|Artists rendering of Broad Ripple parking |
garage as it was originally proposed.
Some background first. The City pays the first $6.8 million of the cost to build the garage. The Star and other media outlets continue to report that it will be a $15 million garage. But there is nothing in the contract that suggests it will cost that much. In fact, as reported by the Star other similar garages have been built, not ironically in the $6 million to $7 million range. It appears that the only reason for the claimed $15 million is to leave the false impression that Keystone Construction will be contributing some $8 million to the project.
But the contract actually does not require Keystone to put a dime into the project, and by changing an input into the contractual formula, Keystone can avoid making even a minimal contribution to the project.
While much of the discussion has been on the change in plans and the fact that a variance was needed (and obtained yesterday) because of setback and other requirements, what caught my eye was the change in the commercial space in the building from 14,000 square feet to 25,000 square feet. Instead of being 20% of the building, commercial space will now occupy 36% of the building. Indeed most of the people parking in the garage will probably be visiting those establishments, not visiting the other business establishments in Broad Ripple.
To recap, the City is required to pay $6.8 million to build the garage and commercial space for Keystone. Keystone is not required to contribute a dime to the project. Yet this is what Keystone receives in return:
Revenue from commercial rents: Keystone 100% (commercial now makes up 36% of garage)
Revenue from parking: Keystone 100%
Ownership of garage and commercial space: Keystone 100%Meanwhile the City gets absolutely nothing from the deal.
This is an outrage. Hopefully the newly-elected councilors will address these constant giveaways of the public's money to politically-connected companies like Keystone. The City needs to make public the new revised contract so we know what other changes have been made to sweeten the deal for Keystone.
See my analysis below of the details of the contract, or at least the contract before it was changed:
Tuesday, October 25, 2011, The Tale of the Broad Ripple Parking Garage: Taxpayers Pay to Build the Facility While the Developer Gets 100% of the Ownership and Revenue