BY LAYLI WHITE
Staff Writer
Republicans on the Red Bank Borough Council are warning that the financial impact of a proposed downtown parking garage could leave residents holding the bag for a $1 million annual deficit.
Both Councilwoman Jenni-fer Beck and Councilman John P. Curley said this week that the financial fallout of the garage — which would be the largest capital project ever undertaken by the borough –– could wreak havoc on future budgets.
After reviewing projections for the parking garage, the council members said in a letter to residents, “The garage itself will run a $1 million deficit per year unless it relies on the revenue from existing and new parking meters.
“The proposal is exactly the same one as was floated in 2001 except it is $3.2 million more expensive and does not address the previously raised issues.”
Both GOP council members said financial projections provided by the borough “overstate revenue assumptions while understating expenses.”
Beck and Curley faulted the borough for basing projections on a scenario that has:
• the garage 80 percent occupied for 360 days per year for the next 20 years;
• retail space rented 100 percent of the time during the same time frame;
• expenses increasing by only 4 percent per year over 20 years;
“Ultimately, if the garage is not self-sufficient,” the letter states, “residents bear the risk and will make up the difference and pay higher taxes.”
But Mayor Edward J. McKenna Jr. said Monday that he stands by his opinion that the parking garage will be a positive for taxpayers and residents of the borough.
The garage proposal was presented at the July 11 council meeting by Councilman Arthur Murphy, a member of the parking committee. The committee’s recommendation to deal with a perceived shortage of parking was for the borough to build a 570-space parking garage and add 278 more parking meters on residential streets, he told the council.
In addition to Murphy, council members Robert J. Bifani and Sharon Lee constitute the parking committee.
The projected cost of the garage, to be constructed on the site of the White Street lot, he said, is $11.6 million. The lot and meters would add 400 spaces in the downtown business district.
According to projections provided by Murphy, the garage would generate $500,000 in revenues during its first year, more than $1 million annually in revenues by 2011 and $37.8 million in revenues over the next 20 years.
Beck said the projections are “off-base,” and that the parking garage is entirely dependent on the installation of new parking meters which would be placed in residential areas.
“The bottom line,” said Beck in an interview Monday, “is that this garage is a million dollar loser.”
McKenna said that all projects of this nature are based on projections, and that even if the projections turn out to be only half of what is estimated, the borough will still be bringing in almost $1 million in surplus from the garage.
McKenna said that parking usage in the borough is higher than ever and that businesses and organizations that bring the most people into town are not leaving town anytime soon.
“Count Basie Theater isn’t going anywhere,” he said. “The Children’s Cultural Center just opened. Riverview still has a parking deficiency. To say that this garage will lose money is very short-sighted thinking. It’s penny-wise and dollar foolish.”
McKenna also said that the borough is looking at alternate plans for handling parking in town while the White Street lot is unavailable due to the construction.
“We will not put one shovel in the ground until that issue is addressed,” he said.
Beck said that the only way the garage would be sustainable is with the installation of the new meters, and without that, the borough is put into a “financially precarious situation.”
“The mayor has heralded the garage as a huge windfall for the borough,” said Beck. “That’s not true. The meters are a huge windfall for the borough.
“Our residents are already furious about the existing meters.”
She said that if the revenues from the parking meters are removed from the equation, the garage will not pay for itself, and borough taxpayers will be responsible for paying back the $11.6 million bond.
“Taxpayers don’t want to bear the risk of this project,” said Beck, “and it is a loser.”
McKenna said in an interview earlier this week, that he resents the “misinformation that is being spread by the opposition.”
“The taxpayers will not be paying for this garage,” he said. “This is effectively the equivalent of a revenue bond. The cost of borrowing will be paid directly by the Parking Utility.”
McKenna also said that the parking garage will give the borough the “economic ability to demand less from the taxpayers.”
The proposed garage would have three levels, with street-level retail spaces.
It is essentially the same proposal that was put forth in 2001 and opposed by residents who did not want to pay for the garage.
The Beck/Curley letter also reminds residents that when Borough Hall was renovated, the projected cost was $1.8 million, but the project actually ended up costing $6 million.
McKenna recalled that when he became mayor in 1991, 40 percent of the downtown was boarded up, and there was still a 1,000 parking space deficiency in the downtown.
“Guess how many parking deficiencies there are now,” McKenna said. “This isn’t the end answer, but it’s a huge improvement and a huge revenue source for the town.”
At the July 11 meeting, McKenna turned down Curley’s request for a public referendum on the garage, a move that sparked outrage among some residents.
This week, McKenna said he understands that there is always going to be some opposition.
“People don’t like change,” he said, “but we’re talking about the economic future of the town. It has to do with residents, not with businesses.
Curley said that if McKenna and the rest of the council refuse to listen to residents’ on-going concerns about a parking garage in the downtown, they should resign from office.
“I’m getting telephone calls left and right,” he said. “and people are really concerned.”
Beck said that the parking committee has not accounted for all the expenses that the garage will incur.
“According to the numbers presented, in 2026, with the garage being open 24 hours a day at 80 percent capacity for 360 days,” said Beck, “they are still counting only two people to run the garage.”
“If any little thing goes wrong,” said Beck this week, “it could be in the red in a heart- beat.”
Beck said that she sees two main problems with building the parking garage –– the financial risk involved and the location in an already congested area.
In addition to the parking garage and the additional 278 parking meters, the parking committee also recommended doubling the rates for meters from fifty cents per hour to $1 per hour.
Rates for the meters, parking permits and for the proposed garage will increase every five years, according to the proposed ordinance.
The reason for pursuing the additional source of revenue, according to the committee’s report, is to ensure that the borough’s Parking Utility is self-liquidating, which is a problem that the borough recently dealt with concerning the Water and Sewer Utility.
In this year’s budget, $200,000 from the parking meter revenue was used to pay off some of the debt the water utility had incurred over the past few years.
The council expects to have an ordinance concerning the parking garage and other changes ready for introduction at the July 25 meeting at borough hall at 7:30 p.m.