TERRE HAUTE —
Faced with a projected 23 percent reduction in property tax revenue this year, Terre Haute Mayor Duke Bennett is seeking to sell the city’s first downtown parking garage, located on Wabash Avenue.
The city’s Board of Public Works and Safety last month approved to offer the 453-space parking garage for sale in a bid process, with a minimum bid of $500,000. The $3 million garage was dedicated in 1988.
The sale is to be to the bidder with best bid, not necessarily the highest bid, according to the bid specifications. Factors include the proposed use and economic impact of the property, according to the bid specifications.
Bids are being accepted until 4 p.m. June 8. The bids will be open and available for public inspection by the Board of Public Works at 4 p.m. June 9 at City Hall. A decision on whether or not to accept bids will be announced at a 4 p.m. June 16 meeting of the Board of Public Works and Safety at City Hall.
However, the sale is drawing some criticism from a Terre Haute city councilman and member of Downtown Terre Haute Inc. for the city’s lack of communication in seeking to sell the property.
“It seems remarkably shortsighted to me,” said Todd Nation, owner of BookNation downtown and District 4 representative on the City Council. “The neighborhood around it benefits from public parking and privatizing the garage is a step that we should not take lightly.”
Nation said Downtown Terre Haute Inc. members rent more than 70 spots for business owners and residents/owners of downtown businesses to keep vehicles off city streets so those parking spots can be used by customers.
“By my reading of this offering, it would be easy for a new owner to price out people in the neighborhood or others who want to park there. The availability of inexpensive, convenient parking on this block for everyone has value,” Nation said.
“To have us seriously exploring the idea of selling off this asset with no communication with its tenants and no communication with the neighborhood that it serves is the wrong move,” Nation said.
Cliff Lambert, executive director of the city’s Redevelopment Department, acknowledged that the action was taken without discussion among downtown business owners. Lambert, who was part of the city’s redevelopment commission that built the garage, said it was originally intended to be converted to the private sector.
“I think it makes all sense in the world to reduce our operating expenses” by selling the garage, Lambert said.
“It is genuinely at this time excess government property. I think local units of government have a need to act as catalysts in energizing and investing in economic development activities,” Lambert said. “I also think there comes a point in time when that catalyst activity has been successful, the local unit of government should attempt to step back and let the private sector do what the private sector does best.”
In addition, Lambert said money from the sale will be used “toward the long-term financial strategy to satisfy the Cherry Street facility fund obligation,” Lambert said.
The $14.5 million Cherry Street Multi-Modal Transportation Facility, with 628 parking spaces, was constructed with $8.9 million in federal funds, with the remainder from bond anticipation notes from two Terre Haute banks, Lambert said.
Lambert said the city is now negotiating with Indiana State University for a 10-year lease of about 300 spaces at the Cherry Street facility. The university seeks to have the spaces for its Scott College of Business once it moves into the former federal building, catty-corner from the multi-modal facility.
Indiana State leases the ground for the facility at $1 a year under a 40-year lease, Lambert said. That lease term is what is considered by the Federal Transit Administration as the useful life of the multi-modal facility, Lambert said. After the lease expires, the land and garage revert back to ISU, Lambert said.
Mayor Bennett said because of a projected $6.4 million – 23 percent – reduction in property tax revenue this year, the city has “to refocus what city government does because the money that we have will only provide the basic services. We have to get back to the core basic services.”
Bennett said the parking garage has ongoing maintenance costs and operates “at a small loss each year. The sale will allow us to free up some of our resources it takes to manage that.
“Most public garages are privately owned and are not done by the city. That is a trend that passed us long ago. We are just trying to look at every single thing that we are doing and reduce any expenditures that are not the core business of the City of Terre Haute,” Bennett said, adding that core business is police and fire protection, roads, parks and the sanitary system.
Bennett said the city last year projected revenues of $97,000, with expenses of $148,000, for the parking garage on Wabash Avenue. However, the garage ended the year with $79,000 in revenue and $92,000 in expenses. “We lost about $13,000, which was much less than projected, but that was because we made some staff changes,” the mayor said.
“The sale will allow the garage to be put on the tax rolls and that will be a significant increase to the property tax base,” Bennett said.
Bennett said even if the city were to raise its parking rates, it would still face an ongoing cost of maintenance and would have those costs for two parking garages.
“I prefer it to be a parking garage and think anyone who would buy it would do that,” the mayor said of the sale of the Wabash Avenue parking garage. “We want to negotiate to have public access parking spaces in it, whether all of it or part of it,” the mayor said.
“We don’t have to accept any of the bids, we are just testing the market here,” Bennett said. “My guess is people will come in over [the $500,000 minimum bid] and we will just look at the higher bidder and decide whether we want to sell it or not.”
Howard Greninger can be reached at (812) 231-4204 or firstname.lastname@example.org