Monday, November 4, 2013

Refresher on Broad Ripple Parking Garage Deal; WRTV Reporter Kara Kenney Offers Viewers an Update Tonight

In light of reporter Kara Kenney's segment on Channel 6 at 11 p.m. on the Broad Ripple Parking Garage, I wanted to provide readers with a refresher on the deal.

A few years ago, there were numerous discussions about the need for more parking in Broad Ripple.  A study determined that there was only a need for additional parking on Friday and Saturday nights when people frequent the bars.  Nevertheless, the study proceeded to consider a handful of locations for a parking garage.  One that was determined as being "unpreferred" was the property located at the southwest corner of the three way intersection of Westfield, Broad Ripple and College Avenues.  The conclusion was that the triangle shaped lot was too small for the proposed large building, the intersection was too busy and that pedestrians could get hit crossing the road, and that the garage would be underused because it sits on the edge of the Broad Ripple business district instead of being centrally located.
Broad Ripple Parking Garage
early on a Thursday evening

The City nevertheless entered into a contract with Keystone Construction and its partners to build a garage at that location.  Keystone is owned by Ersal Ozdemir who is a contributor to the Mayor and other politicians.  Keystone also in December 2009 hired Paul Okeson, then Mayor Greg Ballard's chief of staff, as vice president of business development.

As part of the deal, the City of Indianapolis, using part of the $20 million from the 50 year ACS parking meter agreement, paid $6.35 million toward acquiring the land and building the garage.  The $6.35 million is actually termed in the contract to be 10 years of rent, to be paid upfront, for the location of an IMPD substation in the garage.   At the end of 10 years, the City has to pay rent for the IMPD substation at market rate.  (The City is also required to pay prorated utilities for the substation.  As of only a month or so ago, the substation had still not opened though the rent has already been paid.

The City's $6.35 million payout is pursuant to a denominator/numerator formula that depends on how much Keystone has to borrow to build the facility.  The payout according to the "fraction formula" is extremely complicated but also easily manipulated.  Basically if Keystone did not have to borrow anything to build the project, then the City would have to front the entire $6.35 million before Keystone had to put a single dime into the project.

Throughout the selling of a the project, the garage was sold as a $15 million project.  The media dutifully swallowed this figure reporting it as a fact.  But according to an Indianapolis Star story early on, comparable garages cost in the $5 million to $7 million range, not $15 million.  A cynic would say that the $15 million figure was simply manufactured to make it appear Keystone was paying something for the garage when in fact the company wasn't.

What turns out to be significant is a bait and switch that took place.  Late in the history of the

planning for the project, the commercial space in the Broad Ripple Parking Garage was nearly doubled from 20% to 36%.  Most media outlets missed picking up on this major change in the taxpayer funded deal.  Now, looking back a year after it opened, it appears the Broad Ripple Parking Garage, which it turns out is little used for parking, was actually about taxpayers footing the bill to construct a commercial building for Keystone.

As a result of the deal, Keystone has full ownership of the building and receives all commercial rents and parking revenues.   The City not only gets nothing in return, after ten years, the City has to start paying rent for the IMPD substation.

I'm sure Kara Kenney's investigation will cover more information about this deal that, if it isn't on the FBI's radar, should be.  Click here to watch the preview of the Kenney piece.


Guest said...

I ride by there every day and it is mostly empty.

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