Jan
05

All Ears #32

By

Howdy, Hooligans. In order to continue this ongoing experiment designed to provide easier access to government, use this comment thread for all of your municipal questions, suggestions, requests, and dedications.

If you’re curious as to my position on the proposed 51 Biltmore deal, here’s the skinny: I believe we need a multimodal approach to downtown mobility. You’ll find me in opposition to this parking-only solution. I’m hoping that this year City Council will go on to take an unwavering multimodal approach to transportation.

Other thoughts? Please share them. It’s been too long.


Comments

  1. Aaron Sarver says:

    Hi Gordon,

    Have any studies been done by the city or PIP that show we need more parking downtown or is it just assumed we need more parking?

    If there is a study showing the need, and let’s say for argument sake the vast majority of residents wanted more parking, it seems that the city could purchase and build a parking deck of similar scale within a 1/2 mile for much cheaper?

    If the city stepped away from the deal, what would the hotel group’s project look like? (Can the city step away at this point?) I’m wondering if tax money will be subsidizing the hotel as well as parking w/ this project.

    Thanks in advance.

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  2. D.Dial says:

    “I’m wondering if tax money will be subsidizing the hotel as well as parking w/ this project.”

    Of course they’re subsidizing. The question is who do they serve, developers or the community at large????? The land they’re buying is now paying for an $870,000 assessment valuation. The City is shelling out $5,000,000. and leaving out the valuable frontage on Biltmore Ave and S. Lexington.

    This from PARC’s email alert;

    ” Asheville will pay Public Interest Projects $3.11 million for part of the parking lot, but not the air rights, not the portion that fronts on Lexington Avenue, and not the portion that fronts on Biltmore, all of which will remain with Public Interest Projects;

    • Asheville will pay Cascade Mountain Properties $1.45 million for the Hot Dog King property, but again not the whole thing. The valuable part, the frontage along Biltmore Avenue, and the frontage along Lexington Avenue, goes to Public Interest Projects.

    • Asheville will get a hole in the ground where it will build a parking deck, a structure that has to be strong enough to support a six story hotel on top of it.

    • McKibbon Hotels will pay Public Interest Projects $1.78 million for the air rights, and build a hotel on top of the City parking deck;

    • Tens of thousands of dollars worth City staff time has been taken up by the proposal. We have already paid at least $180,000 on options on the properties (that is, we have been paying the Hot Dog King $10,000 per month for the last two years!), and the City has spent $472,000 on appraisals, project management and design for the proposed deck.”

    http://web.me.com/downtown6/Sidewalks/HOME.html

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  3. Gordon Smith says:

    Aaron,

    A recent parking study was done. I spent a great deal of time with the author of the study asking about assumptions and contingencies. The study did not take into account how other modes of transportation or an expanded multimodal transportation network would affect downtown parking.

    The hoteliers have obtained financing based upon municipal support for the parking garage, so they would not likely be able to proceed without the partnership.

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  4. Gordon Smith says:

    This email from Pat Whalen of Public Interest Projects has been circulating, and I thought I’d share it here:

    If you have read the anonymous broadside recently distributed by a local group called PARC against the proposed 51 Biltmore hotel/parking garage project, this is my attempt to set the record straight. This may be much more than anybody wants to know about the project but there are a number of inaccuracies in PARC’s version of this somewhat complicated transaction, therefore:

    1) PARC says the land price is too high.

