TIF-Funded Repairs Complete at MAC Garage

The City-owned M.A.C. Avenue parking garage, located under the Marriott Hotel, has re-opened for business. The cost of repairs to the garage is being paid via property taxes effectively paid by the hotel, retail, and office space above the garage, through a tax-increment financing (TIF) scheme.

The structure had been closed since January of this year for interior structural repairs, renovations, and installation of new technology, such as barrier gates, computers, pay stations, a card system for hotel guests, improved interior lighting, and cameras, said Tim Dempsey, East Lansing’s Director of Planning, Building, and Development.

Below: The new entry/exit gates at the MAC garage.

The renovations, finished right about on schedule, stayed within the budget approved by City Council, Dempsey said. Some areas were more costly than originally expected, but a contingency amount was included in the budget and covered extra costs that arose during construction.

According to a 2015 Condition Appraisal by Carl Walker, a consulting firm that specializes in parking systems, previous repairs included patch and deck coats in 2001 and 2009. The Carl Walker report stated repair and maintenance of the supporting framework of the refurbished garage would be required to provide a service life of approximately 50 years.

Dempsey said ongoing maintenance is key to the 40-50-year life cycle of the current refurbishing project. “That is certainly our goal, but we have at times deferred maintenance due to budget challenges.”

The Carl Walker report showed that the M.A.C. parking structure, built in 1986 with a design in accordance with the current building codes at that time, was in relatively poor condition prior to the recent renovation. Field observations noted in the appraisal found concrete deterioration in structural slabs, waterproofing deterioration, peeling and/or worn handrails and wall coatings, stair tower deterioration, and steel beam deterioration.

In August 2016, Dempsey told the Lansing State Journal the lowest level of the parking structure had been closed since December 2015 due to falling concrete.

Below: The refurbished garage, now open.

An established TIF authority is allowed to capture property tax revenue from incremental increases in value in a determined area and spend some or all of the tax increment revenue to develop an area or finance a specific project.

As ELi reported, in 2014 City Council decided to extend the TIF plan at University Place (which includes the garage, hotel, retail and office space) from 30 years to a record-breaking 60 years in order to pay for the parking garage repairs, Maker space, public art, and business boosting.

In this case, the TIF is allowing the City to capture property tax revenues that would ordinarily go to other taxing jurisdictions, including LCC, CATA, and Ingham County. Those captured taxes will go specifically to the designated projects, including primarily the parking garage repairs, and not to the general fund of the City of East Lansing to be available for other uses.

The Council that approved the 30-year extension of the TIF for University Place in December 2014 included Nathan Triplett (Mayor), Diane Goddeeris (Mayor Pro Tem), Ruth Beier, Kathy Boyle, and Susan Woods. All voted in favor.

When asked why the City isn’t moving to sell the parking garage to the Marriott Hotel or some other entity, as ELi reported the City was considering doing in December 2015, Dempsey said, “The City Council evaluated this situation along with the land lease we hold. It was determined that at least in the short-term, the collective asset value was such that it was a better financial situation for the City to retain.”