Council approves plan for beach parking garage

— The city council voted Wednesday night to move forward with trying to buy spaces in a parking garage proposed behind Pelican Walk Plaza.

Paradise Group, LLC of Safety Harbor is negotiating to buy the retail-dining center at 483 Mandalay Ave. and the adjacent parking lot along Poinsettia Street. If the sale goes through, the company wants to build the seven-story, 642-space garage on the existing lot.

A “yes” vote by the council allows city staff to negotiate with Paradise to purchase 450 public spaces in the garage for $11.3 million. The proposal to build the garage still has to go through the usual site plan and development agreement reviews.

Revenue from the city’s parking fund reserve would be used to buy space in the garage. Those proceeds are from money fed into parking meters and paid in fines. The city generated nearly $4 million last year on 2,637 beach parking spaces.

The council was set to vote Wednesday night during the regular bimonthly meeting that was rescheduled from tonight because of high school graduations.

Rod Irwin, assistant city manager for economic development, told the board during its Monday work session that the proposal “achieves a public purpose. The East Shore/Mandalay area is becoming a more urbanized district, and it’s going to have more demand for retail and employee parking use.” The plan “proactively” addresses that concern, he said.

Council members Bill Jonson and Hoyt Hamilton addressed opposition raised by nearby residents and business owners who say the parking garage will create more traffic congestion, spoil the view and use taxpayer dollars to subsidize what should be a private venture.

One worry is that beachgoers will use the west end of Baymont and San Marco streets as a drop-off point before parking in the garage, Jonson said.

Baymont Street primarily is used by Sandpearl Resort employees and guests and those living at Sandpearl Residences. San Marco Street primarily is used by Mandalay Beach Club residents.

Hamilton said the proposed garage “is not convenient for beach access. This area has no amenities, such as showers to wash off or restrooms. … It will mainly serve the business district of Mandalay.”

Hamilton also stressed that, contrary to rumors, no property tax dollars will be spent to secure space in the garage.

“The city is fortunate that it has enough money from parking revenues to invest in this project,” he said.

The deal with Paradise Group wouldn’t go into effect until after June 30, 2016, when an agreement the city has at another parking garage expires.

L.O.M. Inc. built that structure on Coronado Drive, and the city rents about 400 of the 750 spaces there. Under terms of the 2010 agreement, the city is obligated to buy the parking garage for $9.3 million from the lender if the developer defaults the financing agreement within five years of the project’s completion on July 1, 2011.

The release of that money, along with $2 million from the city’s parking fund could cover the city’s cost of acquiring parking in the proposed Pelican Walk garage, Irwin said.

An alternative, he said, would be to issue bonds secured by projected revenue generated from parking fees.

Hamilton noted that some opponents of the garage are applying a double standard.

“Some say you are going to allow overdevelopment of the beach. … Those that said that live in condo developments that were opposed by others who said the exact same thing — they did not want overdevelopment of the beach.”

As for those who claim the garage will block their view, Mayor George Cretekos confirmed with City Attorney Pam Aiken that homeowners have no right to a view (or light or air) over another property unless it has been granted in writing by a local ordinance or subdivision rule.

Some argued that the city’s development plan for the barrier island, Beach by Design, would suggest a smaller garage of four stories. However, Irwin explained that city codes allow a larger structure to ensure that it’s financially feasible.

“The garage will be determined by the ability of the facility to pay for itself,” he said.

Moreover, “the prospect that a larger building could be constructed at the site is very real” because city zoning regulations allow for construction of a hotel, for example, that’s 150 feet tall versus the proposed 75-foot parking garage.

The results of a city-commissioned study to determine the garage’s feasibility and impact were released last week. Conducted by Miami-based Timothy Haahs & Associates, it reports that not only will the garage help mitigate some parking and traffic problems, it would generate an average net operating income profit (after operating expenses are deducted but before income taxes and interest are taken out) of just less than $800,000 each year from 2017-26.

The study also indicates an average annual net income after reserves (once all costs including business expenses, depreciation, interest and taxes are deducted from revenues) of about $100,000 over the next 12 years.

Beach resident and opponent of the parking garage, Bill Day, who owns the East Shore Resort & Marina, near the proposed garage wrote in an e-mail, “It certainly looks like this parking garage is a done deal. …I believe that the city fathers have already made up their minds. Otherwise, the city has wasted a lot of good money drafting this agreement.

“Personally, I don’t feel like putting any more effort into such a futile cause.”

— Editor Jane Bongo contributed to this report.

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