    The City, Public Interest Projects (PIP), and the hotel developer have been working on this project for over 4 years and it has gone through many iterations, each time changing at the request of the City with PIP agreeing to accommodate their request. We had always taken the position we didn’t want to sell the property, we preferred to keep it and lease it so Julian Price’s heirs (the property owners) would have long-term income. (Note: Sorry, if you don’t know who Julian Price is or the story of downtown’s revitalization from being largely boarded-up and abandoned as late as the early 90′s you need to do some more research for context. Mountain Xpress wrote a story about it last year:
    http://www.mountainx.com/news/2010/081810open-for-biz-a-passionate-legacy )

    (Stage 1) – Four years ago, PIP and the City were going to do the parking garage as a joint venture with both parties sharing in the risks and benefits, but after a few months the deal was changed because the City preferred

    (Stage 2) – A flat ground lease of the property from PIP to the City at $180,000 per year ($30-40,000 less than the annual parking revenues the property generated the last few years). The City was having problems making the cost numbers work because using our site alone would have required the City to do extensive excavations. PIP went out and obtained option rights for the Hot Dog King because our analysis
    showed it would save the City $1.5 to $2 million in excavation costs after paying the cost of the HDK property, therefore we went to

    (Stage 3) – A flat ground lease of the property from PIP to the City at $295,000 per year, which, after paying the costs of purchasing the HDK property, would leave the heirs receiving rent of $160,000 per year ($50-60,000 less than the annual parking revenues generated the last few years). (At this point we had also discovered the City’s appraisal of our property which is large corner lot with 2 corners was much lower than both the appraisal and price paid per square foot by the HDK owners for their much smaller lot with less than 1/6 of the street frontage.) Nonetheless the City was still having problems making the cost numbers work so we did an analysis of the cost to the City of the Stage 3 lease approach versus selling the property to them at an appraised value more in line with what our neighbors had just paid for their property plus the capital gains Julian’s heirs would have to pay for accommodating the City yet again by selling when our plan had always been to lease the land. We saw after this analysis that even after paying a price which covered the capital gains taxes the City would be $1-$1.5 million better off buying than leasing (because the City can borrow money much more cheaply than commercial land lease rates) so PIP agreed to

    (Stage 4) the current contract for purchase which PIP has honored and allowed extensions on now for 2 ½ years.

    2) No one is making anywhere near the “profit” PARC suggests because, unfortunately, tax values don’t have anything to do with what we (or our HDK neighbors) actually had to pay to buy, finance, and pay carrying costs on the properties over the years since acquisition.

    3) PIP is not retaining “all the valuable frontage on Biltmore Avenue.” The garage will use the footprint of all the property up to the Biltmore Avenue property line. The hotel will then have approximately 80% of the Biltmore sidewalk frontage but they have agreed to make most of that available to retail/restaurant businesses. We will have a very small parcel left along the frontage of the Hot Dog King amounting to a little more than 1/15th of an acre. We do get 80% of the Lexington Avenue frontage but its only 30 feet deep and encumbered along its whole length by power lines and a Progress Energy easement so we’re not sure yet how to make practical use of it. We assume PARC got its $1 million valuation for these parcels from Cecil Bothwell’s guest editorial in Mountain Xpress back in September. So we’ll be glad to make them the same promise we made to Cecil in our reply article. We’ll be glad to sell those outparcels to PARC for 2/3 of that price if they’ll make the same promise we did, to use it to build workforce housing.

    4) Cascade Mountain is making a little over a 5% return based on what they paid for the Hot Dog King property after holding it for approximately 4 years while the City and the hotel developer went through the arduous process of obtaining project approvals and financing.

    5) The hotel developer is paying all the structural costs of beefing up the garage to hold the hotel and if there were no hotel the City would have had to spend substantial additional public monies building
    its own liner building on Biltmore Avenue as required by the City’s own ordinances.

    6) PIP has saved the City substantially more than the purchase price for PIP’s property by: restructuring the deal numerous times to accommodate the City, obtaining rights to the Hot Dog King property, and patiently waiting through all the delays thereby allowing the City to take advantage of huge, economy-related construction cost savings.

    7) Public Interest Project’s is not getting any cash from the transaction. The net cash generated will be used by Julian Price’s heirs to retire the debt incurred paying Julian Price’s estate taxes because all his assets were tied up in its downtown revitalization efforts over the last 20 years. Julian’s heirs won’t be getting any cash either.

