The Downtown Tax Increment Finance District plans to renegotiate leases with the owners of two large downtown garages near Sundance Square that have provided free public parking on nights and weekends for years.
Leases for more than 1,900 spaces expire Sept. 1. The owners have expressed an interest in renewing the leases, in place since 1999. But if deals aren’t reached, the days of free parking could be in jeopardy.
On Wednesday, TIF board members discussed whether they want to pursue renewing the leases on the current terms, or offer the garage owners a deal similar to Tarrant County, which received significantly less funding when it renewed last year.
At that time, the TIF board indicated it wanted to steer away from costly subsidies for parking garages and use its tax dollars instead on economic development projects.
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At issue now is the lease for 1,000 parking spaces in Sundance Square’s City Center garages, as well as 120 spaces for Bass Hall event staff. It has cost the TIF about $150,000 annually for the spaces.
The other lease is at the parking garage for 777 Main, owned by Cousins Properties, which has 700 spaces for Bass Hall patrons only. That lease has cost the TIF about $520,000 annually for the past 15 years.
Those payments have included money to help pay for garage and elevator improvements, which are now paid in full. The base rent in fiscal 2014 for the City Center garage was $55,417, and $306,308 for the garage at 777 Main.
Tarrant County agreed to reduced terms and renewed its free public parking lease for 250 parking spaces for $25,000 annually. The TIF had been paying about $400,000 annually on it.
If the board agrees to offer current terms, it will have to revisit its lease with Tarrant County.
The TIF spends about $3.4 million annually on parking leases at six garages. It began offering the leases as development incentives as a way to support the shops, restaurants and other entertainment venues downtown.
Board member Charles Boswell asked whether that money would now be better spent on development projects, which is the intended use of TIF dollars.
“What is this money buying us versus what we could do in other arenas,” Boswell said.
New TIF board member Johnny Campbell, president and CEO of Sundance Square, acknowledged that he cannot vote on the issue because his company has a garage, but told the board that without free parking, shops and restaurants in downtown would have a difficult time.
“The small retailers up and down Houston Street benefit,” he said. But, he added, he feels the TIF is overpaying for some of the leases.
“We ought to be looking at a spreadsheet ... so you know what the TIF bought,” Campbell said.
The board directed Jim Johnson, TIF director, to gather input from downtown merchants, property owners and the public on whether the TIF dollars should continue to pay for parking garage leases.
Johnson was directed to work out an arrangement with garage owners to continue operating under current lease terms for 30 to 60 days, giving the board time to address the issue. If the leases are not renewed, the garage owners would be free to charge, or not, for parking.
The TIF also pays for leases at The Tower, Chase Bank Building and City Place.
TIFs divert property taxes from new development into a special fund to pay for improvements inside a defined district.