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Third Coast May Make Another Offer
GRAND RAPIDS — Second Ward Commissioner Rick Tormala has made it clear that he thinks the city should take a long, hard look at leasing the public parking system to a private operator.
Tormala argued two weeks ago that under the existing set-up, parking revenue to the city only pays for parking operations. But if the system was leased and in private hands, he said the yearly lease payment could help cover what he considered were more vital services than parking, such as police and fire protection.
And Third Coast Development Partners couldn’t agree more.
When Third Coast offered to buy 14 downtown parking properties from the city for as much as $45 million a few months back, the partners made that offer because they knew the city’s cash-strapped general fund needed a hefty infusion.
A $5.2 million infusion is needed this year.
But a sale is about as far off the bargaining table as one can be, as four of the seven city commissioners have publicly said they aren’t in favor of selling the properties. Still, Third Coast remains interested in talking with the city about another possible arrangement.
“From our perspective, a purchase, a lease, a concession agreement are essentially the same concept. Originally we talked about a purchase, because in the eyes of most people that is what we were asking for: a period of control over assets. But certainly any method of achieving that is what we sought,” said David Levitt, a principal in Third Coast.
“We certainly would be willing to continue the discussion. We had spoken at one point in time that we’d be more than interested in pursuing a discussion on a different set of parking assets,” he added.
Levitt and his Third Coast partner Brad Rosely have considered coming back to the city with another proposal. But Levitt said they have held off from doing that for two reasons.
One, they hoped that either the city or the Parking Commission would have countered with a different offer for the properties in their proposal or responded with another set of facilities. Neither has happened, yet.
Two, if they made another proposal, they feared someone would accuse them of cherry picking the most lucrative properties and leaving the rest to the city. Levitt said they heard that accusation after they made their initial offer, and he said then that they weren’t doing that.
“We even offered in our original proposal to take the DASH bus system, which is not a money maker at all,” he said.
“The short answer is, yes, we would be willing to (propose a lease) and are considering coming back with an alternative proposal.”
But while Third Coast thinks about making another proposal to the city, the firm is also looking to either buy or lease parking facilities in other markets. Levitt didn’t identify any of the locales they’re following. But he did say those areas seem to be more open to discussing a potential deal than Grand Rapids appears to be, and that factor has them seriously thinking about their next move.
“What we’re trying to decide right now is, do we bang our heads against the wall in Grand Rapids or do we focus on more interested and willing parties? Then if Grand Rapids changes its mind, do we come back then?” he said.
“In business sometimes you go to where you can make the money. So, that is what we’re kind of looking at.”
The Third Coast purchase offer may be on the commission’s agenda next week.