    8) Other than meter parking, neither the City nor the County provide any public parking spaces in the entire area of downtown south of College Street. The City and the County provide approximately 1,500
    public parking spaces in four parking garages north of College Street. Through this project the City will provide about 350 new public parking spaces for this area (on average, after projected actual use of parking paid for by the hotel at regular rates). This number of spaces, although much less than recent City parking studies have shown this area needs, represents a long-promised and patiently-awaited big
    step towards solving this area’s parking problem .

    9) In Mountain Xpress’s “Best of” issue for 2010 the No. 1 complaint about downtown was, “needs more parking”.

    10) Parking garages pay for themselves over time then become revenue streams for the City, just as PARC points out the other garages have done. Unfortunately neither transit nor sidewalks generate revenue so
    banks won’t loan money for them. The City can choose to use the parking and tax revenues generated by the hotel and the garage to subsidize transit and sidewalks without needing to raise overall tax
    rates. However, study after study has shown that biggest contributor to cost-effective transit and cost-effective infrastructure improvements (like sidewalks) is DENSITY. And the 51 Biltmore Project
    is clearly a great alternative to suburban sprawl, more highway motels, and more acres of suburban parking.

    11) The PARC broadside takes a very dismissive attitude toward tourists. It’s nice that PARC’s anonymous spokeperson can afford to cavalierly dismiss all the hard-working locally-owned businesses for whom tourist spending spells survival. Is there something intrinsically wrong with being a tourist? How many contributing members of our community (or PARC) came to Asheville first as a tourist? Our local businesses make Asheville a distinctive and attractive destination for visitors, retirees and families looking to relocate. They provide thousands of jobs and put their energies and their resources to work in and for this community. Hopefully the members of PARC will enjoy taking their friends to the chains on Tunnel Road once the great independent restaurants downtown go under.

    12) PARC: “The least environmentally friendly way to spend this money is on bringing more automobiles into the city. Adding more cars downtown just adds pollution, noise, and gridlock. Spending this money on parking is the worst choice for our environment.”

    Actually the worst choice for our environment is failing to add downtown parking. Density encourages walking. Visitors to downtown park and walk. Suburban-style shopping means driving from one big box
    or strip mall to the next. There is typically much more traffic on Tunnel Road than downtown because downtown encourages pedestrians while Tunnel Road (and Patton Avenue and Hendersonville Road)
    encourage driving and discourage walking. Dismissing the parking needs of downtown will result in frustrated visitors driving around and around looking for parking then, after tiring of the hassle, joining
    the happy hordes stuck in traffic on Tunnel Road waiting for the chance to park on some of those hundreds of acres of apparently environmentally-friendly parking lots.

    Thanks for reading.

    Pat Whalen
    Public Interest Projects

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  5. Dixiegirlz says:

    Thanks for the rebuttal info Gordon…..next week should have a lively discussion on this issue. Look forward to attending.

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  6. Gordon Smith says:

    Dixie,

    The Public Hearing has been delayed due to an error in publishing the announcement. Looks like the 25th for the 51 Biltmore issue.

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  7. D.Dial says:

    Cecil has written a compelling argument against the Cities involvement in the 51 Biltmore project. See todays ACT.

    Rate this comment: Thumb up 2

  8. Chris D. says:

    I don’t have any major policy requests, but I was wondering if council could hold a special southside “outreach” session at TC Roberson or the Biltmore Park YMCA sometime. Sure, you’ll get a lot of annexation griping, but–if we orient it toward current city residents in Skyland-Arden-Biltmore Park–I think it would go a long way toward showing that council wants us to feel a part of Asheville, too. I’m amazed at the number of neighbors I meet who don’t even know they’re in the city limits. If council doesn’t assert its interest down here then the pervasive right-wing notion that we are just a tax colony for the uptown liberal crowd will carry the day. Just an idea.

    Rate this comment: Thumb up 2

  9. Gordon Smith says:

    Chris,

    We’ve got a City Council meeting scheduled later this year in S. Asheville. This ‘roadshow’ has been to east Asheville and Livingston St. so far. This year we’ll come south and west! More details to come.

