This week the Chapel Hill Town Council will hear an update on their biggest priority, in budgetary terms, a new 1100-space parking deck on East Rosemary Street. When the council voted to approve the deck in October 2020, the deck was expected to cost $33.2 million, already an increase over an earlier estimate of $28 million. While some in Chapel Hill questioned the wisdom of betting the town’s financial future on a parking deck, the council’s initial vote was 5-3.
On paper, the deck seemed like a good deal. The town estimated that the deck would “pay for itself” in five years, and serve as the cornerstone for a strategy to reinvigorate downtown by attracting businesses and residents who would take advantage of the new deck. With approximately $100 million of borrowing capacity, the town could take on this project in the short term while still having enough money to approve a municipal services center ($30 million) and other projects, like building more affordable housing and parks, down the road.
But since October 2020, rising construction costs and other factors have helped turn the parking deck from one of many town investments to possibly the only one, at least for now. By 2021, when the council broke ground on the deck and recorded a video promoting it, construction costs had already risen to almost $40 million, causing the town to explore bringing back parking minimums downtown so they could help pay for its construction.
Deck the halls
Which brings us to this week. The town recently discovered that its consultants underestimated the depth of the bedrock, which means that the town will have to borrow an additional $9 million, putting the total cost of the deck at more than $50 million.
As the draft presentation shows, this news means that the Town of Chapel Hill will be subsidizing parking downtown until 2036, a decade later than planned. Other projects will be delayed two to three years, and that’s if nothing else goes wrong.
What could the town do if it hadn’t bet everything on a parking deck? Here’s a few missed opportunities.
- At $2.5 million a mile for a concrete greenway, the town could have built a 20-mile, everywhere to everywhere greenway network, making it possible to safely get almost everywhere in Chapel Hill without driving.
- At construction costs of $200K for a 2BR apartment, the town could have built 250 homes for people earning less than $30,000 a year.
- With a $50 million parks bond, we could build splash pads throughout town, a new concrete skatepark, a playground that is accessible to all, and probably a few pickleball courts.
- With $50 million of debt capacity, Chapel Hill could make a strong case for getting the funds to construct the North South Bus Rapid Transit project, which would open up affordable housing with easy access to jobs throughout our community.
To pay for this deck, we need to build housing downtown
While we wish the town hadn’t decided to build this deck, they made the decision in 2020, and the sunk costs suggest that it’s getting built regardless, even if costs continue to go up.
The town needs to take an all hands on (the parking) deck approach to making sure that we don’t lose a generation of spending priorities to subsidize car storage. The council should approve nearby high-end projects like 101 E. Rosemary and 157 E. Rosemary, whose residents will likely rent space in the new deck. In addition, the town should seek to maximize parking revenue downtown, and ensure that landowners have an easy path to redevelop surface parking lots and vacant land. We can continue to refine our permit parking system, and expand permits to Northside, preventing people from taking spaces needed by residents.
We can solve our parking issue downtown, but it requires a new approach. Let’s hope that the cost escalations for this parking deck persuades the town to rethink its approach to parking.