Thursday, September 29, 2005

Is Pineappple Square a Square Deal?

Apparently the Isaacs want the city to give them the State Street parking lot along with that portion of State St between Pineapple and Orange. In return the city will get 350 public parking spaces.

The city is currently negotiating with the Isaacs to see if a “deal” can be made. The city has decided to bypass their original decision to issue a “Request for Proposals” for the State St lot from interested developers that would include 350 public parking spaces on that site along with retail and stay within the new downtown code requirements. Since rescinding this decision, the city decided to instead negotiate directly with the Isaacs to see if an agreement could be reached.

Save Our Sarasota would like to make sure that the city considers the following issues in this negotiation process. Too many times in the recent past, problems have resulted in the “public-private” partnership proposals and the use of TIF funds. We would like assurance that all issues are fully accounted for prior to completion of negotiations.

Currently the city has 137 parking spaces on the State St lot. For comparison purposes, what would it cost the city to build a parking garage and add 213 spaces?

The appraised value of this lot (for” highest and best use”) is reported at $8M. There is discussion concerning the value of the requirement for 350 parking spaces, e.g., what is the cost of these required spaces and therefore what is the residual vale of the lot. A figure reported in the SHT is $7.2M as the cost of the parking spaces. (or $20,571 per space). The appraiser also has indicated that with the requirement that the parking be provided, the value of the lot is $6.4M. How the math works here is anyone’s guess.

We would suggest that the city go back to the RFP process and determine what anyone, including the Isaacs, would be willing to give for this lot. Make this an open process, not a closed negotiating process ending with a take or leave it “term sheet”, with the developer saying if you don’t take it now, the window of opportunity will be gone.

An alternative would be to auction the lot, unencumbered, to the highest bidder (minimum bid is $8M) and use these proceeds to build 350 parking spaces near by. Some could be included in Pineapple Square if the developer and the city can agree on the quantity and price.

Currently the city has approximately 17,800 parking places downtown, with a peak usage of 10,900. This leaves 7000 excess parking spaces. Why do we need 350 public spaces inside of Pineapple Square? This will surely be a big benefit to the Isaacs, but what is the benefit to Sarasota. Remember we already have the 137 spaces in the State St lot, and there are spaces on that portion of State that could be vacated. What is the justification for 350 spaces inside of Pineapple Square?

Apparently the Methodist Church has negotiated for approximately 300 spaces for their use as part of the deal that allows the Isaacs the use of Methodist lot on State. Possibly the city could negotiate with the Methodists to use some of their parking during time when the Methodists are not using the full 300 spaces.

The questions are how much parking does the city really need? Where is it needed? What would it cost to fulfill these needs? A Downtown Parking Master plan has been completed but not yet discussed, debated or accepted. We open processes to discuss and answer these questions. It is not good practice to listen only to one developer’s proposal.

If the city moves forward with the Isaac’s negotiation, we would like to see an accounting of alternative concepts for the state St lot. For example, what would be the benefit to the city, say over 20 years, if this lot were sold and it was developed with condos (and met all downtown code requirements). The cost of finding parking spaces could be calculated. Then the resulting economic benefit to the city could be compared to the Isaac’s proposal. In all business investment decisions, many scenarios are evaluated to assure the best value. We cannot understand why the city would not consider alternative scenarios when evaluating the Pineapple Square proposal.

Then there is the street vacation question. Or, as the Isaacs would like it to be thought of, as an “easement for pedestrian travel”. The questions here are:

Will the entire street be used for pedestrian travel, or will buildings occupy the edges of the current street?

And what about the air space above the street, will this be given to the developer or will he have to pay for its use?

Using the square footage of this street section (13,583 sq ft) and the State St appraisal value ($164/sq ft) gives a value of $2.2M. It seems inappropriate to give this away.

We would like to see a full accounting of the economics of this deal and hope a fair value can be secured for the city, not a lopsided deal.

1 comment:

Anonymous said...

Your numbers for the parking spaces, although correct, are mostly in private lots....that doesn't help me one bit..these folks that own these buildings and lots won't let the city use them so I say build us some parking...I don't care if it's Pineapple Square or not...and the RFP process hasn't worked so far..Palm Ave...why try that again