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$17M cost for parking garage exceeds study estimate

Copyright © 2016 Albuquerque Journal

Albuquerque will spend $17.5 million on the One Central mixed-use development, largely to acquire the parking garage attached to the residential and commercial building – a step, Mayor Richard Berry has said, toward addressing a shortage of parking spaces Downtown.

one-centralBut the city’s own 2016 Downtown parking study indicated a parking structure at the site, at First and Central, is “not required to address forecasted demand.” Should one be built, the study offered a preliminary cost estimate of $5.4 million, less than one-third of what the city will pay One Central’s developer under the terms of the parties’ agreement.

City officials note the report’s estimate assumes a smaller facility: two stories with 166 spaces per floor (332 total), while the One Central garage will have four stories and 423 spaces. Albuquerque Chief Operating Officer Michael Riordan said in an interview that the report also does not reflect the true costs of the project, saying it’s “a parking consultant coming up with a generic number … not a contractor coming up with a real-life number on a specific site.”

The city did not calculate what it would pay to build a stand-alone garage, Riordan said, but has calculated a contribution based on what it will cost to build the garage as part of the mixed-use project and share with developer One Central Operating Associates the expenses incurred to make the site “developable,” including removing a storm drain and a retaining wall.

Officials also say the larger One Central project has community value beyond the garage. One Central also will have 60 apartments above 40,000 square feet of commercial space intended for lease to entertainment, food-related and retail tenants.

“By partnering with a private developer in this project, the City is thinking big picture and long-term so Downtown continues to become the place for New Mexicans to live, work and play. A strong, vibrant downtown is critical to the overall success and health of our City,” Planning Department spokeswoman Melissa Perez said in an email.

One Central will cost about $40 million to develop, and the city will ultimately cover nearly half the cost, giving the land valued at $1.4 million and paying the developer $17.55 million on completion of the garage. The funds give the city an exclusive operating agreement for the garage and the option to purchase it after 10 years for $1,000.

Jerry Mosher of One Central Operating Associates has said that One Central would not be possible without incentives, which also include tax breaks approved by Bernalillo County as part of an industrial revenue bond package. He said in a recent interview that a new Downtown development could not command the type of lease rates required to pay for itself, but called it a “win-win” because this project means more parking in an area that needs it.

Angst over Downtown parking is a recurring theme in Albuquerque. A city-commissioned report created by Wilson & Co. and Dixon Resources Unlimited assessed the situation. The report, completed in February, identified 13,785 publicly available spaces in the Downtown core right now. It also considered future demand based on a series of proposed development projects. The report said, “It is clear … that new parking opportunities are needed.”

The study examined several sites for additional parking opportunities, including new surface lots and garages. It recommended construction of a four-level parking structure at Seventh and Gold, for example, and surface parking at Lomas and Broadway.

But the report found that the existing, 120-spot city-owned surface lot that One Central will replace is “significantly underutilized.” It also said that a parking structure at that location is “not required to address forecasted demand.”

But Riordan contends the lot is used heavily during Convention Center events and is otherwise quiet because there is not much activity in the area. He said One Central will spur activity, as will nearby Innovate ABQ. While the report considered the corner of First and Central as an area separate from nearby Innovate ABQ, Riordan said the One Central garage will serve the budding Innovate project – likely more so than expected, because Innovate has downgraded its own parking plans to 431 spaces from 679. Molina Healthcare, meanwhile, has indicated it might also add more positions Downtown and has asked the city about parking options, he said.

“They have asked us, if they wanted to move another 200-300 employees down here, could we provide parking?” he said. “The answer right now is ‘no.’ The last time they did that, it took up all of our remaining availability.”