City is offered $1.1M for Main Place Garage
Vancouver will leave parking structure on market until Jan. 7
Monday, December 17, 2012
As part of its plan to get out of the money-losing parking business, the Vancouver City Council is considering an offer to buy the garage adjacent to Main Place office building in downtown.
On Monday, the council was expected to approve the sale of the garage to Main Place of Vancouver LLC for $1.1 million -- a price that has raised questions because the garage has an assessed value of $3.1 million.
On Dec. 3, the council declared the parking garage, 1111 Main St., as surplus property to pave the way for the sale.
However, Tim Haldeman, the city's director of general services, told the council Monday he failed to post a for-sale sign on the garage, a violation of public notice requirements. He asked councilors to set the matter over to January, which they did.
Earlier this year, the council committed to getting out of money-losing parking contracts. City garages and lots lost about $1.97 million in 2011.
The city invested in the garage in 1991 to spur downtown economic development.
Of the garage's 207 parking spaces, Main Place Partners uses 37 for free and leases 131 more from the city. The remaining spots are mostly leased to nearby companies; about 10 are available to the general public.
The garage has operated at a net loss, ranging from $332,930 in 2006 to $63,296 this year, according to a report prepared by City Manager Eric Holmes.
In 2011, the garage lost $128,427.
If the city sells the garage for $1.1 million, $800,000 would be used to retire the debt and $300,000 would go into the city's general fund.
Lloyd Tyler, the city's chief financial officer, said Monday that if the city keeps the garage, the debt would be paid off in 2017. Beginning in 2018, the garage would earn an estimated $80,000 a year. Between now and 2017, however, the garage would lose an estimated $425,000.
Vancouver resident Steve Herman, one of three people to testify during Monday's public hearing, said he doesn't think government should be in the develop
ment business, but since the garage is built and will eventually become profitable, he doesn't think the city should sell it.
Todd Boulanger, a former city senior transportation planner, asked why the city isn't asking more money for the garage. He said he would like an independent appraisal to be sure nothing was overlooked, and a better understanding of why there's such a wide gap between the assessed value and asking price.
Richard Gress, executive vice president of Realvest Corp., which is behind Main Place of Vancouver LLC, told the council that "frankly, someone should have questioned" the garage's assessed value. That aside, "the real value is what someone is willing to pay for it," Gress said.
Gress said Realvest Corp's lender recommended the appraiser, who used the garage's net operating income to come up with the $1.1 million figure. The appraisal was reviewed by Rick Williams & Associates, the city's parking consultant, and by the city's budget office for accuracy, according to Holmes' report.
The Clark County Assessor's Office assessed the land value at $24 per square foot ($546,070) and the garage at $2.6 million, based on the depreciated cost of replacement of a concrete parking structure, said Assessor Peter Van Nortwick.
When councilors questioned the asking price, Tyler said that, as with any business, the key factor in determining market value is how much revenue it will generate.
A tentative date for a hearing to make a final decision about the sale was set for Jan. 7; Gress said the offer to buy the garage will be good through January.
Stephanie Rice: 360-735-4508 or firstname.lastname@example.org.