Third Coast In The News

Slow down on parking No hasty decisions on selling Grand Rapids parking facilities to private developers look into leasing, Editorial, The Grand Rapids Press, Grand Rapids, Michigan, Apr 3, 2007

Before putting a for-sale sign on its parking facilities and shuttle bus system, Grand Rapids must investigate the idea of privatizing the services -- thoroughly. Selling government assets for a one-time infusion of cash should not short-change the city or taxpayers. Neither should it be rushed into without considering other options, such has leasing, instead of selling.

A local developer wants to buy four of the city's downtown parking ramps, 10 surface lots on the outskirts of downtown and the DASH shuttle service. Third Coast Development Partners, owned by Bradley Rosely and David Levitt, estimate the deal could net the city between $35 million and $45 million. They want a 45-day exclusive negotiating period. City Councilmen Rick Tormala and Jim White are pushing the deal as a way to help the cash-strapped city hire more firefighters and police officers and reopen swimming pools.

The idea of privatizing parking has merit. It could bring in cash and relieve the city of operating and related expenses. Adding the parking property to the tax roles could produce up to $1 million a year in revenue for the city. But leasing the ramps and lots, not selling them, seems a better option. That way, the city could shift parking expenses to a private operator, while at the same time never losing control of the asset.

The proposed parking deal would put two-thirds of downtown parking into private hands. Parking isn't a fundamental service of government. However, it is important for making the city accessible to visitors. Commissioners need to be concerned about making it convenient and welcoming for drivers to travel downtown. That includes having parking at reasonable rates. A lease agreement could have requirements that rates increase at a controlled pace. Over time, the city has acquired key parcels for parking that have the virtue of being offered for development -- in the future. Selling them to a developer, any developer, gives all options to someone else.

Mr. Tormala has said he doesn't want a repeat of the "Request for Proposals" process that dragged out recently when city officials unsuccessfully sought bids for the Public Works facilities at 201 Market Ave. SW. Mr. Tormala's 20/20 hindsight offers the city no clear vision for why he would offer this or any developer an exclusive option. What he has brought into view is the chance for the city to reduce its payroll in an area of service where the level of pay and benefits might be out of line with the marketplace. But his business brainstorm in eschewing bids deserves to be permanently parked itself.

The next step for the city should be to determine what the parking facilities are worth. Two new ones, erected near the Van Andel Arena, still carry construction debt, which would have to be factored in the equation, too. This city would not be the first to get out of the parking business and could well learn from the experiences of others. A growing number of cities and states are selling or leasing infrastructure to private firms. The city of Chicago recently leased four downtown parking garages to private developers for $563 million. Analyzing that deal might offer important clues as to what would work here. There is nothing driving a fast sale, other than one commissioner's impatience.

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