Increasing parking permit fees is still on the table after the board’s Buildings, Grounds and Sites Selections Committee meeting June 12.
Temporarily rejecting an increase in parking fees to fund a proposed $20.73 million parking garage, the committee will consider a revised minute order July 17.
The committee instructed staff to pursue “internal financing,” which could include raising parking fees, to finance the garage as part of a public/private partnership development between this college and the Tobin Hill Neighborhood Association.
Additionally, a presentation by Jim Plummer, a partner in Fulbright and Jaworski LLP, revealed some of the risks for the college in a public/private partnership, including losing the land in case of foreclosure.
The public/private partnership was first proposed at a committee meeting Feb. 16, 2010.
A district administrator said Monday that increasing the fee for parking in garages could still be considered.
“Nothing is off the table at this point,” Pamela Ansboury, associate vice chancellor of finance and fiscal services, said.
She said the minute order was changed to identify the intent to provide internal financing for the project in lieu of accumulating more debt by issuing revenue bonds.
Ansboury said she is not aware of a concern for increasing parking permits on top of a 3 percent tuition increase effective in the fall because the committee did not address that.
The board voted to approve the 3 percent tuition increase May 5. For in-district students enrolled in six or fewer hours, that means an increase of $14.
The review of parking permits provided in the agenda packet included a recommendation to develop a “garage only” permit for reserved or guaranteed parking in a designated garage.
Plummer said the agreement calls for leasing out excess parking garage spaces.
“In order to make this work, you have to capture every source of revenue you can capture truthfully and so we do capture that,” he said.
The parking garage would have 961 parking spaces, of which 378 spaces would be available for students during the day and commercial use at night. The other 583 would be reserved for residents and commercial use.
“It was always clear that you would have to contribute some sort of student parking fee to make this work,” Plummer told trustees.
He said the response to a request for a proposal from Balfour Beatty Capital of Newtown Square, Penn., indicated a need for a portion of the student parking fees, and the board was told in May 2011, but there was no cost determined for the parking garage to determine a change in fees.
Plummer said the lowest cost plan was for the district to issue revenue bonds to finance the garage.
“There’s not a good way to finance this parking garage on a private basis because your equity needs become so high, your rates, which you would have to charge, escalate to a level that would simply not be acceptable,” Plummer said.
Along with the parking garage comes a $30 million price tag on apartments.
Tobin Hill Lofts will be a four-story, 226-unit residential development at North Main Avenue and East Laurel Street, Plummer said.
The groundbreaking for the Tobin Hill Lofts has to be before Aug. 31 because the mezzanine financing, $6.7 million from Virtus Real Estate Capital, has to be spent starting in August, Plummer said.
In addition, Broadway Bank is lending $20.5 million for construction.
He said the ground level commercial frontage includes a fitness room; leasing center; study and entertainment areas; the Ricardo Chavira Screening and Seminar Center; meeting space for the Tobin Hill Community Association; and 12,000 square feet of leasable space, with Luther’s Restaurant as anchor tenant.
President Robert Zeigler said today that Chavira, know best for his role as Carlos Solis in the television series “Desperate Housewives,” wanted to donate a screening center for use by this college and the community.
He said there has been no planning so far on ways the center could be used.
The district will not benefit from revenue generated by the apartments for the first six years because all cash flow will be directed to Virtus to repay the $6.7 million loan, Plummer said.
District 6 trustee Gene Sprague asked if the six years assumed full occupancy of the student apartments.
Plummer said 87 percent occupancy was assumed.
He said one of the benefits of the project is the partnership serves as a model for the district to finance new projects.
“The public/private partnership is made up where the developers or third parties put their assets at risk … and you will put some of your assets also into the mix,” Plummer said.
He said another benefit is that an additional parking garage would attract an increase in student enrollment.
Plummer said although the apartments would serve as a source of revenue, the land could be lost if the project is not successful.
“Over time, this apartment project will also significantly, we hope, generate revenues for your benefit,” he said. “The risk of the project is that you could theoretically lose the land that you put into this transaction.”
Plummer said if the project is unsuccessful, the parties who lend money to put toward the project could foreclose on the district’s land.
“That means that you could have a third party running an apartment project right on the border of your campus,” he said.
Plummer said because the district will be part of an ongoing commercial operation, the district could be sued.
“We have structured this in a way to minimize your liability, but my brother lawyers sue everybody,” he said.