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Scheme to sell city parking lots


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Well you did compare them to Azzar, which on this board is a yo momma slight.

Let me ask you... if you paid 100k for your house 10 years ago, and somebody offered you 1 mill last week for the same house, would you take it? If you didnt because you thought the value would keep rising, would you give the offering party a bunch of flack for the offer?

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Other than a quick jolt in the coffers and some political capital for a couple of commissioners, where does selling these lots fit in with other steps such as increasing downtown retail, mass transit, the city budget 5 years from now, etc. Short term fixes have a tendency to backfire.
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I think a more apt comparison would be if someone offered you 1 million for your house and you rushed home to your spouse and said we need to take this deal right now! We can pay off the mortgage, put the kids through school, etc. I don't think (but some might :blush: ) it would be considered "flack" if your spouse asked some questions like, where is this million coming from? Who are these people? Why would they pay 1 million for our house? If they'll pay 1 million, what will someone else pay? Where will we live if they buy our house? etc.

I haven't seen a great deal of criticism against Third Coast. In fact, I applaud them for their ingenuity. My concern was not Third Coast, but RT and the city. What I want to see is a freaking plan. I assume the city could put some provisions in the sale contract to ensure the number of spaces can't decrease unless certain criteria are met, parking rates can only increase by x% annually, etc. But this is just a piece of a larger puzzle. Other than a quick jolt in the coffers and some political capital for a couple of commissioners, where does selling these lots fit in with other steps such as increasing downtown retail, mass transit, the city budget 5 years from now, etc. Short term fixes have a tendency to backfire. Whether you're dealing with perceptions or reality, downtown parking is a dicey subject. Downtown development stands at a crossroads. I don't want to see things wither and die because parking (or lack thereof) became an even easier scapegoat. Let's get a plan.

Just my two cents. :shades:

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I just saw somebody call them "east coast investors" and decided I'd comment. I dont think they have a bad idea considering the Michigan zeitgeist. The city is giving it a look because it'd give them an instant 35 - 45 million in property tax revenue along with a slug of $$ and less liability, ect.

Is there a creative way to assure that potenially high value developments might not be lost in the future? How about buy back options with a gaurenteed rate of return, or first right of refusals on select parcels? Can this be made into a win-win?

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Well you did compare them to Azzar, which on this board is a yo momma slight.

Let me ask you... if you paid 100k for your house 10 years ago, and somebody offered you 1 mill last week for the same house, would you take it? If you didnt because you thought the value would keep rising, would you give the offering party a bunch of flack for the offer? Some of these lots were probably pretty cheap not so long ago, and like everything else downtown have gone through the roof in value in the last 5 years. Buy low, sell high. How stressed is the city budget while all this new development goes vertical - are they reaping any new property or other type taxes from all the cranes yet? Think engineering, planning, permits and inspections... or any other dept associated with development arent stressed to the max right now? If those buildings all fill it'll make a difference, but right now its got to be tough. I dont think it would be outrageous for the city to counter this offer with less properties than what they are asking for to help them get over the hump - and see what happens.

Their offer is generous, and obviously the city isnt making that much on the lots... and they are not that well managed (I have seen the Heartside lots closed when they could be making $$ on non arena events).

As far as Third Coast hoarding and not selling lots... yada yada, its a free market, and they are offering top dollar. Who is to say they arent paying too much? Who is to say they arent busting at the seams with backers and just dont want to disclose development plans with the closer in lots? My point was that they ARE spending $$ on the hill right now, so it isnt fair to call them Azzar or Ellis. These guys' offer deserve consideration if not a counter offer, IMO.

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Hi all,

Interesting to see the dialogue over the last few days. Sorry for not commenting sooner but after we laid the bomb last week, we decided to skip town and hide...not really, we just took our kids on spring break. Just a few points and then I will again hope this thread goes to the UP graveyard:

1) With our experience locating some of our corporate clients in GR and other places we have NEVER had a customer ask who owns the public parking. So, the argument that the City needs to own parking for economic development to occur is just not right. Did I say NEVER...? I meant Never Ever.

