Chapel Hill losing money on 140 West deck

Revenue from the 140 West development’s parking garage is falling short of projections — forcing the town to consider using money from its general fund or increasing fees to cover the difference.

When the Chapel Hill Town Council approved the parking garage in 2008, the building’s tax value was estimated at $75 million. When the garage opened in April 2013, the assessed value had dropped to $60.2 million.

Ken Pennoyer, business management director for the town, said this difference is due to an estimation error made before the fiscal crisis hit.

Pennoyer said the big issue is not the differences in tax assessment, but the difference in expected revenue earned from the parking garage.

“The parking revenue supports the debt service on the garage itself,” he said. “We borrowed money in order to pay for the structure. Part of the support of paying it back was the revenue, and because that’s lower than expected, they haven’t matched up yet.”

Pennoyer said a dip in revenues was expected when the original parking lot that occupied that space was closed. But use of the new garage has been even less than anticipated, and town officials are working to figure out how to cover the loss.

“The parking fund has some funds that can be used, but most likely they’re going to have to transfer funds from the general fund or possibly increase fees or a combination of both,” he said.

Parking at 140 West is currently $1 per hour, 50 cents cheaper than parking on the street.

Orange County resident Ginny D’Ercole said she regularly shops in Chapel Hill but has only parked at 140 West once and was very unhappy.

“It was so dark, and there were no people around,” she said. “I’ll never park there again because I felt so uncomfortable.”

Pennoyer said surface parking lots tend to be more popular than underground parking garages.

“People have a preference for parking in daylight,” he said. “It’s going to take a little while to adjust that behavior, and people are not coming back as quickly as anticipated.”

D’Ercole wrote a letter to the town council giving her account of why she thinks the garage is so unpopular. She received a response from Chapel Hill Police Department Chief Chris Blue who said D’Ercole is not the only resident to complain about the deck’s poor lighting.

“We’ve made some immediate fixes to the lighting,” he said in an interview. “We’re looking at some longer-term solutions to make it even brighter.”

Blue said there is a security guard that patrols the plaza and police officers that periodically patrol the deck. The police department hasn’t had any significant incidents in the garage.

“It is a safe environment, but we are certainly interested in making it feel safer,” he said. “The more people who use the garage, the safer it becomes.”

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