Jacksonville paying millions to cover losses for parking garages

[stjr]

Looks like the City Council had second thoughts soon after the deal was done.  But, apparently, going to see Prince in concert was more important!

Published Sunday, May 9, 2004

CITY NOTES: Council to debate recanting support for parking garages

By MATT GALNOR
The Times-Union,

A City Council battle could break out Tuesday in an ongoing tussle about a $50 million deal for downtown Jacksonville parking garages that the council approved in February.

Some council members want Mayor John Peyton to take another look at the deal and have proposed a resolution asking Peyton to do so. Peyton, who would not be legally bound by the resolution, says contracts have been signed and the deal is done.

The council was supposed to take the issue up at its April 27 meeting, but council President Lad Daniels delayed the vote, mostly because he expected extended debate and several members wanted to leave to catch the Prince concert at Jacksonville Veterans Memorial Arena.

The proposal was approved unanimously in the council's Finance Committee but did not get the required four votes to pass the Recreation, Community Development and Education Committee. Committee members asked Councilman Art Shad, who is strongly opposed to the resolution, to vote for it just to get it out of committee, but Shad refused.

Now, 13 of the 19 members will have to vote Tuesday to take the resolution out of committee, and plenty of debate is expected.

Councilman Warren Alvarez, who along with Daniels sponsored the resolution, says the city is making a 30-year mistake on the garages. Plans call for three garages, two in the sports complex and a third by the new Duval County Courthouse.

As part of the deal, the city will issue $50 million in tax-exempt bonds on behalf of Metropolitan Parking Solutions, which would be responsible for paying off the debt. The city would also make semi-annual loans to the developer so it can cover its debt payments, operating expenses and guarantee the company an 8 percent return on its $3 million investment.

SMG, the company that runs Jacksonville's sports facilities, is paid through concession sales, parking revenue and city subsidies. Some council members said they didn't know at the time of the first vote that SMG estimates it could lose $800,000 annually in parking revenue, which would drive the city subsidy up.

Metropolitan Parking Solutions said that estimate isn't accurate, and Peyton's office said the council had ample time to review the proposal.

"I'm man enough to admit I made a mistake," Alvarez said.

[Timkin]

just shocking ..

[fsujax]

epic failure! i just do not get it. mean while more employers continue to leave downtown leaving more unused parking spaces and less riders on the Skyway. JTA has suffered major losses at its Convention Center park and ride lots for the Skyway.

[Timkin]

It almost seems like Planning for Parking /The Skyway/Etc is on self-destruct,,,,at our expense.

[stjr]

Ron Littlepage nailed this one for the taxpayers.  Peyton, City Council, and company can't say they weren't warned.

Published Tuesday, February 24, 2004

Peyton should seriously question deal for garages

By The Times-Union

Mayor John Peyton already has a nasty blot on his public service record when it comes to building parking garages.

If he's not careful, he could very well end up with some more.

Although Peyton probably wishes you would forget, you may remember that during his six years on the Jacksonville Transportation Authority he had a heavy hand in building the Kings Avenue parking garage on the Southbank.

The $12 million, 1,650-space garage sits mostly unused and stands as a monument to stupidity -- not quite on the same level as the JTA's decision to build the Skyway, but close.

Now on Peyton's table is a proposal to build three more garages: a 1,375-space garage across from the new county courthouse, a 480-space garage adjacent to the new arena and a 1,000-space garage at the sports complex.

The proposed deal is a sweet one, to say the least, for the developers -- Metropolitan Parking Solutions.

The City Council Finance Committee, at the urging of council auditors, took some of the sugar out of the deal last week, but it's still awful syrupy.

Before the Finance Committee changes, the city was going to give MPS the land for the three garages. The city will instead sell the land to MPS for $5.7 million, which is what the city paid for the three parcels.

Considering the city's track record on land deals, that sounds bold, until you read the fine print.

MPS won't be inking a $5.7 million check to the city to fill the hole left when the city paid for the land. Instead it won't begin paying off the debt until the three garages begin making a profit.

And that -- hold on to your hats -- may not happen for 15 years, if estimates in the proposal turn out to be right.

But don't worry. That $5.7 million will be accruing interest while the city waits to get its hands on the money -- at a whopping 2.85 percent interest rate annually.

There are other details in this deal that are likely to leave you sputtering and wondering where you can sign up to get in on this kind of action.

For instance, the city will issue $50 million in tax-exempt bonds that MPS will use to build the garages. For its part, MPS will only put up $3 million in equity.

The kicker is this: While the garages are losing money -- remember that could be for 15 years -- the city will loan MPS money every six months to cover any deficit in debt service and operating costs.

And, oh yeah, the city loans will be enough to guarantee MPS an 8 percent to 10 percent return on its $3 million investment.

