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State Purchase Of Hartford Parking Garage A Mixed Blessing

Hartford Courant Editorial

August 05, 2013

In the short term, the sale of the Morgan Street parking garage to the state looks like a good deal for Hartford. Though the deal is still being negotiated, details reported thus far indicate the city will receive a total of $26.2 million for an asset that is barely in the black.

So the city gets a much-needed influx of cash. But be careful what you wish for: The deal could raise long-term issues that could work against the city.

The eight-level, 2,290-space garage was part of the "Six Pillars" renewal project developed in the late 1990s. The garage opened in 2002 and had a 90 percent monthly occupancy when United Healthcare was the anchor tenant at the nearby Connecticut River Plaza complex. But when the insurer moved to CityPlace in 2010, the occupancy of the garage was cut nearly in half, The Courant reported.

The garage now has a monthly occupancy of 53 percent, up from 47 percent a year ago, and is expected to turn a meager profit of $362,340 this year.

In March, Gov. Dannel P. Malloy announced that the state intended to buy Connecticut River Plaza for $34.5 million and the 12-story tower at 55 Farmington Ave. for $18 million, and bring as many as 3,300 state employees to the properties in the next two years.

To augment the deal, the city agreed to sell the garage to the state for $23 million, about the value of the debt on the property, plus $3.2 million over four years for a 99-year lease for the land under the garage and rights to future development above it. The city council approved the deal in June.

Weird Law

Some accuse the governor of wastefully subsidizing the city by buying the garage. Not really. The consolidation of state workers into the two Hartford complexes is expected to save the state more than $200 million in lease and renovation costs to other aging state-owned buildings over the next 20 years.

But the state will have to give back some of that saving to buy the garage, in part because of an archaic state law. According a spokesman for the state Office of Policy and Management, when state employees are offered parking, as they generally are, it must by statute be free. Also, taking away free parking must be a subject of collective bargaining.

That's no longer the norm: Most major downtown employers charge for parking, which is an incentive to carpool or use transit. The state, which on the one hand is investing hundreds of millions of dollars into new transit systems, on the other hand has to provide its own workers with free parking.

Hopefully the workers coming to Hartford will receive incentives to use transit as well. Another 3,000 people driving by themselves into the city every day at rush hour is not a happy prospect.

The City

A potential long-term issue with the city giving up the garage is what happens if the city later decides it needs another garage. The replacement cost is likely to be much higher than the sale cost. The Morgan Street garage cost about $26 million to build a dozen years ago, the price kept down in part because the city owned the land.

No one knows if the city will need another garage because, despite the urging of the Hartford Parking Authority, the city has not done a study of its long-term parking needs.

So, with the state moving employees to Hartford, two big office complexes that brought in $2 million a year in property taxes will go off the tax rolls, the money to be partly replaced by payment-in-lieu-of-taxes, if that program remains intact. Plus, the city gives up an income-producing asset.

But the hope is that the state workers downtown will spur more private development. Utilizing the central location and built infrastructure of downtown Hartford is a positive policy step, for which the Malloy administration should be credited. Let's hope it works.