Private Sector Debates Parking Sale

April 27, 2007
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GRAND RAPIDS — Executives with one of the area's most active development firms and the region's top construction company are clearly opposed to the city selling two-thirds of the downtown public parking system, and both urged city commissioners to nix the offer made by Third Coast Development Partners.

Rockford Development Group member Kurt Hassberger and Rockford Construction CEO John Wheeler told the city in writing that if commissioners accepted the ThirdCoast offer of $35 million to $45 million for four downtown ramps and 10 surface lots, the sale would "drive up parking rates."

They also wrote that a sale to ThirdCoast would "burden the overall parking system with another layer of profit that is not currently paid through existing parking rates" because the firm isn't familiar enough with downtown.

"We do not believe that privatizing the existing public parking facilities makes sense. Acceptance of the current proposal would reverse over 30 years of planning," wrote Hassberger and Wheeler in a letter to the commission.

"Projects such as the new Blue Cross Blue Shield corporate headquarters could not have happened if the MonroeCenter ramp were privately owned," they added.

Rockford Development brought BCBS and its 280 employees to the former Steketee's Department Store on MonroeCenter, a building Rockford Construction restored. BCBS found enough employee parking in the ramp through a deal it made with the city's Parking Services Department.

Executives at Grubb & Ellis|Paramount Commerce, a leading commercial real estate firm, put their feelings in writing, too. G&E|PC principals Bill Bowling, Ray Kisor, Duke Suwyn and Tom DeBoer said they saw the transaction only as a "quick fix" to the city's ongoing budget problems, and they suggested the city look at alternatives to fund the general budget for the long term.

"We believe the sale is a short-term solution with long-term negative effects. Since the proposal allows the purchasers of the lots to develop the land and only requires replacement of the parking, we are almost guaranteed a loss of well-located, CBD parking," they wrote.

Mayor George Heartwell and City Manager Kurt Kimball said they received a lot of input from real estate firms, developers, business owners and parking customers on the sale, but there was little support for the sale in all that feedback.

Kimball asked commissioners to reject the ThirdCoast offer, along with the thought of privatizing the public system. But the panel didn't go that far last week.

At the urging of 1st Ward Commissioner Roy Schmidt, commissioners sent the issue back to the Parking Commission. Jack Hoffman, chairman of that board, told the city his panel would look at how Parking Services could help fund the general budget, which is facing about a $17 million shortfall for the coming fiscal year.

One idea Hoffman had was to turn over to the city the department's share of parking fines, after expenses. Gross revenue to the department from fines totals about $1 million annually. Parking commissioners are considering raising penalties for some of the violations; doing that would boost overall revenue past its current total.

Heartwell, White and 2nd Ward Commissioner Rick Tormala, who wants the city to look further into the idea of selling or leasing the city's downtown ramps, are putting together a set of guidelines for the Parking Commission to follow.

"Let's look at all ideas on how we can get more money into the general fund," said 2nd Ward Commissioner Rosalyn Bliss.

Although they didn't reject ThirdCoast's offer, it seemed remote last week that commissioners would turn over most of the downtown public parking system into private hands. At least four of the seven board members — Schmidt, Bliss, Heartwell and James White — expressed some reluctance over making such a change.

"Privatization doesn't save money, and it always cuts services," said White, a 3rd Ward commissioner.

"Privatizing most government services is not going to save funding to the government," said Heartwell. "I plant myself firmly in the camp of a cautious skeptic."

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