The city has invited interested buyers to submit proposals for acquiring the Fillmore Drive parking lot, but it’s unclear how garage construction may affect any sale price.
City commissioners said they are disinclined to approve a deal in which the city sells a St. Armands Circle parking lot to a private developer and ends up owing that developer money at closing, but officials remain open to hearing offers for the island property.
The commission reviewed some details surrounding its consideration of the sale of the Fillmore Drive parking lot on St. Armands at a meeting Monday. Although the city has not received a formal offer to buy the property, developer JWM Management has expressed its interest in acquiring the land to build a project that includes a hotel, grocery store and residences.
That proposal also included converting 270 public parking spaces in and around the Fillmore lot into spaces in a garage incorporated into the project. In a Sept. 22 memo, City Attorney Robert Fournier said staff anticipated JWM Management would ask for the cost of constructing that garage to offset the purchase price of the land. At a valuation of $30,000 per spot, Fournier said that could produce an $8 million credit against the cost of buying the 1.98-acre site.
In an extreme circumstance, if the appraised value of the land was less than $8 million, Fournier said it’s possible such a deal could result in the city owing money to a developer. Fournier said he anticipated such a scenario would be unacceptable to city officials, a sentiment multiple officials affirmed at Monday’s meeting.
“I can’t imagine somebody would come in and say, ‘We want you to pay us for the lot,’” Alpert said. “If they can’t come up with a better plan than that, it probably wouldn’t go through.”
Fournier said any development on the Fillmore lot site could not reduce the number of parking spaces without running into issues with the bond used to pay for the Adams Drive parking lot on St. Armands, financed using revenue from paid parking. City Manager Marlon Brown indicated paying to retire the bond and nullify the applicable restrictions prior to 2027 would be cost prohibitive.
“We have to find some way to come up with $16 million,” Brown said. “I don’t have that money.”
Fournier’s update on parking-related financial questions didn’t change the commission’s stance on the prospective sale of the lot. In August, the commission voted 4-1 to affirm it was open to private offers to purchase the property, declining to initiate a formal solicitation for proposals. Mayor Hagen Brody said the absence of any actual negotiations with interested buyers meant there was no need for the city to take any action.
“We have to wait and see what happens because of the situation we’re in,” Brody said.
Brody said it was good for interested parties to be aware of the unique dynamic associated with the potential purchase of the Fillmore lot. Fournier said he felt it was good for city officials, too.
“Now that it’s been brought up, you’ll be in a position to ask about it if you’re presented with an offer,” Fournier said.
As the city ponders the future of the Fillmore lot, some Circle property owners have reached out to the city to advocate for their interests. Scott Macdonald, owner of Crab and Fin restaurant, sent an email to commissioners Oct. 2 noting that an assessment on St. Armands commercial property owners in 1996 facilitated the purchase of the land that became the Fillmore lot. Macdonald said that funding agreement underscored the importance of parking in and around the Circle, and he expressed hope any development on the Fillmore site would increase the supply of spaces.
“If a project like this gets approved without additional parking, we will be going backward in our parking needs after having self-taxed ourselves for the past 25 years,” Macdonald wrote.
During Monday’s meeting, Brody said he wanted the city to be mindful of the contributions St. Armands property owners have made toward public parking projects in the area.
“I just want to make sure we’re treating them fairly out there, as it is a very important part of our economic engine in the city,” Brody said.
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