2) For those defending our (Third Coast's) honor, thank you! We have no sinister plans to create a parking cartel, raise prices, shut down the dash, kidnap babies or to turn GR into a fascist terror state. All we are suggesting is that placing a portion of the parking in private ownership will benefit the City. We have done some development and we think we've been "good developers."

3) As for City Controlled Development...with all due respect to our city staff, this comment makes me laugh. In downtown GR, the successful development has mostly been private. Sometimes Public/Private partnerships but generally private. Without risk takers the model collapses and frankly Win or Lose, I'd rather have our downtown development in the hands of for-profit developers than government bodies. Putting city owned parking in our hands wont stifle development. Just check out the UP downtown parking thread to see how much of our core is already used for parking most of it is already in private hands.

4) Our plan was to "out" this idea for public discussion. If we can make sense of it with the City then we move forward. We are not choosing sides with the City Commission or anyone else. If, after good debate, we can reach a deal, great. If not, well we tried.

5) This concept has been successfully tried in a number of areas without causing great harm. Sadly, it is done by out of state or non-US based companies. Why not get this on the table with some local folks?

6) Of course we are in this for profit...is that a sin? We think that we can change the way the lots are marketed and operated and make a few bucks. Not on the backs of the motoring public but in other ways. Sorry, if we don't share the ideas here but they are our way of making more money so we need to keep it a "trade secret." Suffice it to say it is not about harming people or development.

7) The common arguments of "it's not enough" or "short term thinking" are as silly as they are uninformed. If we make a trade (cash for land) it must be done at a fair value or it won't happen. The people at Mid Towne may say a lot about us but underpaying is not our history. Short term thinking is the other point we've heard. What does this mean? We are not suggesting that the City go out an blow the cash like drunken sailors on leave (no offense to sailors). But rather they can pay down debt, and literally invest the funds to provide a return (like an endowment). Now, the fact is once we hand over the cash, it is theirs to spend as they see fit but the model in other places has worked pretty well. Chicago did the first two and STILL had cash left over for some short term thinking like road and park upgrades.

So, in conclusion, we think this debate is good. We are not sinister, and we think there are any number of variations that can work (lease, partial sale, etc) We just believe that we can add value and help the city.

Thanks,

DJL

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For me, it all comes down to one thing (as evidenced by the too much parking thread):

The downtown DASH system, though at first glance "seems" successful, is a horrible waste of downtown land. And a plan should be put into place today to phase the DASH lots out of existence by the year 2012 or sooner, without replacing one of those parking places anywhere near downtown, and by implementing a mass transit system to take its place. In whose hands is that more likely to happen? The city's or private individuals? Maybe it's private individuals, but I just don't see that happening.

There is absolutely no reason that thousands and thousands of people are driving single occupant vehicles into the city and storing their cars all day on some of the most valuable land in West Michigan. I think a lot of people here are of the same opinion. Again, what would be the impetus for a private individual to get rid of the DASH lots if they are making money on them? The only way they would sell them would be for a big premium over what they paid for them, making it all that much more difficult for future developments to be viable.

To me, this has nothing to do with "privatization" at all. In fact, I think selling the city-owned ramps would be a good idea because they would generate tax revenue, and they're not going anywhere anytime soon.

Here's an idea for you DJL, buy land out in the near suburbs like Wyoming, Kentwood, Comstock Park, Grandville, etc. where it is a lot less expensive per acre, build parking lots, and then shuttle people to downtown. I'm betting you'd make a lot more money than the DASH system makes. Or better yet, light rail them to downtown from these suburban lots. Then turn your suburban land into transit-oriented developments around the stations. I can show you city after city where this kind of system works tremendously.

