Monroe North may get parking
The Monroe North Business District is the closest it has been in years to getting the city to build public parking within its boundary.
The city’s Parking Services Department has negotiated a tentative contract with Irish Twins III to build a pair of surface lots with a total of 163 spaces on the former Imperial Metals property at 801 Ionia Ave. NW.
The agreement has Parking Services buying two parcels on the site, one that fronts Ionia and one a block west, just off of Ottawa Avenue. Both total almost 49,000 square feet and the city will pay $32.80 for each square foot. The purchase price can’t exceed $1.6 million.
But unlike other recent parking agreements, such as those in the Heartside Business District, this one lets the city capture obsolete rehabilitation revenue, brownfield tax credits and tax-increment financing dollars for 20 years — worth about $1.4 million — to help the city finance the property purchase and build the lots.
Those tax benefits, though, normally go to developers as a reward for improvements they make to a property and for the new jobs the projects create. Still, Jack Buchanan, one of the investors in Irish Twins, will welcome the parking spaces because it means he can move his project forward.
“If you look at what the city has done in developing a significant number of parking spaces in both ramps and surface lots in the area south of Fulton (Street), it’s evidence that public parking is critical for development. North Monroe has been lacking parking for a long time. That has certainly been a handicap to properties that we have been involved with in North Monroe, when we haven’t been able to get public parking,” he said.
“As I recall, it’s been discussed for over 15 years for what we need to do just to get a lot. So this is certainly beneficial for creating a place to park for people who will work in our buildings that we’re going to develop and for the area. This breaks down the barriers and allows developments to go forward,” he added.
Buchanan said he and his partners will have 39,500 square feet to develop for office space in two mostly two-story buildings, one on Ottawa and the other on Ionia. He said he has a tenant close to leasing space and is working with two others that are interested. The contract with the city calls for the Irish Twins project to have a minimum taxable value of $2.5 million when it is completed. The partners are likely to invest $5 million into the development.
Parking Services Director Pam Ritsema said the Irish Twins agreement is the first that has a developer contributing to the financing because the lots’ revenues are uncertain due to a lack of nighttime traffic and parking in Monroe North — unlike Heartside, which has plenty of nightspots and the arena.
Ritsema said her department will spend $1.2 million to build the lots, or $7,455 per space, which will bring the total cost, including the property purchase, to $2.8 million, with the planned tax captures picking up roughly half the tab.
Parking Services will bond for nearly $2.2 million over 20 years at an estimated 5.5 percent annual interest rate and be left with a yearly payment of $183,000. Ritsema said a down payment of $624,000 will come from the department’s cash reserve.
The monthly rate for a space in the lots is projected to be $60. The development is expected to bring from 90 to 120 jobs to the site.
City commissioners have to approve the transaction before the deal can close.