Split Rock Parking Ramp Project Is Back
GRAND RAPIDS — The future of a proposed parking ramp will get another look from the city, while the fate of an existing city-owned parking lot may be decided by two groups that have an interest in it instead of the city.
The city’s Economic Development Project Team decided last week to continue talks with Split Rock Development V LLC on its new proposal for a 480-space underground ramp at Monroe Avenue and Newberry Street NW in the Monroe North Business District.
Split Rock Development, which is headed by Blue Bridge Ventures CEO Jack Buchanan, wants to build an $85 million, 300,000-square-foot, mixed-use building over the ramp. The city rejected his initial ramp proposal in December as being too risky for the municipality to get involved with, so Buchanan submitted another offer that he feels protects city dollars.
“We need to work with him on this project and we need to send it to the Parking Commission, as a courtesy,” said Mayor George Heartwell last week before the Parking Commission rejected the proposal two days later.
“We’d like to make this work, but there are hurdles to overcome,” added the mayor.
Instead of having the city build the parking facility as in the first proposal, Split Rock would do that and finance the construction cost by buying bonds issued through the city Brownfield Authority.
Split Rock would operate the ramp, assume responsibility for all losses and liabilities, and get all the parking revenue from it. It would also get the tax-increment financing generated by the new development, up to $14 million.
According to the proposal, the city would hold the title to the facility and would only be obligated to make the brownfield application to the Michigan Department of Economic Development. Split Rock Development would hold the city harmless from any liability associated with the garage or its management.
“It’s our struggle and we’re going to have to deal with it,” said Buchanan of making the bond payments.
Although Deputy City Manager Eric DeLong said Split Rock has reduced the financial risk for the city, there still were problems with the proposal.
“It wouldn’t meet the definition of a public ramp,” he said, which could affect a tax-exempt bond package. “The rates would be set by the developer.”
Buchanan, though, said he knew his project doesn’t qualify for tax-exempt bonds because Split Rock would manage the ramp -- an arrangement that disqualifies the facility from that financing status.
DeLong added that Split Rock didn’t include a construction cost or a revenue forecast with its proposal and said the city could be in default if Split Rock missed a bond payment.
“The rating agencies would have a field day with us,” said Scott Buhrer, director of city fiscal services.
DeLong said he would have an update on the talks with Split Rock next month.
“The bottom line is we need parking in the area,” said Buchanan. “The development is starting to stagnate.”
Meanwhile, who will actually buy a city-owned parking lot on Monroe Avenue just north of Fulton Street, situated between 50 Monroe Place and The BOB, may be left up to the parties that want to purchase it.
The Gilmore Collection, doing business as 20 Monroe Avenue, has agreed to a three-year option on the 31,345-square-foot lot that stretches north and east of The BOB, the firm’s downtown entertainment complex. Gilmore Collection CEO Gregory Gilmore wants the lot for an expansion of The BOB that includes a performance theater and a restaurant.
Parking commissioners approved the option agreement that the city drew up with the Gilmores last month, and the Gilmores have been waiting since then for the contract to reach city commissioners — who also need to approve it.
But the new owners of 50 Monroe Place, the office building recently purchased by Craig Hall and David Samrick, also want to buy the lot outright, without an option, to expand their building.
DeLong said the city told 50 Monroe Place to talk with the Gilmore Collection and try to iron out some type of agreement. Until that does or doesn’t happen, DeLong said the Gilmore option would not be going to the city commission.