In Our View: Garage Deal Stuck in Park
And that's a good thing if it keeps taxpayers from being sold short on parking structure
Thursday, December 20, 2012
Because a few too many questions remain unanswered, it is a good thing that a quirk has delayed the City of Vancouver's sale of a downtown parking garage.Here's a quick rundown of what we know:
• The city is looking to get out of the parking garage business because, frankly, business is lousy. In 2011, the city lost about $1.97 million on parking garages and lots.
• Among the properties it is looking to unload is a downtown garage at 1111 Main St., adjacent to the Main Place office building. Main Place Partners currently uses 37 parking spots for free and leases 131 spots from the city, while 10 are available to the public.
• The garage last year operated at a loss of $128,427. This year, the deficit will be $63,296. If the city retains the garage, the debt will be retired in 2017, with a loss of $425,000 between now and then.
• The site has an assessed value of $3.1 million.
• The city was prepared to sell it to Main Place of Vancouver LLC for $1.1 million.
• On Monday, Tim Haldeman, Vancouver's director of general services, informed the Vancouver City Council that he had failed to post a for sale sign, in violation of public notice requirements. Haldeman requested that councilors set the matter over until January (they don't meet again until then), which they did.
In a comment on Columbian.com, Clark County Assessor Peter Van Nortwick explained that Main Place of Vancouver LLC has a significant leasehold interest on the property, which would lead the site to sell for below the assessed value.
Still, questions remain about the projected value and the projected selling price. While we don't expect the city to explain the ins and outs of every transaction until every member of the public is in agreement, we do think citizens deserve a bit more of an explanation in this case.
The numbers that jump out are the $3.1 million assessment and the $1.1 million selling price. How were these numbers derived? Is no potential buyer willing to offer more money?
As with any transaction for any commodity, assessed value can be a misnomer. In truth, value is defined by what a buyer or buyers are willing to pay. Your home might be assessed at $250,000, but that doesn't matter (except when it comes time to pay property taxes) if you can't find a buyer willing to pay more than $200,000. You might not think that a gallon of gas is worth $3.39, but if enough people are willing to pay that amount, then it certainly is worth that much.
In addition, there are questions about the competence of those engaging in a million-dollar deal in which the lack of a for sale sign can delay the project. We would expect a little more attention to detail from city officials.
Still, we trust the delay in the sale of the parking garage next to the Main Place office building will be beneficial to the city -- and therefore the public. If officials have been so eager to sell the facility that they have not properly sought and vetted potential buyers, then they have risked selling taxpayers short. One offer does not determine a site's true value.
It can't hurt for the city to further consider its options, to seek additional offers, and to ensure that a sale price of $1.1 million reflects the best possible deal. In the meantime, there are some questions that could be answered.