DJL3CDP

The guys we represented, Todd Radashaw et al, went on to buy the land at 240 Ionia and try their hand down there with about the same level of success (we were not involved in that one). Interestingly, when we put toghter the program for Fulton & Division we did not think the land was worth more than $1.2MM. When the City accepted RSC & Sam's plan at $2.0MM we were unsure of how those numbers could work and clearly they didn't. Hopefully, the delay in closing (which essentially gave them 2 years of free carry) the price cut, the parking purchase subsidy, the brownfield and the DDA goodies will make it pan out. At this point, I don't think any of the other 4 players (Radashaw, Wheeler, Tol, Azzar) would step back in. So this may be the city's last best hope for that project for a while. If things don't work out soon, my guess is that the City will probably just have to do a surface lot for a few years and see what happens next. DJL

I am a big fan of Medical Mile vs the others and even the Honorary name is fine but using it in the address (aka renaming Michigan Street) sounds a bit too suburban office park -ish. Plus, how would we deal with spaces located off of "Medical Mile" I think the VAI does not have a Michigan Street address. I guess we could be like Atlanta and name everything Peachtree. RE: the article...maybe now we'll finally get Trump to come here so he can develop the world's greatest medical building... DJL

So, after you said this a few months back, I went out for dinner downtown, asked for a ticket and apparently stayed too long. Instead of $7, I think I paid like $8. My wife laughed at me and said something like "nice one Mr. Parking." Seems to me that the downtown restaurants & clubs could work a deal with the City on parking discounts...do the restaurant owners not think it is an issue? If parking were free on say Tuesday nights (for instance) would anyone go downtown more? What about if a restaurant validated the parking of you got 50% discount or a free desert or something...? Just a thought...

Got me MK! Last summer, Downtown Chicago Hotel, In/Out was $40 for 24 hours. $26 is a bit more than we pay and there are still parking bargains in GR too (like Dash lots for $25 per month that are within a few blocks of the core of downtown). Sadly, unlike Chicago, we have few options for alternative transportation. When I lived Chicago we took the bus, the El, or the Metra as often as possible (it was faster, cheaper, easier and more reliable). There were lots of routes and transfer stations and things ran pretty frequently. We have the Rapid which is less robust.

I believe that the numbers you quoted did not include the cash that the City put up. But even if those numbers are correct, at $35k per space the things still do not pay out. ($100 per month in profit x 300 month useful life = 30,000 at no interest and assuming the profit is $100). Either way, I think your point about why the thread exists is valid. Look at those pictures and you get shocked at how much surface auto storage there is and how little it is needed/used The city needs the density for humans not vehicles. It is higher density that will keep retailers downtown etc. I think I pointed out before, in other cities, walking 5-6 blocks to park is not that unusual. We are just not conditioned here. And maybe I am wrong but the last time I visited Chicago, it cost me $40 to park overnight. Makes our $10 seem cheap to me...maybe I picked the worst place to park.

I guess I was not clear. For a user I totally understand the value. But at $125 per space in revenue to the City it is hard to justify spending $51,000 to build it. Assuming $25 per month in operating costs (which is way lower than reality), it would take the city 42.5 years to get the lot paid back without interest. Because ramps tend to have a 25 year useful life there is no justfication (financially) for this lot. Honestly, I am not even sure how they will ever repay the bonds and by law if they cannot repay them from parking revenues, the shortfall comes out of the City's general fund. Last time I checked there did not seem to be a surplus there either. Some might argue that this is exactly why we need the City to own the downtown parking. I suggest that this is poor stewadship of our limited government resources and thus exactly why they should not be in the parking business.

I love this thread! Let me hit a couple of issues: 1) The financing issue is not really correct. I was in NYC yesterday meeting with investment banks about this exact issue. The whole idea that the City can finance it for less is simply not true. The initial interest rate of tax free vs taxable is lower but there are so many other factors that go into the financing cost (like the tax rate, amortization period, the spread of taxable to non-taxable, tax deductions, depreciation, leverage factors etc). When taken in total we can finance as low if not lower. I don't want to get into a graduate level finance course but suffice it to say to say that our offer came with a complete plan to pay for it. We had (have) banks, investment banks, etc lined up. The interest rate thing is simple one for people to understand but there is a lot of important stuff that sits deeper in the numbers. 2) If we can find anyone who wants to operate a "for profit" mass transit system that is not subsidized, I say we do it. Unlike parking, there are natural monopoly cost conditions that essentially require that we have a mass transit asset as a public good. Those conditions are not the same in parking. The evidence of that is that in Grand Rapids we already have a number of private parking operators but we have no private mass transit operators (please don't argue about Spectrum's parking buses because those are supported by other revenues). Like the park system, mass transit is a public good and gets financed by millages etc. 3) As for the outlying parking lots that you suggested before GRDad, It is an interesting exercise but this market is not ready for it. As much as we complain about parking, we all want our cars near us. If someone is going to bother driving in from Ada or Rockford, it is probably not worth $25-$50 bucks a month to park at Michigan and Leffingwell vs downtown. Put a light rail that goes the whole distance and you are likely to be more successful. 4) The problem with the current system is it is set up as a subsidy but the rules are not clearly stated and it reeks of "good old boy" behavior. Without taking shots, recent decisions on where to build lots smacked of cronyism (at least to a guy with no skin in the game). There is no parking shortage downtown...only a shortage of subsidized parking. That is why developers are talking to Pam Ritsema. They want her to give them subsidized parking (What a coup if you can get it). The way it appears now is that the decision is not obviously based on economics or best interests of the city. I wonder how the city is going to decide where to build those additional lots. I think the people around those lots will get a benefit that the rest of the city won't enjoy and because it creates winners and losers, the development community is lobbying and the city is picking and choosing. If it were left up to the private market it would be based on economics. With 2 or more players in the market and no illegal collusion the market would be fairly efficient. 5) Parking decks are not as costly as we are hearing. I cannot figure out how they justified that new lot on Commerce. It is very costly. I think the huge lot by GVSU was about $16,000 per spot. I can understand some scale benefits but $51,000 for Commerce seems very high. And at $125 per month, how can one justify the cost? 6) We are not NYC or Chicago. But I think we are similar to Strausburg, France and they seem to have a very nice light rail system. All for now DJL

We have considered an alternate offer. But the truth is that the idea gets a lot of play in other municipalities and sadly it may be too hard to do business here. Heck, today we even had the GR Press take a swipe at us in their editorial suggesting we somehow sought an "end-run." The difference between our offer and the Indian Trails fiasco is as stark as the the difference between the GR Press and the National Enquirer... Anyway, back to parking...methinks that the parking dept speaks with a forked tongue. First they say they exist to support development then the very same day they say no to leasing parking for a new development. They say that parking is a profitable enterprise for the city with an annual surplus and $8.5 million in the bank. Then they say "oh yeah and we can't afford to do more parking to support developers." They suggested that we could not afford the lots (despite the fact that we offered financing letters from multi-billion dollar investment firms) and then said that we offered too little. As I have said, I believe that the City, the Parking Commission, and the DDA should not invest $1 in parking lots...lets have the private sector do that. Instead, they should use the funds to start a mass transit system or to enhance the parks, or other some other quality of life issues. Whew...I feel better.

It is soooo hard to hold my comments back about this parking thing...

Grant the extension in exchage for a non-refundable $25k deposit. DJL