The public will be paying $36 million to subsidize 600 underground parking spaces at Union Market. Many GGWash readers gave an earful to councilmembers who supported this financing. On Tuesday, Charles Allen (Ward 6) and Elissa Silverman (at large) introduced a bill to demand more transparency in deals like this which include parking.
The Union Market money is an example of a Tax Increment Financing (TIF) deal. In a TIF, the city gives a developer money to help cover the costs of a new project, and covers the cost with future tax revenue. If the funding is the only way for a development to happen, the city comes out ahead — something gets built and generates tax revenue which wouldn't exist otherwise. On the other hand, there's a danger that legislators offer a TIF to a development that would have happened anyway, and in those cases squander tax revenue the city would have gotten without a TIF.
It's common for projects with TIFs to include some underground parking, but for Union Market, that number was both broken out and quite large: $36 million for parking out of $82 million total. Proponents argued the complex needs parking to be a regional draw, but meanwhile a potential new Metro station entrance isn't funded and the TIF won't enhance other ways of getting to the area.
DC has no maximum limits in zoning on how much parking a development can include, but the argument goes, we don't need to set a maximum if the market forces are at work. Underground parking costs $30-60,000 per space. If a property owner overbuilds parking, it'll be expensive, so they have every incentive to make a judicious estimate of the true need.
But if they can just get the public to pay for parking, then there's no real downside to over-providing parking. Except there's a downside to the public. Besides spending money potentially unnecessarily, extra parking just creates an incentive for people to drive who might otherwise have walked, biked, taken a train, or ridden a bus, all modes which don't add to traffic and pollution.
Councilmembers David Grosso (at large) and Silverman tried to amend the Union Market TIF bill to require it pay for a new Metro entrance closer to Union Market and affordable housing. Other councilmembers defeated the amendment, including Kenyan McDuffie (Ward 5), whose ward includes Union Market, and Jack Evans (Ward 2), chairman of the finance committee. Charles Allen (Ward 6) also voted no, and wrote a detailed response to angry constituents (and Silverman responded).
Allen said that the council can't legally amend TIFs and funding the Metro entrance or affordable housing, per se, wasn't allowed. But, in the wake of the first vote, he wrote a bill to try to bring new transparency to this process around how much public money is going to pay for parking, whether that parking will add to traffic, and what measures are being taken to reduce car dependence.
Here's his summary of the bill (reformatted slightly):
This bill creates additional requirements for an application for Tax Increment Financing (TIF)—especially when revenue from the TIF will be used to build automobile parking. It also obligates the Chief Financial Officer (CFO) to consider this information when certifying a TIF, and obligates the Mayor to provide detailed information about public benefits included in the TIF when seeking Council approval.
When applying for a TIF, a developer would need to disclose to the CFO:
- the number of planned parking spaces in the development and how that number was determined,
- how many of those parking spaces will be paid for by TIF revenue,
- the impact the planned parking will have on vehicle trips within the TIF area, and
- why TIF revenue is needed to build parking.
Developers will also need to explain how the project fits the goals of the Comprehensive Plan, the Sustainable DC Plan, District Department of Transportation (DDOT) plans for the area, and any small area plans, design guidelines, or overlays. Finally, the developer will be required to include a transportation demand management plan in the TIF application.
When reviewing a TIF application, the CFO must consider the newly required information, and if an application does not comply, the developer will have 60 days to make changes. This bill would also add the Deputy Mayor for Planning and Economic Development (DMPED), the DDOT director, and the director of the Department of Energy and Environment to the list of agencies that the CFO will consult when evaluating a TIF application.
After the CFO approves an application, DMPED will prepare a “public benefits certification” that will include:
- an analysis of how the project is consistent with the Comprehensive Plan, the Sustainable DC Plan, and any relevant small area plans;
- the percentage of affordable housing included in the development and the level of Area Median Income that those units will be targeted to;
- the number of new jobs created, including whether the jobs are temporary or permanent and estimated wages, as well as commitments made to hiring D.C. residents;
- a description of non-automobile transit investments; and
- information about the impact planned parking will have on congestion and vehicle trips.
This report will also include a summary of which of these public benefits are already required by law or were part of a planned-unit development negotiation. Importantly, this report will accompany the approval resolution that the Mayor sends to the Council for approval of the TIF. The CFO’s certification of the TIF will also accompany the resolution.
The intent of the law is to ensure that developers are thinking about how new projects impact transportation in the District, and to bring more transparency to how TIF funding is used. This information will be clearly available to the Council when considering future TIF projects, and, as part of the record, will be available to the public.
I'll be asking experts in TIF financing for input on the details, but overall, this seems like a great idea. TIFs can go forward with parking, since sometimes that might really be necessary, but the developer has to justify in a transparent way why the parking is needed. Agencies like DDOT and DOEE, which want to reduce traffic and pollution, get to weigh in, and the project needs to include some Transportation Demand Management measures, which expand opportunities to get to and from the area without using a personal car.
In addition to Allen and Silverman, Councilmembers Anita Bonds (at large), Robert White (at large), and Chairman Phil Mendelson signed on as co-sponsors on the dais. The bill will go to the Committee on Finance and Revenue, which Evans (Ward 2) chairs.