Construction on the improvements is on track for completion by the end of May, about four weeks ahead of schedule and $250,000 under budget.
But there have been potholes along the way.
Revenue that’s supposed to pay off the bonds — mostly from parking fees collected within the authority’s 10-block domain downtown — is falling short; parking revenues are $962,712 behind initial projections for the fiscal year ending June 30, according to the authority’s financial statements.
There are also unanticipated legal expenses related to a dispute over parking at the Marriott Hotel and miscellaneous costs, says Michael T. Laing, managing officer of ECI Development Services, which was hired by the authority to do the construction work and manage the parking lots.
The gap is forcing the authority to dip into its $2.6 million reserve fund, Laing says. Over the next two years, he projects that revenue shortages will drain the fund by about $2.3 million, leaving it with a balance of $340,838 in 2007.
Parking revenues are falling short largely because of an unexpected dip in special-events parking downtown, Laing says, along with a slowdown in daytime parking.
“The construction disruption has made it difficult to park here,” Laing says. He adds that the closing of the Carpenter Center to make way for a planned Performing Arts Center, along with a slowdown in traffic at the Richmond Coliseum, mostly because of renovations there, haven’t helped.
The initial projections of parking revenue came from a study by Desman Associates, a consultant hired by the CDA. Laing says the consultant didn’t anticipate the Carpenter Center’s closing, among other things. And, he says, some formulas used to make the projections were faulty.
“Do I think they did a great job? … No, I don’t,” Laing says.
The authority has anticipated the shortfall for some time. Last summer, Laing says ECI and the authority spotted the problem and revised their projections, making them more conservative. The new projections show that parking revenues will increase enough to start rebuilding the reserve fund by 2008.
William Harrell, the city’s new chief administrative officer who also serves as chairman of the CDA, says he’ll be watching the parking revenues carefully. He says he’s “hopeful” that the city won’t be required to kick in any money.
Before the bonds were issued in 2003, City Council agreed to back them up to $3 million a year in the case of a shortfall. The annual $4.97 million debt payments increase to $5.37 million in 2009. — Scott Bass
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