|Proposed Broad Ripple Parking Garage|
- The City later puts the remaining $4.45 million into the "Project Account." When the City does this, $1.275 million gets paid out to Keystone for documented land acquisition and construction costs.
- The remaining $3.175 million of the City’s money (which at this point is 50% of what has been deposited) contained in the Project Agreement is then paid to Keystone for construction costs on a proportionate basis using a “fraction.”
- The “fraction” used for the proportion is $6.35 million divided by total "Developer Funds," which consists of any funds the Developer borrows. According to the agreement, $6.35 million is the Numerator, the Developer Funds is the Denominator. So let’s say that the Developer borrowed $9 million and for simplicity sake we’ll use $6 million for the City’s share, then the fraction is 6/9 2/3. So the math on a $3 million of additional bills Keystone presents for payment, the city pays $2 million while Keystone pays $1 million.
- There is nothing in the contract, which stops Keystone from borrowing less than $9 million, thus making the Developer Funds less and changing the fraction in their favor. Let’s say Keystone borrows exactly $6.35 million, so the ratio is 1/1. then any bills then any bills are 100% paid for by the City until the $6.35 million Project Account fund is exhausted.
- Once the $6.35 million is exhausted, then, and only then, is Keystone responsible for 100% of the construction and land acquisition costs. However, as reported a parking garage of the type designed typically costs in the range of $6 million.
- There is absolutely nothing in the contract supporting the City's suggestion that the garage will somehow cost $15 million, contrary to the much lower figure other garages have cost.
- There is absolutely nothing in the contract that requires Keystone to put up a dime for the project.
- Keystone (actually the entity created for the project is 6280 LLC) gets 100% ownership of the garage, 100% of the parking revenue and 100% of the rental money for the 20% of the space in the garage devoted to commercial.
- The $1 buyback option is a myth. For the City to buy back the garage the formula is $1 + $10,000 ("transaction costs") + 80% of at least $6.35 million, i.e. the cost of the garage and land acquisition. (See p. 3, "Garage Acquisition Price" definition.) (Note: we would not be buying buck the 20% devoted to retail space.) Nonetheless the $1 buyback provision expires after five years. (See p. 3, "Garage Option" and "Garage Option Agreement" definitions.
|Former Deputy Mayor|
Paul Okeson now works