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Companies report positive early results in parking cash-out strategy

BY Sunday, April 17, 2016 03:51pm

GRAND RAPIDS — A lack of on-site parking at Spectrum Health’s newest downtown office hasn’t created much in the way of headaches for the health care organization’s information technology department. 

The largest health care provider in West Michigan has slowly moved its I.T. workers into the mixed-use building at 25 Ottawa Ave. SW since last fall, with the largest group moving in on Feb. 1. 

The building now contains 396 staff members, as well as some contractors, according to Spectrum Health executives. 

Because the building has no on-site parking, Spectrum Health gives the workers at 25 Ottawa two options: They can purchase spots in city-owned ramps at a reduced rate, or the health care provider will give workers a $75 monthly stipend so they can come up with their own way to commute to work. Employees are free to use the stipend as they wish. 

As of February, the most recent month for which numbers were available, 26 percent of the workers at the location took advantage of the stipend — known as a parking cash-out strategy — to find “alternative” methods to get to work, said Kevin Judd, Spectrum Health’s manager of parking and transportation.

“The percentage has been pretty consistent,” Judd said, noting he didn’t estimate how many workers would use the program when the organization created it. “For a new program starting out for Spectrum Health and really for West Michigan to have that type of response … I’m very happy with that number.” 

He said he also was impressed by the number of employees who made use of the parking cash-out program despite the move to the facility taking place during the fall and winter.

“It’s easy to walk or ride your bike in the summer, but we were moving in the winter months,” he said.


That 25 percent of Spectrum Health employees have chosen alternative methods of commuting represents a significant opportunity to implement the program at a larger scale across the city, said Kris Larson, president and CEO of Downtown Grand Rapids Inc. (DGRI)

DGRI was among the agencies that helped Spectrum Health implement the parking cash-out program. 

If a quarter of the overall downtown workforce participated in a parking cash-out program, that could eliminate the need for 2,250 parking spaces and put more than $67 million into the pockets of downtown workers to find their own transportation, according to data supplied by Larson.

The figures assume a cost of $30,000 per parking space for the approximately 9,000-space parking system in Grand Rapids, including public-owned and on-street parking. 

“That’s a lot of money we could remove (for parking expenditures) if we could work with all employers to manage a similar uptake,” Larson said. “That would be just tremendous, not to mention the land use benefits by not having that much tax-exempt land.”

As this report went to press, movie theater operator Loeks Theaters Inc. and 616 Development LLC jointly announced plans for a new downtown mixed-use project that would be built over two surface parking lots south of Van Andel Arena. The project includes a long-awaited Celebration Cinemas movie theater and would feature a 900-spot parking deck, about 300 more spaces than currently exist on the site.

DGRI’s chief outcomes officer Andy Guy said in a statement that the parking deck included in the development accounts for “more and better parking” than the present options.  


As DGRI seeks to roll out a broader parking and mobility strategy, the organization that also administers the Downtown Development Authority may soon need to add to the parking supply in the central business district.

According to reports, the DDA and other city departments could consider appropriating funds for a new parking ramp as early as this summer. 

Data from the city’s parking services department show that additional supply is needed, at least in the downtown area. Monthly parking access cards issued by the city are only available for surface lots on the edges of the central business district, mostly north of I-196 or west of U.S. 131. Spaces are also available in the Government Center parking ramp and DeVos Place ramp, both of which are on the north end of the downtown business district.

Last October, when MiBiz first reported that Spectrum Health would be moving to 25 Ottawa, the Grand Rapids Parking Commission approved 306 access cards at four different ramps in the central business district. The cards went to Spectrum Health employees who opted to pay for their own parking spot rather than participate in the parking cash-out program. 

The city’s parking services department — now known as Mobile GR — tracks three different types of parking users: daily business people, residents and special events goers. 

According to Josh Naramore, Mobile GR’s manager, the downtown parking system is at about 90 percent capacity considering the three types of users combined.

“If you add the three areas together, it creates a complex parking situation,” Naramore said, adding that alternatives such as parking cash-out can help relieve stress on the system. “We’re hoping that more employers will have success like Spectrum.” 

To that end, Naramore said the city is in the “research stage” of exploring a cash-out system for its employees.

“What it looks like is yet to be determined,” he said, adding that parking is part of the contract with the city union employees. Any implementation of a cash-out program would need to take place via the collective bargaining process. 

If the city were to implement parking cash-out, it would join Spectrum Health, DGRI and the Grand Rapids Community Foundation in offering employees money in lieu of access to a dedicated parking spot. 


Spectrum Health’s Judd said he’s pleased with the overall percentage of employees opting to find alternative methods of transportation, but it’s still too early to gauge the overall effectiveness of the program. 

The organization is still studying whether parking cash-out could be implemented more broadly throughout Spectrum Health, which could move up to 500 I.T. employees total to its 80,000-square-foot space at 25 Ottawa. 

The health care provider intends to complete a system-wide employee survey in the coming months, he said.

“We’re going to need more data,” Judd said. “And we’re going to need the feedback of the staff before we start spreading this program out any further.” 

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