At its July 2, 2012 meeting, the board of the Ann Arbor Downtown Development Authority voted to renew its contract with Republic Parking for the management of operations for the city’s public parking system. The renewal is for five years through 2017, with an option to renew twice for a year each time. The renewal of the contract includes a five-year $1.5 million loan to the DDA from Republic Parking to cover upfront costs for installing new payment equipment.
The DDA has contracted with Republic Parking since 2001. The contract covers Republic’s costs, plus a $200,000 annual management incentive, of which $50,000 is discretionary. Over the last few years, the DDA board has consistently awarded $45,000 of that amount.
It’s the DDA that contracts with Republic, because the city of Ann Arbor and the DDA have an agreement under which the DDA assumes responsibility for managing the city’s public parking system. As part of that agreement, which was renegotiated in 2011, the city of Ann Arbor receives 17% of gross revenues from the public parking system. That amounts to roughly $3 million a year.
The new contract between the DDA and Republic Parking includes a provision under which Republic will acquire and install new automated payment equipment in some of the city’s parking structures. The new equipment will allow motorists to check themselves out and will allow the use of credit cards for payment. Structures where the equipment will be installed include the new underground “Library Lane” parking structure, which has a grand opening set for July 12. Fourth and Washington, Liberty Square, and possibly other structures will also have the automated payment equipment installed.
The purchase of the equipment will be made with a $1.5 million loan from Republic to the DDA – for a five-year period at 6% interest. There’s no penalty to the DDA for early repayment. The DDA is taking the approach of borrowing the money in order to conserve its fund balances in the context of completing construction on the new underground parking garage.
This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301, where the board held its annual meeting. A detailed report of the meeting will follow: [link]