Inside the Parking Deck Puzzle

Have you decided how you’re going to vote on the Traverse City, 500-space parking deck issue in August?
The problem with the vote—which will determine whether the City of Traverse City may borrow up to $16 million to build the parking deck—is that you can’t say exactly why you’re voting yes or no.
A “no” could register your displeasure with the politicking that shut out a late-show developer who said he could save several million dollars on the project. Or maybe you disliked the involvement of Senator Jason Allen or perhaps you think the planned development on Front Street is too big or that the west side of town doesn’t have a parking problem. Or even that the project is too risky for the city.
Or perhaps you plan to vote “yes” because you like the idea of transforming that part of town, the area between J Hamburg and the Traverse City Record-Eagle, and the large chunk of land across the street—they are not quite eyesores, but they could look a whole lot better. You feel that bringing in hundreds of new offices, stores, and condos to downtown would create a need for the new parking spaces and fresh shopping dollars, and now is the time to take advantage of the millions of dollars in state assistance.
For disclosure reasons, I’ll reveal now that I signed the petition for the August referendum because it seemed to me that the city officials rushed into a decision, but mostly because I’d like to explore that option of saving several million dollars.
On the other hand, I have no problems with tall buildings in Traverse City. My feeling is I’d rather see development inside the city limits where you can sip wine on a city sidewalk or push your toddler in a stroller. And I know from talking to shop owners, that it’s no picnic to be a retailer in Traverse City, especially during the winter months, and bolstering the number of actual working bodies downtown is a GOOD thing.
In any case, here’s an exploration of what happened and the implications of your August vote.

HOW WE GOT HERE
One of the key issues here is brownfield money, which goes back to the days of former Governor John Engler and his idea of encouraging development of “brownfields” or polluted sites with taxpayers’ money. The idea was that contaminated pieces of land would sit vacant forever without significant taxpayer moolah and a promise of no liability for the toxic sins committed by previous owners. Unfortunately, back in those days, the Department of Environmental Quality was not exactly rigorous in its review and we now have the nightmare of Petoskey’s Bay Harbor built on the former brownfield cement plant, and bleach-like toxins leaching into Lake Michigan, but that’s a book onto itself.
So the parking deck plan is (or was) this. The parking deck would cost the city about $14.65 million to build (a rough estimate), including $1.5 million to pay for the city’s proportional share of the land.
If the bonding gets approved in August and developer Michael Uzelak (pronounced Use-a-lak) goes through with his development, it would look like this. On the south side of West Front Street, basically across the street from the former Ford garage and the Traverse City Record Eagle, Uzelak plans to build an eight story building—retail stores on the first level, then three stories of public parking decks, and then four stories of condos with a view of the bay (67 condos in all). He also plans on underground parking for the condo residents. A huge project.
Across the street, between J Hamburg and the Traverse City Record-Eagle, he plans to build a three-story building—again, retail stores on the first floor and offices on the second and third stories. He’ll also build 75 private parking spaces that are below grade.
Almost half the cost of the public parking deck idea will be paid for by brownfield money that was earmarked for the west end of town. The remaining cost, theoretically, would be paid by the property taxes levied on the condos and retail stores. Instead of going directly to the school district, the taxes will go into a special TIF (Tax Increment Financing) fund that pays for the parking deck, another brownfield tax device. But the Traverse City schools won’t lose out. The district will still get its money, only from Lansing coffers.
SNOWDEN’S PLAN
Everything was looking good for Uzelak until another developer, Jerry Snowden, came along. Snowden bought a chunk of land in December across from the Traverse City State Bank with partners Pete Correia, who owns the Traverse City State Bank, and attorney Joe Quandt.
Their idea for a development was still in the concept stage, but they envisioned two phases. They would first build a seven-story building with retail shops on the first floor and six floors of office space. The second phase would involve more retail and residential lofts above, with shops and a sidewalk terrace along the Boardman River.
Snowden, the developer of the Radio Centre and the State Street brownstone project, also proposed to build a public parking deck in the middle of the development. He proposed a free-standing parking deck, which he said is 15% to 20% cheaper than a deck that has to support condos. He estimated that taxpayers would save $3 to $4 million. He later said—and some say much too late—that he would also have donated the land to the city (saving another $1.5 million that the city has already agreed to pay for Uzelak’s land). But his proposal for the deck never saw the public light of day. Why is that?
Snowden’s proposal was still in the concept stage, while Uzelak had met over the last couple years and more than a dozen times with a number of governmental bodies. He developed and refined his plan in compliance with guidelines set out by the Downtown Development Authority, headed by Bryan Crough, and later with City Manager Richard Lewis.
Snowden entered the picture in September, raising questions about Federated’s ability to deliver on the project. Quandt said that Federated seemed to have a lot of financial caveats and that Uzelak stated that he would have to pre-sell 40% to 45% of his 67 condo units in order to proceed. However, in a recent interview, Uzelak said that he doesn’t have to pre-sell that many, but does need to pre-sell a certain percentage and that’s normal.
“Presales are the least of my worries. That’s not a hurdle.”
The city has requested a loan commitment letter from Federated’s financial institution by May 15.

