The Vancouver City Council is considering selling a parking garage back to its developer for $3.44 million, more than 20 years after the city originally purchased the structure to boost the economy downtown.
Councilors heard from Community and Economic Development Director Chad Eiken at their remote meeting Monday evening about the plan to sell the parking garage next to Columbia Bank at 500 Broadway. The structure would return to Broadway Investors LLC, its initial developer.
“The garage was purchased by the city to catalyze redevelopment of the lower downtown. That was in 1999,” Eiken said.
The purchase of the garage “was one of several major investments by the city to stimulate development” in the late 1990s and early 2000s, he added.
According to Eiken, a key component of the 1999 deal was a guarantee that Broadway Investors retained the exclusive right to buy back the property, depending on timing and price conditions. Company leaders submitted their official request to purchase the structure back from the city on May 19.
“The garage was not purchased as a district parking asset for the surrounding areas,” Eiken said. “It was always intended to be sold back to the developer.”
While the ivy-covered garage has 233 parking spaces, only 27 are used for public, short-term parking. The rest of the spaces are occupied by employees who work in the two buildings adjacent to the structure — Columbia Bank and The Hudson, a three-story office and retail building.
As a condition of the sale, city staff are requesting that Broadway Investors maintain 25 parking stalls for short-term customer parking.
Currently, Vancouver operates the parking structure at a loss. Between operations, maintenance and debt payments, it costs $291,000 a year to operate, while it brings in an average of $258,000 of revenue per year in daily fees and parking passes, for a loss of about $33,000 per year. The city is also still paying down an outstanding balance connected to the original purchase of $1.35 million.
Revenue from the sale — around $2.3 million, after Vancouver pays off its remaining debt on the structure — would be returned to the City Parking Fund and used for other parking-related projects around Vancouver, Eiken said.
The earlier garage purchase was a product of 1997’s Esther Short Redevelopment Subarea Plan, which saw the city dump millions of dollars into projects that would reinvigorate the downtown and attract employers to the area.
That same plan was the catalyst behind Vancouver’s purchase of the Vancouvercenter garage in 2004; sweeping upgrades to Esther Short Park; and investments in nearby streets, sidewalks, lighting and utility infrastructure.
Eiken said that the then-city council achieved what it set out to accomplish when it bought the garage more than two decades prior: he estimates that the purchase directly resulted in $30 million in private investment because it helped enable the construction and staffing of Columbia Bank and The Hudson.
“It added office workers, residents, retail sales, property taxes — and lastly, the garage will be added back to the tax rolls once it’s sold,” Eiken said.
Councilors are expected to vote on the sale at their next meeting on June 28.