No Parking Pass Here

April 6, 2007
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GRAND RAPIDS — One downtown parking space in a surface lot? $6,000.

One downtown parking space in a covered ramp? $25,000.

One downtown public parking system? Priceless.

Those are likely to be the answers Parking Services Director Pam Ritsema will give city commissioners if they ask her those "cost" questions Tuesday, when they review a proposal from Third Coast Development Partners.

Ritsema and members of the Parking Commission are expected to be on hand when city commissioners delve further into the offer from ThirdCoast to buy 14 ramps and lots in the system. The Downtown Development Authority and the Grand Rapids Building Authority are also expected to have representatives at the meeting.

All three groups met with Third Coast after the firm presented its proposal to the City Commission two weeks ago when the development company requested an exclusive, 45-day negotiation period to determine if a deal was feasible.

ThirdCoast Principal David Levitt said his firm was initially offering $35 million to $45 million for the properties, but added that the company was willing to hike its bid if doing so made financial sense. But City Manager Kurt Kimball said the city doesn't know the market value of the properties and needs time to find that out.

Ritsema told the Business Journal the market value could only be determined through an independent appraisal; doing that will take time and money. ThirdCoast has offered to give the city $15,000 to help with its expenses during the negotiation process, but wants the money returned if the city opens the sale to bids.

Ritsema said a city ordinance requires the Parking Commission to make recommendations on any major alterations to parking policy. Selling the facilities qualifies as a major alteration.

"They want to make sure they have adequate time and adequate resources to review the proposal. This isn't a 45-day thing. There is a whole list of numbers and data that has to be accumulated to sufficiently review the proposal," said Ritsema.

In addition to generating and reviewing the data, parking commissioners will have to answer a very important policy question.

"Do you want to unwind a public parking system that has been in place for 30 years, is well run, is currently financially solvent, and sell off its assets?" said Ritsema.

Then there is the economic development question commissioners will have to answer.

"If you sell two-thirds of the parking system, do you ever do new construction, or do you just get out of the business entirely?" said Ritsema.

If the system is sold, Parking Services would be left with three ramps and four lots in the downtown sector. Of the seven, only two are owned by the department.

MDOT owns two of the lots: Ionia North and Monroe North. The Convention and Arena Authority owns the

DeVos Place
ramp and Area 2 lot. The GovernmentCenter ramp belongs to the city, and its revenue goes to the general fund, not the parking fund.

Parking Services owns the lot on

Scribner Avenue
and the ramp being built at
Cherry Street
and
Commerce Avenue
. The ThirdCoast proposal does not include the lots in the city's business districts or the on-street metered spaces.

Parking commissioners will come together Thursday for their first discussion of the proposal and review what happened Tuesday at the City Commission, the meeting where Kimball is expected to lay out a plan for going forward.

The DDA will meet Wednesday, a day before parking commissioners, and members are likely to review the proposal, because the board owns the park-and-ride DASH West and South lots, which are in ThirdCoast's offer. DDA Executive Director Jay Fowler said last week that he wasn't sure what the board will discuss.

"I don't know yet. I'm still pondering the questions of what direction we at the DDA should take. I presume we will be exploring the idea along with the city and see where that takes us," he said.

The DDA owns areas 7, 8 and 9, the lots that make up the DASH West service, and areas 6 and 6A, the lots that make up DASH South. But the city's public transportation company, the Interurban Transit Partnership, has held an option to buy Area 6A for a while and is leaning toward purchasing it for its downtown station.

The DDA also owns Area 4, a lot that has drawn interest from a southeast Michigan joint venture, KG Development, as a site for a multi-screen theater complex with retail and parking. Although talk about the project has slowed since last October — when an exclusive negotiating contract KG had with the DDA expired — both sides are still talking.

"Not very actively, but we have talked in the last month," said Fowler.

KG Development said if the theater goes forward it would be interested in buying Area 5, the lot to the east of Area 4, for a hotel, condominium and retail project. The city owns Area 5. ThirdCoast included areas 4 and 5 in its proposal.

The third group that needs to chime in on the sales bid is the city's Building Authority, which is set to meet April 18. The Building Authority carries about $30 million in debt service for three of the downtown ramps ThirdCoast wants to buy.

Levitt said Third Coast would maintain the number of spaces in a lot if it sold one for development, would honor all current parking and labor contracts, and would limit price increases to inflation should it carve out a deal with the city. He also said the city would receive about an additional $1 million a year in property tax revenue if ThirdCoast closes a deal with the city.    

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