PRESSURE TO WITHDRAW
Snowden, Quandt and Correia came late to the game because they first wanted to buy their parcel, which they did in December. In late January, they floated their proposal.
“We knew the city was about to consider his (Uzelak’s) parking deck proposal, so we submitted a proposal,” Quandt said. “It said, ‘We don’t have the details, but before you contemplate approval, we would like the opportunity to participate.’ That letter was delivered to Bryan Crough and Richard Lewis. The very next day, we got a call, ‘Look, you guys ought to see and hear what’s going on with Uzelak,’ so Peter, Jerry and I met with Bryan and Richard. They unveiled their parking concept with Mike Uzelak.
“My position is and has been, I don’t care about building the parking structure. I just care there’s parking on the west side of town. There has to be a meaningful opportunity to park and shop and dine and circulate on the west side of town, and it’s not meaningful if people are going to have to walk five blocks from a parking dock.
“They rolled out the proposal, ‘This is what Mike has, what he has in play.’ I really pressed him on what guarantees Mike is going to need to build this.”
Quandt said he received satisfactory answers that the city would be firm in its financial expectations. “I said, ‘That’s fine with us, as long as we have our parking needs for the west side addressed. Maybe we don’t need a deck? I said, If we decided to do something later on, would you consider it. They said, ‘Sure.’”
Correia withdrew his letter a day after he submitted it and a media storm broke a month later (on February 26, two days before the commission considered and approved the Uzelak proposal). That’s when the Traverse City Record-Eagle reported that Senator Jason Allen, who received a $20,000 campaign donation from the CEO of Federated, advised Crough to have Snowden retract his letter.
Allen gave the Record-Eagle this very weird quote on the matter: “It is my understanding that I made the suggestion that it be withdrawn.” Senator Allen did not return phone calls for this article, but Uzelak said that people may have ended up with a “twisted, distorted picture.”
“I know people who have given donations to Jason Allen,” he said. “They are totally legal. They are supportive of him. I’m supportive of him. He’s done a great job as a state senator,” he said. “There’s nothing hidden. I think Jason Allen does anything he can for any developer he can, whether they give money to him or not.”

PROBLEMS
But it wasn’t just Allen who opposed the project. Crough and Lewis felt Snowden’s proposal was fraught with problems, including the fact that a portion of his property lay in a 100-year flood plain, that the first phase did not include residential units, and that taxes on its property value would not be enough to cover the cost of a 500-space deck. Uzelak’s parcel was also in a more walkable location for existing businesses.
Perhaps the biggest problem was that the bulk of the brownfield monies had already been attached to the Uzelak parcel. At best, it would take more time to get state approval to use the money for the Snowden parcel; at worst, the city could lose the funds, but that’s doubtful since the money was originally attached to Snowden’s land.
Lewis later wrote that Snowden’s move was intended to sabotage the Uzelak plan, and he also viewed it as a way to get public money to subsidize parking for a private development. But that doesn’t make complete sense, as Snowden would rent the same number of public parking lots whether Uzelak builds the deck or he does.
Snowden has said he was willing to make needed changes, that he could build the deck around the flood plain, and that the developers could have split the number of parking spaces. He was also disappointed that Lewis failed to publicly mention a proposal that could have saved millions on the parking deck, and did so only after the Record-Eagle article ran. Behind-the-scenes pressure prompted Snowden, Correia and Quandt to withdraw their proposal and to stay out. Lewis later publicly apologized to the city commission for not mentioning the project, although he did tell me that it wasn’t his responsibility to promote a proposal that the developer withdrew.
“I think it deserved the opportunity for review,” Quandt said. “I’m disappointed that it will never happen now. It deserves the opportunity to be looked at, but it looks like the City Commission has put all their eggs in the Uzelak basket.”

MILLIONS IN SAVINGS
In a recent interview, Uzelak, too, said that he wished that the City Commission had a chance to review Snowden’s proposal, because, in his opinion, there are so many problems with it.
Snowden, whose attorney advised him not to talk to the media, said he could only say that he presented definitive proof that a free-standing parking deck is always 15% to 20% less expensive to build than a structure that has to support condos, and would have saved taxpayers millions.
Interestingly, Quandt says he hopes that city residents approve the bonding.
“Quite frankly, it resolves our parking concerns. And it provides certainty to the community that there will be parking available for the west end of Front Street. I am an environmentalist at heart, and believe we can do so much better building up rather than out. If we can maximize our density downtown, there’s less likelihood that we’ll sprawl out.”
The uncertainty has caused Traverse City Light and Power to pull back on its plans to spend $880,000 to bury an electrical line on Snowden’s parcel. Quandt said they will pursue their development, but it will be a question of scale.
“If more parking is available, it will allow us to utilize more of the property from a development and walkable standpoint. With a deck, we would have had less run-off from surface parking into the river.”
Uzelak said he is proceeding with the development, although the conflict has caused a technology company last week to pull out of its plans to relocate its company to Traverse City with 80 employees. Uzelak said that if voters turn down the bond proposal, the parcels will be developed much differently-a drugstore, for example, has been suggested.

CHEAPER DECK?
An interesting twist arose in this. In interviews for this article, Uzelak and City Manager Richard Lewis both said that Federated will pay the extra construction costs that are required to hold up the several floors of condos (stronger concrete, plumbing, safety features, etc.). They said taxpayers will essentially pay the same as they would for a free-standing deck (Uzelak’s current very rough estimate is $20,000 to $22,000 per space; Snowden’s data showed that a free-standing parking space costs about $15,000).
Hey, that’s a surprise! I never heard that before. So I read the final agreement between Uzelak and the city and couldn’t find mention of this anywhere. I said so to Lewis, and he referred me to a sentence that the city will pay for “related common elements of the Project.” Pretty weak. But Uzelak is in obvious agreement and Lewis said that he would personally see to it that Federated picks up those additional costs. So hey, we may end up with a cheaper deck.
“We’ll argue about it—we’ll fight like hell for it,” Lewis said.


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