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As questions continue to circulate regarding the fate of a plan to construct a three-story parking garage in downtown Edinburg, the city’s Economic Development Corporation reaffirmed its pledge to contribute $7 million to the project and not a dollar more.
“The EDC stands by its commitment to contribute $7 million towards a parking garage downtown,” corporation board President Veronica Gonzales said after members spent nearly three hours behind closed doors discussing the parking garage and other matters during a special meeting on Wednesday.
“Should the city wish to explore other means to increase the number of spaces, the EDC would be supportive, but cannot contribute any additional funds,” she added.
In August 2021, the city council and EDC approved a combined $10 million in debt to fund the construction of a three-story parking garage with about 250 to 275 spaces. The structure will also be augmented by revenue-generating retail spaces on the first floor.
At the time, the city council allocated a portion of some $21.49 million in certificates of obligation to go toward paying for the garage. The rest was earmarked for an amphitheater, a cultural arts center and other projects.
Meanwhile, the EDC approved a similar allocation as part of a series of sales tax revenue bonds it approved that same month.
However, the EDC’s decision on Monday comes in the wake of a needs assessment and economic feasibility study which showed that a three-story garage will not be enough to meet downtown parking needs over the next decade.
The city council commissioned the study after Mayor Ramiro Garza Jr. learned that no research on parking needs had been conducted prior to the council and EDC approving the debt.
“As I mentioned in the meeting, this needs assessment really needed to have been done before these bonds were issued. So, that’s the issue that we have. And that did not take place, and so we’re having to deal with this,” Garza told The Monitor on Friday.
The mayor was referring to a joint meeting held between the city council and EDC board last week.
Planned, paid for Edinburg parking garage not enough to meet projected need
There, they learned the downtown area will need approximately 750 parking spaces due to loss of existing spaces, as well as continued development of the area.
That includes the opening of those city-owned entertainment venues, the new Hidalgo County Courthouse, and the potential rerouting of the streets encircling courthouse square.
Edinburg officials also learned that it may cost nearly twice as much to meet the projected parking needs.
“If we accept the recommendations of the firm that was hired to do the assessment, we’re talking about the price rising to about $28 million,” Gonzales said.
However, according to the economic analysis produced by Saigiridhar “Sai” Mullapudi, an economic researcher with the University of Texas Rio Grande Valley, that $28.9 million figure represents the “total economic impact” that a parking garage that met the projected need for 750 spaces would have on the city.
“The construction cost for the parking garage is expected to be $19.2 million,” Mullapudi’s analysis stated.
The remainder of that economic impact would come from $8.2 million in labor income for the crews that build the garage, a projected $11.6 million that would be added to the state’s gross domestic product and $1 million in projected state and local tax revenues.
Mullapudi also estimated that 750-space garage could generate more than $1 million in revenue annually if it can achieve 65% occupancy at least five days a week.
That would depend on users paying at least $5 per day to park at a rate of $1 per hour.
Retail spaces on the first floor would generate additional revenue in the form of sales and property taxes.
Nonetheless, the mayor referred to those figures as “preliminary,” adding that officials need to do more research before deciding what to do.
“At this point, that’s what we need to decide first — to what level we can build the parking space,” Garza said.
And as part of that process, city leaders will need to choose whether they work with the funds they have to build what has already been planned, or whether options may be feasible, such as building additional parking structures at other locations.
“The county owns other land. The city owns other land. I think it’s something that we’re gonna need to continue to evaluate as the area continues to grow,” Garza said.
For the corporation, however, the board originally agreed to contribute $7 million to build a garage that would help recapture spaces lost to the construction of the new county courthouse.
Hidalgo County conveyed the site to the city for just that purpose, Gonzales explained.
“That was all very important to the EDC. And it would allow us to stay within the bond monies that were available,” she said.
She also explained the corporation’s skepticism about committing more money to the project.
“Unfortunately, the EDC does not have several more million dollars to spend. And at this time, has no guarantee that if it were to dedicate more millions of dollars, that the garage would be fully utilized,” Gonzales said.
