Council Proposes to Provide Additional Funding for the Bethesda Market Park

At its April 10 meeting, the Town Council endorsed a draft plan to provide additional funding for the Bethesda Market Park. This is an important matter for the Town, and the Council would like to explain to residents the details of the proposal and its conditions. The development of this plan has benefited from consultations with the Town’s Long-Range Planning Committee.   

Below is a summary of the proposal followed by a full presentation of the funding plan, including background and factors that the Council has considered. 

Summary

-- The Town Council proposes to provide additional funds to the Bethesda Market Park project to maintain the quality and standard for the park that conforms to the initial vision and plans.  

-- This additional funding will allow for additional park amenities, including a stage, a playground, and an interactive water feature, which will not be provided within the initial budget. 

-- The Council recommends a financing plan that would potentially provide $5 million in additional funding, with contributions from the Town, the State, and other sources, including the Parks Department. 

-- If this plan is realized, the Town will provide an additional $3 million in direct funds to the project, which would raise the amount provided directly by the Town to $7.5 million. 

-- This proposal includes conditions that will ensure full funding and completion of both parks and meet other Town objectives. 

-- The Town has ample reserve funds to address contingencies the Town may face or other special expenditures the Council may choose to make.

Background

The Town has been a steadfast champion of the development of the Bethesda Market Park for the past 8 years, beginning when the Town and surrounding communities worked to include language in the Bethesda Downtown Plan calling for the creation of this park. The park is to be created on much of the land currently used for surface parking between the Farm Women’s Market and 46th Street, and the entire adjacent parking lot between Leland and Walsh streets. A new underground public parking garage for 200 cars, behind the Market, will largely replace the surface parking. 

This project is a complex endeavor, requiring a public-private partnership comprised of the developers, The Bernstein Management Corporation and EYA, the County, the Parks Department and the Town, along with additional funding from the State. After years of work, interrupted by the pandemic, the County Council finally approved the project and an initial budget of nearly $28 million in November 2022. This was estimated to be enough to cover the cost of both the garage, at just over $18 million, and the park, at approximately $9.5 million. The Town committed $4.5 million to this overall budget, with most of our money to be spent on the park. The Town also received an additional $1 million from the State, bringing the total to $5.5 million that the Town was responsible for channeling into the project.  

The developers are responsible for a vital companion project: the refurbishment and expansion of the Market and relandscaping the surrounding plaza at a cost of $12 million. They also will be building two large residential buildings: a seventeen-story tower immediately south of the Market; and a seven-story building on a portion of the parking lot behind the Market. 

The commitments undertaken in the fall of 2022 led to the initial park design that residents saw in public meetings held in the spring of 2023. This design showed a multi-faceted park with a wide array of amenities that included walkways and an oval shaped lawn; ample seating; a wide variety of plantings and canopy trees; and a series of active amenities, including a stage and “game room” behind the Market and an exercise/play area and dog park on the lot between Leland and Walsh streets. We received positive feedback from residents for this park design, with many also wishing that some water feature could be added for summer play. 

Following the public meetings, work stalled until this spring due to lack of progress on the underlying legal documents and no funding agreement to sustain the continued work of the landscape architect. Further, the estimated cost for the park presented in the public meetings was several million dollars greater than the initial budget, due to inflation and a more realistic understanding of the costs of the park features. This led to the parties discussing ways and means of either attracting additional funding or cutting back on the amenities and features of the park.  

Over the past few months, material progress has been made on the legal documents and an arrangement is now in place between the Parks Department and the developers so work can proceed in designing the park. The Town also has developed a proposal to provide more funds to the park project to realize its initial vision.

Our Vision 

What is now before us is a key question. What kind of park do we want? Do we still want what we saw in the initial design, including a water feature, or would we accept a stripped-down park that conforms to the initial budget?

The Town Council has taken the view that we should strive to maintain the quality and standard for the park that conforms to the initial vision and design: an urban green space that is both an oasis and an active space, working in harmony with the enlarged Farm Women’s Market. Bethesda area residents and visitors can enjoy the Market and relax in the park; and those coming to enjoy the park can buy their picnic lunch in the Market. Each component helps assure the success of the other and adds to the vitality and attractiveness of the Bethesda area and the Town. 