    Rate this comment: Thumb up 1

  10. Tom Sullivan says:

    The excavation savings got my attention. Crudely (very, very crudely):

    $2 million in extra excavation costs to city divided by 350 new public spaces (per PIP) = $5714 extra per space.

    Rough comparison (apples and oranges) with what that would have added to the $17,000 per space cost of the new county deck ($17,000 + $5714)/$17,000 = +34%

    vs.(assume Cecil’s 220 “net” number is incorrect and use PIP’s 350 number): ($14,800,000 + $2,000,000) / 350) / $17,000 = +282% per space cost at 51 Biltmore over the county’s lot.

    It’s been a long week, I’m hungry and I probably screwd that up, but the excavation savings don’t look like much in the way of savings.

    Rate this comment: Thumb up 2

  11. Joe Minicozzi says:

    Tom:
    Good thinking, but bear in mind that the County’s deck is a stand-alone deck that is all above ground. It also yields us tax-payers $0 in payback because there is no contributing tax base on that site. its all publicly owned… ie: no revenue other than the payments for parking.
    Add to that, that the 51 Biltmore is designed on a site that has about a 14′-18′ drop to it from high-point to low-point, and you’re getting into grading activity on the site (more costs) that the County didn’t have.
    Finally, when you enclose a parking structure inside another building, there are building code requirements for a ventilation system to have air exchanges within the building to ventilate it. Which drives the cost up some more. Don’t hold me to this, but I think the ventilation system costs somewhere around $100k. There’s also other items shoved in the building that drive the cost up, such as a large utility box inside the structure. This is not exactly a sexy thing to talk about, but when you have the aesthetic discussion on the building, there’s a cost to hiding the utilities as well. That goes into the cost of structure.
    You are right. It is apples to oranges. Its difficult to compare a stand-alone deck with an enclosed one, but you are putting good thinking out there. Assuming we use your numbers above, I would ask the audience, is a 34% increase in a cost of space (that will probably be reflected in the cost the user pays when they park) worth getting a hidden deck PLUS the tax revenue from the Hotel, retail, restaurants, and 2 different housing projects that will be on the site a better project than a stand alone deck with no tax revenue?

    The other caveat to the above is that the 51 Biltmore project is required to be shielded (only at the ground stories) by other uses, so to some extent, the extra expenses in that project are because of the extra requirements. Anyway, I like what you’re thinking about.

    Joe

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  12. Tom Sullivan says:

    Welcome, Joe.

    It is clearly apples and oranges. I tend not to take figures at face value and immediately pull out my calculator and start juggling numbers. And no way do I take preliminary cost estimates at face value. (I was doing construction support for a large, high-pressure project a few years ago that was $40 million — in the RED.)

    The tax revenue will clearly impact the payback. The question is compared to what else the city might need to spend $15 million on in this tough economy. Plus there’s no guarantee such development projects succeed or go forward as planned (if ever), as I observed here this week. When the government is the sole proprietor of a parking deck, it’s one thing. Should private partners go belly up with a half-finished, over-budget hotel sitting on top of a public parking deck it would be, as we say in my business, embarrassing.

    With so many players involved, there are risks to go with the projected revenues, and those are factors Council was elected weigh on our behalf when committing public money.

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  13. Dixiegirlz says:

    “Should private partners go belly up with a half-finished, over-budget hotel sitting on top of a public parking deck it would be, as we say in my business, embarrassing. “

    There is no guarantee those hotel rooms will be filled. I’m frequently traveling by Hotel Indigo…and rarely does it look even close to full capacity. Indigo’s high end condos are now being advertised as time share units. So occupancy of yet another “boutique hotel” is no given by any stretch.

    http://www.insidethegate.com/2010/08/luxury-private-residence-club-launches-atop-hotel-indigo-downtown-asheville/

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