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Here is my concern and reasoning. Right now, the city owns a s__tload of parking lots, and I want to see these parking lots become buildings. Since the city owns the land, they can put certain lots up for sale, issue RFPs, accept proposals for those lots, and eventually the developer selected will build something nice. Doesn't the posession of these parking lots give the City leverage in guiding downtown development and growth? If the City sells the parking lots to someone else to operate, it seems to me that the chances of any development ever happening on these lots decreases dramatically, unless the parking lots stop generating profits for the owners, which seems unlikely. Does that make sense?
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Everyone seems to think keeping the lots in the hands of the City is the only way it will get developed. Has the City been very proactive on the previous lots they sold? What developements has the City started with the sale of other lots? Developers (if there are any reading the site) do you perfer to work with government entities or private companies? Would it be possible that some developers would choose not to build on a city lot downtown because they don't care to go through the BS of red tape they may have to go through. As DJL mentions above, out of all the developements going on downtown (now and in the past), how many of them were iniated through private ownerships/companies, verses the City?
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Should the City sell the lots to a private investor, wouldn't that just add one more headache-causing party to the list of groups a future developer would have to deal with? Any future developer will have to deal with the City and all of the approval processes regardless of who owns the property. The one benefit I'd see is that a developer that comes up with an ingeneous or impossible-to-turn-down idea could potentially purchase the land from the City at a discount in order to make the development financially feasible (i.e. $1 sale price for a larger tax-generating project), whereas an investor that owns the land will want a handsome return on its investment.

The fewer hands that are in the cookie jar, the better, IMO.

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I'm not sure the city selling lots at a discount to make a development financially viable is necessarily desirable. It's really a subsidy, and if a development can't stand on it's own I'd question how worthwhile it really is. The free market is very good at setting market prices. I also wouldn't worry too much about the surface lots staying surface lots forever. Third Coast may want to own them and turn a profit on them for now, but I'm sure they'd sell out or develop the lots if there were a more profitable use for them. But please, no more blank walls, I'd rather have surface lots.

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Here's an idea for you DJL, buy land out in the near suburbs like Wyoming, Kentwood, Comstock Park, Grandville, etc. where it is a lot less expensive per acre, build parking lots, and then shuttle people to downtown. I'm betting you'd make a lot more money than the DASH system makes. Or better yet, light rail them to downtown from these suburban lots. Then turn your suburban land into transit-oriented developments around the stations. I can show you city after city where this kind of system works tremendously.
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The proposed S. Division line could be considered a BRT. But then again there are countless different flavors of BRT depending how fully implemented a given system is. They could be something a simple as bus stop upgrades and HOV lanes. all the way to very LRT like ROW's and stations. Division will probably just have upgraded stations and some dedicated bus only lanes.

What you are describing in the first sentence above is commuter, express, or regional bus service, complete with park and rides in the outer fringes of the city and/or metro area. Many larger transit operators offer that type of service as a matter of course. It just makes sense and helps build the market for public transportation which can broaden and eventually lead to a demand for BRT or LRT. What I don't understand is why the ITP doesn't provide such service, at least a few routes, or the commuters of the GR area aren't asking for such service. It's usually an easy, fast, and convenient way to get to work (school) in the central city or other major activity centers.
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The proposed S. Division line could be considered a BRT. But then again there are countless different flavors of BRT depending how fully implemented a given system is. They could be something a simple as bus stop upgrades and HOV lanes. all the way to very LRT like ROW's and stations. Division will probably just have upgraded stations and some dedicated bus only lanes.
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BRT may or may not be associated with commuter/regional bus service. It sounds like the proposed BRT on Division will "just" be upgraded local service. Somehow, The Rapid should be considering how to draw in more riders from the suburbs and, while the agency is at it, make service more appealing to get the communities from eastern Ottawa County to want to join the ITP, as well. It only makes sense to have one transit operator serving the entire GR metro area, at least the area defined as the MPO. Of course, this doesn't mean short-cutting local service within the existing service area, either, or there could be Title VI/environmental justice issues raised.

Sorry, this is probably a discussion for another topic. But if you want to get rid of the DASH lots, park and rides can be set up in outlying areas with direct bus service to downtown and other areas, if warranted.

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I must admit that I have not read this entire thread, so if this has been previously submitted I apologize.

I see the essence of the dilemma being about how we, as a city, handle our public assets, including real property. The idea of a sell off of any city property without substantial public benefit seems nonsensical. A chunk of cash to put in the city coffers does not qualify as a public benefit. What we are talking about has no public benefit, it is merely a land deal. So why would we forfeit the long term value and revenue and, most importantly, control to another entity

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