We believe that it is important to answer this question soon. Along with continued work on the legal documents, the developers must prepare a comprehensive Site Plan for submission to the Planning Department. We had initially hoped that this Plan could be submitted in the fall of 2023. Now, a great deal of work must be done for a Plan to be submitted in the fall of this year, and the developers need clarity on the key park amenities that they should include in their Site Plan. If development proceeds in line with the current schedule, the new park will not open in its entirety until 2029; but any further delay will only add costs and uncertainty. 

Principles 

The Town has a vital role in addressing -- and answering -- the question as to what kind of park will be built. We have the resources to provide significant funding, as will be discussed below. However, as was highlighted in the Town’s April newsletter, the Council believes that any further help from the Town should adhere to the following principles:

-- A prudent budget review that avoids expenditures on items of questionable value, such as undergrounding utility wires along 46th Street.

-- The Town’s additional financial contribution must be part of a comprehensive plan that will cover the desired amenities and allow an ample amount for contingencies;

-- Contributions will be required from other stakeholders; and 

-- The Parks Department will hold a new public presentation for residents to see the revised plans and for Town residents to have the opportunity to comment both on the financing plan and the new park design before the Town Council takes a final vote on any further financial contribution.

Our Proposal

In line with these principles, the Council recommends a financing plan that would provide $5 million in additional funding, with contributions from the following sources: 

-- $500,000 in additional State grant money for the project that the Town received in FY24.

-- $1.5 million in base funding from the Town.

-- A further $1.5 million in funding from the Town to be matched equally by other sources.

-- $1.5 million matching funds from other sources, including private donations and additional funds from the Parks Department.

If this funding plan is realized, the Town will provide an additional $3 million to the project, which would raise the amount provided by the Town to $7.5 million. Including the State contribution -- now $1.5 million that has been appropriated to the Town for the project -- the total amount funded by or through the Town would be $9 million. 

The purpose of setting out a portion of our contribution to be matched is to incentivize additional contributions from the Parks Department and private donations. Further, as we expect that most of the match will come from the Parks Department, the match structure of 50/50 keeps the Parks Department and the Town financially aligned. 

Setting the additional funds to be raised at $5 million is based on the following considerations: 

-- The current estimate for a park that would conform to the initial budget does not include an exercise/play area, a stage area, a water feature, and various other smaller amenities. These “add-ons” are currently estimated to cost $2.5 million. Further design work is likely to raise this cost. 

-- The current budget includes a 10% contingency for unexpected costs and continued inflation. However, this level of contingency is probably low. The parks can only be constructed several years from now, in the final stages of construction of the overall project, which includes the two new large residential buildings as well as the garage and Market expansion. Further, certain key design elements, such as storm water management, still need to be addressed by the developers and the County. 

-- While we do not want to spend money on what is not needed, the park designers should retain flexibility to offer exciting ideas that realize the vision for the park.

-- Given that any forecasting is inherently imprecise, we prefer to err on the side of ensuring we have an ample plan that will meet our needs now, and not find ourselves short, once again, at some future time.

If the park can be built without requiring all the additional $5 million, the amount saved would be split equally between the Parks Department and the Town. However, the Town is prepared to explore the idea that any such saved money could, alternatively, be set aside for park maintenance. 

Conditions

This funding plan has conditions, which we have made clear to our partners: 

-- We receive assurance from the Parks Department that they support this financial plan and will seek its full funding. 

-- The Parks Department agrees that the park will have the additional amenities that we desire and support the associated capital and maintenance costs, and modification of regulations, if required, to permit the operation of the water feature. 

-- An understanding from the Planning Department that undergrounding of wires on 46th Street and the alley on the western edge of Lot 10 will not be required. 

-- A commitment that construction of the portion of the park between Leland and Walsh streets will proceed as soon as the Parks Department takes possession of that parking lot, and that this should occur promptly upon the opening of the garage behind the Market.  

