- change ups
Where To Park The Deal
Although Kimball didn't identify those parties, Ellis Parking Co. President Michael Ellis said his firm is one that is definitely interested.
In fact, Ellis told the Business Journal that his company, a family-owned firm headed by his father, Ken Ellis, asked the city — and on more than one occasion — if the system was for sale. Ellis said he made those inquiries years before Third Coast Development Partners unveiled its offer late last month. But every time he asked, he said, the city said no.
Well, Ellis Parking and the other "interested parties" may get their chance to place a purchase bid on the four ramps and 10 lots that
Or they could make an offer to lease and operate the facilities for an extended period, if commissioners decide to do that next week.
Or they could be shut out of the process entirely, if commissioners decide to negotiate a sale or lease deal exclusively with
Those are the apparent options right now, and there doesn't seem to be a clear favorite.
Kimball likes a competitive bidding process for a long-term lease of the properties. Second Ward Commissioner Rick Tormala thinks the city should sell its ramps and lots for $30 million, leaving the lots owned by the Downtown Development Authority out of the deal, and put half of the receipts into an endowment fund that would be designated to help neighborhoods.
Third Ward Commissioner James White wants
But 1st Ward Commissioner James Jendrasiak, 2nd Ward Commissioner Rosalyn Bliss and 3rd Ward Commissioner Elias Lumpkins all want more information.
"I would like a much better long-term and short-term evaluation," said Bliss. "There are a lot of questions I still have, even though we've been given a lot of information."
One piece of information Bliss and other commissioners have is that the due diligence preceding a sale would be costly to the city. Kimball and his staff reported the cost during the preliminary stage could easily approach $200,000, with $140,000 of that amount being spent on appraisals of the 14 properties.
"If we successfully achieve a closing of the transaction, costs could exceed $1 million; such cost will dilute transaction proceeds," he wrote in a memo to commissioners.
"If we do not achieve closing, cost incurred by all parties — including the city — up to that point will be lost," he added.
Jendrasiak disputed the validity of that price tag as he questioned whether the city needs outside legal and engineering services that could cost the city close to $200,000. Kimball said the city had already spent $11,000 in staff time since
Kimball also told commissioners that cities are leasing instead of selling their parking facilities, and gave them a timeline that shows a transaction could take up to two years to complete.
"The city of
Commissioners are waiting until next week to take another crack at what to do with the parking system so they can hear what members of the DDA and the Parking Commission have to say about a potential transaction.
A city ordinance requires the Parking Commission to chime in on the
"I don't think we should rush anything," said Bliss, "especially something of this magnitude."
DDA Leaves Door Open
Most members of the Downtown Development Authority went on record last week as being reluctant to sell seven parking lots to Third Coast Development Partners, the firm that has made an offer to buy a total of 14 public parking facilities in the downtown system.
"I'm a big believer in the private market, but we've developed a model that has worked for 30 years," said long-time board member David Cassard.
But members added that they weren't turning their backs on a transaction.
"By saying we're reluctant, we have not shut the door," said DDA Chairwoman Kayem Dunn.
Only DDA member Paul Mayhue argued that the board should consider a sale, as he said the city desperately needs a cash infusion.
"Right now, we're in a cash-strapped situation citywide," said Mayhue, also a county commissioner who represents a district in the city.
"We have to think in terms of the broad picture," he added.
The DDA owns five DASH park-and-ride lots and two more near Van Andel Arena, and all are included in the
"Our intent is not to be in land speculation. We do that in another business," he said.
Parking commissioners last week set aside making a decision on the proposal from Third Coast Development Partners to purchase most of the downtown public parking facilities until they can determine if privatizing the system would benefit the city.
Commissioners said they didn't have enough information or time to vote up or down on the offer from
"We don't want to be viewed as coming out with a hasty 'no,'" said Commissioner David Leonard. "We're playing defense, not offense."
But at least two of the nine commissioners seemed ready to reject the
Commissioner Kevin Denhof said public parking is an economic tool that has allowed building the lots that support DASH shuttle service and ramps that support new developments such as the arena, art museum and growth in the Cherry Street Landing district.
"How will the city pay for future parking ramps without the (parking) revenue?" he asked.
Commissioner Kathy Clements said she asked at least 25 downtown business people if they favored the
"I certainly think this has to go to open bidding," said Clements, a commercial Realtor.
Parking Commission Chairman
"Our mission is for the community," said Parking Commissioner Lisa Haynes, "and we need to strongly consider that."