Third Coast In The News

Developers want to buy city lots, shuttles, Editorial, The Grand Rapids Press, Grand Rapids, Michigan, March 27, 2007

GRAND RAPIDS -- A local developer is offering to buy most of the city's publicly owned downtown parking ramps and its DASH lots and shuttle service.

Bradley Rosely and David Levitt say their company, Third Coast Development Partners, can pay the city handsomely for the facilities, make a profit for themselves and generate new tax revenue for the city's cash-strapped budget.

City commissioners Rick Tormala and James White are sold on the idea. They planned to present the offer to the full City Commission today. They say the city could use the money to hire more police officers and firefighters and revive dormant swimming pools.

Third Coast's offer encompasses about 4,700 of the 6,800 parking spaces the city owns and operates downtown.

Plans are preliminary at best. By their own admission, Rosely and Levitt have yet to complete the homework needed to make an offer for the four downtown parking ramps and 10 surface lots on the outskirts of downtown.

The offer does not include spaces beneath DeVos Place convention center or the City/County Administration Building. Also not included are a ramp under construction at Cherry Street and Commerce Avenue SW and several smaller lots.

Tormala, who criticized Mayor George Heartwell for signing a confidentiality agreement with developers eyeing city property last year, said he and White hope to begin a "transparent" process to find out how much the parking facilities are worth. They speculate the deal could bring the city from $35 million to $45 million.

"I'm not going to sell them anything unless we get top dollar," said Tormala, who said he was approached by Rosely and Levitt because of his skepticism about past development offers.

Tormala doesn't want to create the type of "request for proposals" process that dragged out recently when city officials unsuccessfully sought bids for the Public Works facilities at 201 Market Ave. SW.

"I don't think it should take months to establish the value of this property," Tormala said. "There are times when all you need is sound financial analysis and common sense."

Levitt said they would be willing to let competitors try to match their offer once a final price has been determined. "We believe we can work out a fair and equitable process," he said.

That process will include agreements to limit price increases to inflation, agreements to maintain the current number of parking spaces and allowing the city to retain lots to ensure competition.

Michael Ellis, president of downtown's largest private parking operator, Ellis Parking Co., said the proposal would force a change in the city's philosophy towards downtown parking as an economic development tool.

"Until I hear more, it's hard for me to react," he said.

As privately owned facilities, the city parking facilities could generate up to $1 million a year in taxes, said Rosely, who also is developing the Mid Towne Village medical office project near Michigan Street and College Avenue NE.

Nevertheless, the developers believe they can turn a profit by lowering costs and expanding the Downtown Area Shuttle service that connects the parking facilities. The shuttle would continue to be free, possibly subsidized by downtown businesses, Levitt said.

The DASH lots are situated in two areas -- near the Grand Valley State University campus and near Van Andel Arena -- and the free shuttle buses run on three routes downtown and up Michigan Street Hill.

"Parking is not a core city function, we believe," Rosely said, noting that similarly-sized cities have no city-owned downtown parking facilities. Cities such as Chicago recently have sold some of their parking facilities, he said.

Levitt said they are confident they can get financing for their proposal. "Private ownership is not new. We got this idea from reading BusinessWeek and the Wall Street Journal."

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