City exploring sale of several Birmingham Parking Authority decks to private buyer

City exploring sale of several Birmingham Parking Authority decks to private buyer
(Source: WBRC)

BIRMINGHAM, Ala. (BBJ) - The city of Birmingham is exploring the potential sale its parking decks that are currently managed by the Birmingham Parking Authority.

It’s a deal that would provide important revenue for the city as it navigates challenges associated with Covid-19 but could also reshape the parking landscape in Birmingham’s city center, where some landlords, tenants and residents have recently expressed frustrations with the status quo, particularly prior to Covid-19.

“The city has gotten an unsolicited proposal to purchase some of the decks, and the initial details are that we are in discussion with this potential buyer to sell as many as six of the properties for a sale price of around $41 million,” Councilor Darrell O’Quinn told the BBJ. The potential buyer has not been disclosed.

The BPA currently operates eight decks in downtown Birmingham, in addition to some surface lots throughout the city. But the city of Birmingham owns the properties. The properties being considered for sale include decks three through eight at 401 N. 20th St.; 2128 Fourth Ave. N.; 2012 Fifth Ave. N.; 2010 Second Ave. N.; 509 N. 17th St.; and 2021 Third Ave. S.

O’Quinn said the potential buyer is willing to put down $500,000 in earnest money as soon as the city council approves the agreement, which would allow the city to address some of the issues created by the $63 million revenue shortfall caused by Covid-19. He said a committee of the whole meeting could be set up next week to discuss the potential sale.

At its board meeting on Thursday, members of the Birmingham Parking Authority’s board made reference to the potential sale but did not elaborate on additional details. Representatives of the BPA did not immediately respond to request for further comments.

“We have efficiently operated municipal owned parking decks and lots over the last 48 years. It is our belief that an outright sale is short-sighted and does not provide consideration for an improved financial economy climate, such as parking for the World Games, tourist events and downtown economic development in a post pandemic environment,” said Birmingham Parking Authority Board Member Dora Sims.

BPA went on to say, “We, the Board of Directors of BPA, urge the officials at the City of Birmingham to consider all options to preserve interest in these valuable City assets instead of privatizing the downtown parking decks.  Taxpayers, employees and the Birmingham Parking Authority and the public deserve to have this option reconsidered to maintain and preserve these City assets recognizing that future opportunities and future economic growth is on the horizon.”

As the city has navigated Covid-19, Birmingham Mayor Randall Woodfin has previously identified opportunities to leverage its assets, and the parking decks in the heart of the city center are one of them.

“This was unsolicited, but I think it matches my intent. I told my team the night the budget was passed – I looked the public in the face – and said we’re going to do everything we can to generate revenue ... to do the things that are important to us,” Woodfin told the BBJ. “I think libraries are important to us as a community. Neighborhood revitalization is important to us as a community. Investing in our city’s infrastructure is important to us as a community, and investing in social services such as mental health and addressing homelessness is important to us. If it’s a choice between netting $40 million in a lump sum to invest in these things versus only generating $1 million a year on average to give $600,000 of that back to (the BPA), then I think that choice is simple, but I leave that to the residents to decide.”

O’Quinn said the other consideration is that about half of the revenue the BPA generates comes from the city’s annual budgeted $600,000 it pays the BPA for employee parking. So, the city is the biggest contributor to the BPA’s revenue, yet the city does not generate a significant amount of revenue from the parking facilities.

“What it does for the average taxpayer in Birmingham – it’s not generating a return on investment, and I think there is a lot greater potential for these facilities than has been realized under the BPA management,” O’Quinn said.

He said there has been a lot of concern from the downtown business community as well as some residents about the parking authority’s management of the decks wherein the BPA says certain facilities are at full capacity or have a waitlist, but there are a significant number of vacant spaces on a daily basis.

The BPA recently settled a lawsuit over a dispute with the owners of the Financial Center – a major downtown high-rise that stemmed from claims the BPA was withholding 105 parking spaces from the landlord that it was legally obligated to provide. Terms of the settlement have not been disclosed, despite repeated requests from the BBJ for a copy of the settlement involving the public entity.

O’Quinn said he expects the parking situation will improve if the city approves the sale, and he doesn’t expect a dramatic change in parking availability to the public.

However, it would be up to the buyer as to how they want to use the deck with the exception of a stipulation that will be placed in the agreement that the buyer cannot purchase the properties and tear them down to build something else for a specified period of time.

He said this will ensure the commercial real estate market is not turned on its head as a result of the potential sale.

The buyer is intending to honor all existing contracts and leases.

He said the potential buyer has also said it wants to make improvements to the facilities and the operations upon purchase.

O’Quinn said he is in support of considering the sale so the city can alleviate itself of some of these assets that aren’t generating a great return.

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