MPS will have to begin paying back those loans, again at 2.85 percent interest, once the cash flow from the garages is positive -- whenever that might be.

You might be asking, golly, what risk is the developer taking?

Good question.

But it's more than the financial aspects of this deal that Peyton should be questioning.

The courthouse garage should have a strong enough daily demand to make it workable, but are there enough events at the arena and sports complex to make those garages viable when there's already plenty of surface parking?

And do sports fan attending, say, a Jaguars game really want to tailgate inside a parking garage?

And imagine the fun of everyone trying to leave the parking garages at the same time.

Peyton already is associated with a garage that sits mostly empty. The thought of two more should send shivers down his spine.

ron.littlepagejacksonville.com, (904) 359-4284

http://jacksonville.com/tu-online/stories/022404/opl_14896089.shtml

[stjr]

Good ol' Boys still at work. It's just amazing they keep finding stooges for their scams.  Grand jury needs to investigate.  Can our "representatives" really be this stupid?  Follow the money.

[stjr]

Michael Balanky and his partners Carlton Jones, Toney Sleiman and Mark Rimmer of the Kings Avenue Redevelopment Group, LLC;

Just because we can't find readily available public documents naming partners and stockholders, one has to wonder if all these guys aren't partners in the City garages and the new Landing parking lot just given to Mr. Sleiman.  The plot thickens.

Any city bidder seeking a contract with a non-public company should be required to make full disclosure of all stockholders and partners during the life of the contract.  If this is already done (which I believe it may), Stephen, you should submit a request under the Sunshine Act to request it through the General Counsel's office.  The City is compelled to disclose all its records.

[cityimrov]

Stephan, do you know what people like these truly want?  These people and organizations can make so much more money and gain so more power if Jacksonville turned into a powerhouse city.  

Have they given up on that idea?  What's happening here?  Why are these people leaving so much money on the table?

[Timkin]

Stephan, do you know what people like these truly want?  These people and organizations can make so much more money and gain so more power if Jacksonville turned into a powerhouse city.  Have they given up on that idea?  What's happening here? 

Most people want a great city, these people are just bottom feeders, cityimrov.  But there has been uncertainty and turmoil for the past 5 years.

Combination of the changing of the guard in the older families, and the total collapse of the younger sharks due to the real estate crash and stock market implosion.

Added to that the lackluster vision of the administration, and the toxic bubble of downtown and its been a real downer.

It needs leadership.  Thats all.

WHOLEHEARTEDLY  AGREE!

[brainstormer]

This whole episode is saddening.  Good detective work guys.  Unfortunately no one but a handful of us really care how corruption has really ruined this city, especially the urban core.  Last week Jon Stewart started a segment called "I give up."  This would certainly qualify.  Seriously, "I give up."

[cityimrov]

Stephan, do you know what people like these truly want?  These people and organizations can make so much more money and gain so more power if Jacksonville turned into a powerhouse city.  Have they given up on that idea?  What's happening here?  

Most people want a great city, these people are just bottom feeders, cityimrov.  But there has been uncertainty and turmoil for the past 5 years.

Combination of the changing of the guard in the older families, and the total collapse of the younger sharks due to the real estate crash and stock market implosion.

Added to that the lackluster vision of the administration, and the toxic bubble of downtown and its been a real downer.

It needs leadership.  Thats all.

I'm just amazed how short sighted some people can be - to their own detriment.  With all the land and all the property they own, these guys could be multimillionaires to maybe even billionaires if they just stop looking five feet in front of them and see the wonderful potential this area has.

[tufsu1]

Where's Tufsu when you need him?

designing garages, one assumes

or perhaps at a local organization meeting....you know, volunteering to make the community better!

It is a bit late tonight, so I'll look through this tomorrow and, if need be, respond

[Timkin]

Where's Tufsu when you need him?

designing garages, one assumes

or perhaps at a local organization meeting....you know, volunteering to make the community better!

It is a bit late tonight, so I'll look through this tomorrow and, if need be, respond

[tufsu1]

ok...so here are my thoughts:

1. It sucks that the City agreed to this deal in the first place
2. That said, if the City had built the garages, the cost to taxpayers would have been much higher
3. Things wouldn't have been so bad if the courthouse was built on schedule (like the garage was)
4. Imagine how empty the garages might stay if we made all street parking free w/ no time limits

[ChriswUfGator]

Where's Tufsu when you need him?

designing garages, one assumes

or perhaps at a local organization meeting....you know, volunteering to make the community better!

It is a bit late tonight, so I'll look through this tomorrow and, if need be, respond

Yeah the parking policies you promote & defend have surely made things better alright. For exactly 3 people.

I'm sure Rimmer will send you a "Thanks" from the satphone on his yacht.