Parking deck costs shift
BY LINDELL JOHN KAY
Tuesday, July 2, 2019
Parking for the Rocky Mount Event Center has been characterized by city officials as either plentiful or insufficient based entirely on the project being promoted at the moment.
Downtown parking concerns date back at least three years when Lige Daughtridge, now a council candidate, raised concerns that 321 parking spaces weren’t enough for an Event Center space of more than 150,000 square feet.
At the time, the city officials countered by citing the 5,000 private and public parking spaces in the downtown vicinity as sufficient. It was also said private citizens would be able to sell spots to help support public parking options, according to meeting minutes.
The same response was repeated as recently as a couple of months ago when the City Council voted to build affordable housing on top of a parking lot on Tarboro Street.
The city commissioned a study from Kimley-Horn in August 2018 to look into downtown parking needs. The report hasn’t been made public.
While the debate over the need for downtown parking is interesting, the real question should be: Why is a parking deck an integral part of the planned downtown hotel project?
The standard process if a city needs parking begins with city officials putting together a proposal, making the proposal publicly available, collecting responses from multiple contractors and then choosing a builder to execute the project, according to a local developer familiar with the process.
With Rocky Mount’s proposed public-private partnership it would be Hunt Services that builds and owns the parking deck with an agreement for the city to rent the parking deck for the next 20 years in an amount equal to the cost of the structure plus interest.
City financial consultant Ted Cole, with Davenport and Co., said the lease “basically acts the same way debt would.”
The city has considered the option of constructing the garage, but the decision at this time is a project inclusive of the parking deck, hotel, retail and residential being simultaneously constructed, said Jessie Nunery, the city’s media relations specialist.
“The tier one hotel flag has stringent requirements and will not commit without control of the parking garage,” Nunery said. “While the city could design, bid and construct the parking garage, there is no guarantee it would cost less. To ensure the city is getting a fair price, the city is engaging a third party to review the garage construction specifications once available and the third party will provide independent pricing. If the pricing is significantly less than that provided by the developer, the city could continue negotiations with the developer or choose not to lease the garage.”
Based on the Draft Development Contract with Hunt Services, there are a lot of potential added benefits for Hunt Services being both developer and contractor.
The 700-space parking deck is estimated to cost $17.6 million, while WGI Engineering in its 2018 Parking Structure Cost Outlook estimated that cost should be closer to $12 million, which places the Hunt Services deck at a cost of more than 30 percent of the WGI estimate.
Included in the development contract are additional fees to be collected by Hunt Services including a management fee of 3 percent, a renewal fee of 4 percent from gross parking sales for the duration of the 20-year contract and the right to claim depreciation tax benefits to offset any of their gains. Hunt Services would also secure 140 dedicated parking spaces reserved for planned hotel.
City officials said the cost of 700 spaces is $17.7 million or $25,357 per space.
“The city is engaging a third party to validate the proposed pricing of the garage,” Nunery said.
Using the total number of 700 spaces doesn’t take into account the 140 spaces exclusive to the hotel and the loss of spaces in the existing lot on which the parking deck would be built.
The cost to create 232 new spaces will be $79,094 each, not including what was already spent on the lots during construction of the Event Center.
Editor’s Note: This is part two of a series of articles on the Rocky Mount City Council’s plan to approve a $18 million downtown economic development project. An important vote on the project is set for July 8.