Third Coast In The News

Sale of parking areas no 'silver bullet' City manager skeptical proposal will solve GR's financial crunch Editorial, The Grand Rapids Press, Grand Rapids, Michigan, March 30, 2007

GRAND RAPIDS -- Selling downtown's parking system to private developers is a decision that should involve a lot of soul- searching and take more than 45 days, skeptical city leaders said Thursday.

"This is a complicated process, from A to Z," City Manager Kurt Kimball told a joint meeting of the city's Downtown Development Authority, the Parking Commission and the city's Building Authority, which owns four of the city's parking ramps.

Kimball called the meeting two days after Third Coast Development Partners offered to buy about two-thirds of the city-owned parking facilities and its DASH shuttle bus system.

Third Coast, which asked for a 45-day negotiating period, estimates it could pay the city between $35 million and $45 million for the four ramps and 10 parking lots. The deal would put about 4,700 of the city's 6,700 parking spaces into private hands.

City commissioners Rick Tormala and James White have pushed the idea, claiming it could help the cash-strapped city hire more firefighters and police officers and reopen swimming pools.
Kimball downplayed the windfall a sale might bring.

"I don't think this is a silver bullet to our financial problems nor should anyone else," he said.

Besides hiring appraisers and crunching the numbers to determine what the system is really worth, Kimball told the boards they should consider what the parking system is worth as a downtown economic development tool.

Jack Hoffman, chairman of the Parking Commission, estimated it will take his board at least six months to study the impact of selling off part of a system that has supported downtown economic development for 30 years.

Mayor George Heartwell said the city needs to understand whether the offer for the parking spots matches the money they could be worth if sold as development sites.

Downtown Development Authority Director Jay Fowler said the DDA- owned DASH parking lots Third Coast wants to buy are "deeply subsidized" as part of the agency's mission to promote downtown development.

Parking commissioners also wondered how much cash would end up in city coffers after the outstanding debt on the city ramps are paid off by the purchase price. The parking ramps carry at least $17 million worth of debt, some of which cannot be paid immediately.

"That money will be gone before you know it," said parking commissioner Monica Sekula.
Building Authority member Bob Scott noted the parking system generates cash for the city's general fund. "The only thing I would say as a citizen is, 'Why would they get rid of a business that was successful?"

David Levitt, a partner with Third Coast, argued that parking is a "noncore" function of city government.

Other cities of the same size as Grand Rapids have grown without city-owned parking, he said.

If it buys the facilities, Third Coast has promised not to raise prices above the rate of inflation and has promised it won't develop the existing lots without replacing the lost spaces.

Levitt said they also plan to keep the DASH service free to downtown users. They may ask businesses to help sponsor the service, he said.

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