-- The Parks Department will review with the Town the rules and regulations that will apply to these parks and how they will be enforced. 

-- The Parks Department reconfirms its commitment to collaborate with the Town for programming Park activities in accordance with an agreement to be negotiated. 

-- The Parks Department will support having occasional surveys to determine the level of use and where park users live.

Project Schedule and Timing of Town Expenditures

Near Term:
We have asked the Parks Department and the developers to proceed with designing a park that takes our proposed financing plan into account and to present revised plans to Town residents and other communities as quickly as possible. We hope that a public presentation will be possible in June, and the Town will join the Parks Department in publicizing the event and encouraging community engagement. 

After the public presentation and after residents have had the opportunity to comment to the Town Council on the financial plan and the design, the Council will be ready to vote. We hope that we can take this vote by the time of our July 10 Council meeting. 

Long Term:
The core milestones are as follows:

-- Submission of the Site Plan: fall of 2024.

-- Planning Board approval of the Site Plan: early 2025.

-- Obtaining permits, continuing design work, and obtaining bids: through 2025.

-- Construction closing and initiation of construction on the lot behind the Market: early 2026.

-- Construction of the two new apartment buildings, expansion of the Market, the underground garage and the park on the parking lot behind the Market: 2026 through mid to late 2028.

-- Development of the park on the lot between Leland and Walsh Streets: following the opening of the new garage, with likely completion by mid-2029.

This schedule is based on the timing of the submission of the Site Plan. Any further delay in submitting that plan will cause a delay in the rest of the project. 

Timing of Town Expenditures

With the proposed financial plan, the total resources funded by or through the Town could be $9 million, as mentioned above: $7.5 million of our own funds plus $1.5 million in funds that will be given to us by the State.  

-- Of this total, approximately $1 million is a contribution to constructing the garage. A small amount of this might be spent in 2025, but most, if not all, of it in 2026.  

-- The rest of the funds are for expenditures on the park. A small portion of this amount may be spent on design and other soft costs before park construction begins, but most of our funds will be used for the construction of the park, which we expect will be built in 2028 and 2029, at the end of the overall project construction schedule.  

Prior to being allocated to cover project costs, the Town funds will stay in our reserves, earning interest.  

Town Reserves and Means to Fund the Park

The Town Council has introduced a budget for FY25 that concludes with the projection that at the end of this upcoming fiscal year, the Town will have $18.3 million in reserves. Subtracting the $4.5 million already committed to the parks leaves an uncommitted total of $13.8 million.  

If we contribute a further $3 million to the park, our uncommitted reserve would be $10.8 million.  

The size of our Town reserves averaged somewhat more than $4 million from the end of FY08 to FY11; then averaged around $8 million from the end of FY13 to the end of FY19; and grew to over $10 million by the end of FY21. The Council believes that an uncommitted reserve of over $10 million remains ample for contingencies we may face or any other special expenditures we may choose to make. 

One reason for the rapid further growth in the level of Town reserves over the past few years is the receipt of federal grant funds made available through the American Rescue Plan Act (ARPA) legislation passed in 2021. The Town received a total of $2.4 million in FY21 and FY22. Of this total, $125,000 was used to support Wonders Early Learning during the final year of the pandemic. The rest has been used, as was ruled appropriate by the Treasury Department, to offset Town operating costs. This, in turn, has led to a corresponding increase in our reserves. Now committing an additional amount from our reserves will honor one of the intended purposes of the ARPA legislation, which was to spur local infrastructure that can provide for the common good. 

In Closing

This financial plan for additional contributions balances a number of considerations. It reflects the goal of creating an exciting and high-grade park that will be appreciated by Town residents and other communities around Bethesda and beyond. It commits additional resources we can afford to offer but also places a meaningful requirement on others to join in the funding.  

This financial plan is a draft, and we welcome comments and feedback from residents at any time; but, in particular, the Council wants to ensure that residents will have the opportunity to see and comment on the revised park design before it takes a definitive vote on increased funding.  

We look forward to engaging with you on this important matter.