Did you know there’s a multimillion-dollar condo redevelopment deal in the works for the historic Donaghey Building at Seventh and Main?
Did you know that a memo from City Attorney Tom Carpenter slowed a critical part of the deal last week and that Sharon Priest, director of the Downtown Partnership, is not happy about it?
Now you do. (It is sadly true that we too often learn of City Hall deal-making after the fact.)
Stephanie Smith is a 29-year-old Florida real estate developer who recently entered a contract to purchase the 14-story Donaghey Building from the Hot Springs land company that saved it from the wrecking ball in 2001. It has languished since.
Though Smith is managing the building and beginning interior demolition, completion of the deal and a big public announcement hinge on her ability to purchase the Metrocentre Improvement District’s parking deck across the street at Seventh and Scott.
The Downtown Partnership manages the deck for the Improvement District. It wants to sell the deck for $1.5 million to pay down the district’s bond debt and shuck a losing operation. The deck is vital to the condo developers, who otherwise have no parking. The Downtown Partnership thinks Smith’s plans to put 112 condos on floors 5-14, with commercial and professional space below, would be a tonic to downtown.
Enter City Attorney Tom Carpenter, who filed a memo shortly before the June 6 Board meeting at which the parking deck deal was to be approved. He noted that the city had invested $500,000 in the deck, owns the land beneath it and has never been paid the rent promised when the deck was built. The Downtown Partnership wants the city to give up its interest for free because of the benefits of new development. Carpenter’s memo noted that other improvement districts are sometimes short of cash. Bailing one out might create a bad precedent, he suggested.
To Priest, a former city director, Carpenter is again functioning as the “12th board member” — trying to influence policy rather than give legal advice. She pulled down the proposal so she could fully respond to Carpenter’s memo at a future board meeting. She thinks, by the way, that the paydown of district debt could end some special tax assessments downtown and thus create a friendly environment to expand the Metrocentre Improvement District. She said it could then provide more amenities for a broader swath of property.
Carpenter has a knack for stirring things up. Other city officials weren’t happy when he noted in April that the City Board departed from long practice when it closed an alley between Markham and Second alongside the Capital Hotel. The city gave the property free to the not-exactly-needy Stephens family, which owns the hotel.
Maybe these are all fair points: The Donaghey redevelopment project is the real thing. $1.5 million is a fair price for an unprofitable deck. The city will reap benefits sufficient to justify a gift of its parking deck equity. The city must be careful about giving deals to some that are not available to others. When giving away public assets, a full and public discussion — with plenty of advance notice — is preferable to quiet, pre-approved deals.