PARKING DECK SALE TO PAY CITY DEBT
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The City Center Parking Deck, located at 650 W. 4 th Street in downtown Winston-Salem may soon be sold to a private investor in order to save the city money and increase economic development along the corridor.
At the Feb. 9 finance committee meeting, council members discussed a proposal from Tight Partners LLC to purchase the deck for an estimated $2 million if the deal occurs by April 30. While no specific plans have been made, one of the conditions for the deal is that a mixed-use development must be built no more than 1500 feet from the structure and have a tax value of $12 million. In addition, 37 of the deck’s 730 parking spaces must be available for public use for ten years.
The motivation for selling the deck is to pay off debt the city has incurred during the last 20 years from operations and maintenance costs. The deck currently has a principal unpaid balance of more than $1.8 million. Assistant City Manager Greg Turner said the 10-year rule for keeping some public spaces will help pay off some of the debt.
“That’s what we felt was a reasonable time period to assure that the public’s benefit out of it would extend for the reasonable life of the original debt on the purchase of the property,” he said.
Turner said it is not clear what the adjacent development will look like but the petitioner has also expressed interest in the Holly Avenue surface lot behind the garage.
According to the Forsyth County GIS website, the deck is currently owned by the City of Winston-Salem and has a value of $170,100. The city also owns parking decks near the convention center and at 4 th and Church Streets. It previously owned one under the BB&T building and one between Cherry and Marshall streets that now serves the Embassy Suites hotel.
Councilman Robert Clark pointed out that parking decks generally are not huge profit-producers for the city.
“My suspicion is we never make money off of parking decks,” he said. “This isn’t New York City where you get $20 a day.”
In fact, the city usually makes between $25 and $65 per car per month, according to Turner. Clark said the sale of the Cherry/Marshall deck made sense because it was in “terrible condition” and needed renovations that would have totaled seven figures.
Councilwoman Vivian Burke said she is in favor of selling the garage as long as it is beneficial to the city, but she wants more transparency in the process, alluding to the sale of Bowman Gray Stadium and Joel Coliseum as transactions that were not explained well to the public.
“We’ve sold parking lots and I think what needs to be said to the public is why we sell them,” she said.
City Manager Lee Garrity assured Burke that the city would not be selling the deck if it were making money for the city.
“If it’s better for taxpayers to sell the deck because we avoid the deck cost as well as the operation and maintenance costs we consider selling them,” he said.
Councilwoman Denise Adams said she senses citizens are concerned about the city’s assets and said she supports the proposal “I am one of those people that’s a proponent of selling things like parking decks. I know that they provide parking but if somebody else buys them, contracts them, what it does is hopefully free up some more money that we may need in the fall season,” she said.
Councilman Macintosh said he also supports the proposal because he thinks it will pump some life back into that section of 4 th Street.
“That part of town really has suffered for a number of years having a lack of parking and this would be a big boost,” he said.
Councilman James Taylor Jr. said was slightly more skeptical, expressing the view that it is a worthy investment but a long-term leasing deal would make more economic sense. He and Montgomery had voted against the sale of Joel Coliseum in May 2013 due to confusion over the arena retaining the name despite no longer being owned by the city.
“I don’t think we did everything we could do to turn a profit at the coliseum,” he said. “We sold it. It was something I was against.”
Developer John Reece, managing partner of Commercial Realty Advisors, said the firm hopes to expand its presence to another building on Fourth and the parking deck would be a significant addition.
“We’ve always known at some point we would likely need that deck if we were going to develop anything meaningful on the balance of our property, specifically on the other corner of Fourth and Broad,” he said.
There is currently a surface lot in back of 751 West Fourth and own two other lots nearby, one gravel and one paved.
“Not only if we were to build something larger than this, say twice the size, we would need parking for that building as well we have to replace the parking that we’re currently using for this building,” Reese said. “This has inspired us to try to do something larger there.”
Reese said the Holly Ave lot may be considered a site for a future facility, but they are not currently looking at it.
“That’s not as critical,” he said.
“There aren’t that many spaces there.”
Reese said currently they are in the planning stages for acquiring the deck. He thinks they will likely go before the finance committee next month to answer questions, and that it will then move to the council with a target of having the sale completed by April 30.
“We’d love to have a sister building to 751 West Fourth,” he said. “I think that we’ve done something nice here and we’d like to continue our program. We think we’re creating significant value here, we’ll increase the tax base substantially, and we just want to continue with those efforts, and in order really to do that we need the parking deck.”
Reese was not sure what kind of investors might be interested or how many jobs the new building would create.
“The market will ultimately determine how big it is and when it’ll be developed,” he said.
Clark said he had not known the details of the project before last week, but met with Reece last Thursday. He said the garage often sits mostly empty.
“When we originally built what was Wachovia, now Wells Fargo, signed a lease for 500 spaces,” Clark said. “Now it is my understanding that that lease is up in 2016 and it is also my understanding that they do not use nearly that many parking spaces.”
He said the Fourth Street deck was initially built to encourage development in those blocks of the road. But he said the city receives just $600 of revenue per year from the garage. Weighed against a construction cost of $15,000 per parking space that’s a four percent return on the city’s investment.
Clark added that none of the city’s parking decks are profitable and does not think it makes sense for the city to own the one near the Benton Convention Center either. !