The Carolina Beach Town Council heard a presentation from Town Manager Michael Cramer during their April, meeting regarding the potential for a public-private partnership with a goal of building a municipal parking deck in the downtown Central Business District.
The Town sent out Requests for Proposals to area companies and could make a decision mid-June on who will get the contract.
Cramer explained, “Back in January during our budget retreat, Council asked that we take a look at doing a public private partnership for a parking deck downtown in our Central Business District.”
Cramer said the Town is looking at Town owned parking lots in the downtown area including, “The property that contains the Palms Lot, the Town Hall Lot in that area between Harper Ave, Carl Winner, Myrtle Avenue and Canal Drive.”
Cramer explained, “In looking at that there are several options out there. We’ve met with a couple of people over the years that have had an interest in doing public private partnerships where they would study, pull together a package, try and find a developer and try and get a mixed use development on that site that would contain public parking.”
He explained the mixed use development could include options such as, “Commercial ground floor, residential on the top floor, the middle floors would be parking deck.”
Cramer explained a parking study conducted last year by the Town’s parking enforcement contractor – SP Plus – suggested the Town will need 300 additional parking spaces within the next three to five years based on increased demand in the downtown area. He explained, “Looking at that we would want to try and shoot for at least 300 or 350 parking spaces that are public and the rest of the parking spots in the deck could be part of the mixed use development.”
Cramer said, “I’ve talked to several folks that do this and they all do it a little bit differently. There are some that will do all of the up-front cost and hope that they find you a contractor and a developer and then they would get 1.5% of the cost of the project from the developer thus the Town wouldn’t have any up-front costs. There are others where you do a little bit of both. You have the up-front costs that could go up to $100,000 for the study and the process to find the developer and then after that they would get 1% of the cost of the development.”
He explained, “There are other private companies out there that do commercial real estate deals in the area and they have some experience in going out and finding developers for certain projects. I’m personally not tied into that group of individuals so I don’t know if they have municipal experience with that or not.”
Cramer provided the Council with a draft for a Request for Proposals (RFP) during the meeting.
He explained, “We’ve gotten several different quotes if you like, or proposals from different folks, on the continuum of ranges. My suggestion would be to send this proposal out and try to get it out on the web, Facebook, to the local commercial real estate folks in the area and see what kind of responses we get for these types of services.”
Cramer explained, “I’ve put together a very short time frame and possibly too short. If I was to issue the RFP May 1st and give them two weeks to get a proposal back, we could select a contractor by June. Have it on the Council agenda to award mid-June at the Council meeting and then start the formal agreement, working on it and starting with the next fiscal year” beginning July 1st.
He explained, “That also puts us in line, that say it turns out that the best company you want to go with is $80,000 up-front, well then I can plug that $80,000 into the budget for next year and work it from July 1st going on.”
Cramer said he estimates a time line for completion of one year and stated, “That’s generally what I’ve understood most other folks that do this say it would take and that is do the studies, have it prepared, get ready, go out and start trying to find companies or developers to do the deal. The question is how long will it take to actually find someone to partner with. So it could take longer than that to find someone to partner with.”
Councilman Steve Shuttleworth said, “Michael I think this is great. I think it’s a great jumping off point. At least it’s going to get a conversation going to see if we are close to being on the mark.”
Councilman Jodan Garza asked, “This is a way of possibly obtaining 300 spots?”
Cramer said, “Yes. With the most attractive return for the Town. Basically we have property, what we don’t have is resources to go up. If somebody has the resources to go up and build and have a mixed use development on our property, they gain, we gain, it’s a good marriage.”
He explained, “Basically the 350 would be the 151 spaces plus about another 150 to get you to the 300 and then a cushion of about 50 spaces.”
Shuttleworth said the number of spaces will likely be a negotiating point explaining, “What we are saying is, we have 151. You guys do what ever you want with the project as long as you give us 350. Now someone’s going to come back and say guys I can only get you 285 but I can do this. Someone else will come back and say I’ll give you 400 but I need extra height.”
Shuttleworth said, “We could find out they come up with an idea we hate or the community hates” but it’s a good starting point.
Cramer explained, “That’s one of the things that’s in the scope of services is that the company has to go out to the public and talk to the public about what they want, what they want to see, things like that and get some community support and buy in for the concept.”
Shuttleworth said, “We as a community and as a Council could put some requirements on them, for example, we could say you have to have some kind decorative skin around it. You can’t just look at a concrete shell.”
Cramer said, “I will send that [RFP] out and see what we can come up with and get some information flowing.”
Council took no official action during the meeting. Cramer will return at a later date once he receives responses to the RFP.
According to the UNC School of Government, “A public private project is defined under the new G.S. 143-128.1C as a “capital improvement project undertaken for the benefit of a governmental entity and private developer pursuant to a development contract that includes construction of a public facility or other improvements, including paving, grading, utilities, infrastructure, reconstruction, or repair, and may include both public and private facilities.” Under the P3 construction delivery method, the unit of government is authorized to acquire, construct, own, lease (as lessor or lessee), and operate a public-private project or facilities within a public-private project, and may make loans or grants for these purposes. Importantly, the private developer must provide at least 50% of the financing for the total cost of the project. The Local Government Commission must approve the contract if it involves a capital or operating lease.