarantee, but we understand that a timely completion is of vital importance, and we would communicate that to the project team as a priority goal at the outset.

As of March 2017, our design team has estimated that a three-level single use deck would take between 8 and 10 months to construct. We recently reached out to the City of Rochester, and they have confirmed that their 300-space single-use parking garage (the west deck) took 35 weeks to construction, from groundbreaking to ribbon cutting. Every project is different, but that is a reasonable comparison.

Several people have referred to the smaller parking deck that Rochester constructed in just six months at $4.3 million. We have confirmed the details behind this project with their general contractor. They did indeed construct a 2-level platform that provided 233 parking spaces in six months; however, the conditions of the site were unique and not replicable in flat Ferndale. The specifications provided by Rochester are:

City of Rochester key detail: There is no ramp involved in this two-level parking deck. The second level is entered by a street at the top of a hill, the lower level is entered by a street at the bottom of the hill. The construction manager (CM) said they were fortunate to be able to take advantage of the existing slope to design a deck that did not require a ramp, which reduced costs and helped to compress the timeline to deliver these spaces. The CM said the lower level is comparable to a parking deck equivalent of having a walk-out basement.

In addition, Ferndale’s soil composition requires deep foundations no matter what or where we build. The Rochester sites have confirmed that each of their garages only required shallow foundations.

What is the reasoning, beyond leasing income, for having ground-level commercial space? How did street life and placemaking play a role in the design of the project?

Ground-level commercial space is a critical piece of any type of development that would be placed within a walkable, pedestrian-oriented area, like our downtown. Pedestrian-oriented spaces attract pedestrians not just because of their design, but because of the many businesses, restaurants, workplaces, and entertainment/ recreation destinations that they visit. The clustering of these destinations in places like our downtown creates the virtuous cycle of attracting more pedestrians, which in turn makes those businesses more viable by bringing them more customers. Commercial space provides goods and services that people need and consume on a regular basis, which means these spaces will generate a regular, steady flow of people that come for the goods and services provided. With a diverse cluster of commercial spaces, you strengthen the likelihood that at any given time throughout the day, a group of people will be coming to that cluster for one purpose or another. This phenomenon plays out in downtown Ferndale every day. If, however, developments go into an area like our downtown without ground-level commercial space to generate pedestrian activity, a blank, empty gap is created in the flow of street life for the entire length of the development, because people can’t or won’t go where there is nothing to go to. This gap essentially shuts off an entire portion of space to activity, making it unproductive, unsafe, and unattractive to be in or near. Ferndale so greatly recognizes the importance of avoiding these gaps in our downtown that our ordinance was written to require ground-level commercial space. It’s for these very practical reasons that ground-level commercial was factored into the design of the proposed deck.

The City is pleased to receive so much interest and engagement among the community regarding this parking deck, and we hope to keep everyone engaged with factual information and data. We invite residents to check out our Park Ferndale website, which is regularly updated with answers to major issues and questions. For additional information, please contact City’s Assistant Manager Joe Gacioch at parkferndale@ferndalemi.gov.