Another planned parking project in Scottsdale is raising questions.
A controversial parking garage development at 1st Street and Brown Avenue in Old Town had caused bitter infighting among the Mayor and City Council, as well as between residents, for more than a year. A contract for the project was approved in the April 14 meeting.
In the same meeting, Council also approved a $9M project that will add 200 parking spaces across the street from Scottsdale Airport. The nature of the project had some observers confused.
Access Capital/Inspired Healthcare Capital paid $8.4M for the 1.5-acre site with a two-story office building and 79 parking spaces last year.
The property at 15011 N. 75 St. is now appraised and listed at $7.8M, the price the City has agreed to pay. When the deal is complete, Scottsdale will demolish the office building and convert the entire property into a surface parking lot. The repurposing will cost another $1.1M.
Skeptics questioned the arrangement after details were made public. Ethan Knowlden, a candidate for City Council in the upcoming election, noted raw land in the area averages approximately $1M/acre, while office buildings average around $200/SF.
He estimates the City is overpaying by roughly $2M before the $1.1M cost to repurpose the property is added on.
Knowlden also pointed the City’s plan to lease the parking area at a cost of $82.5K/year will take roughly a century to break even.
Others said there was no business case made to justify the project’s need or area growth projections.
Defenders of the plan, including Councilmember Barry Graham, noted the purchase was made under the Aviation Enterprise Fund, not the Scottsdale General Fund. Others said the new space will help alleviate congestion and improve access for area businesses.
Resident David Smith noted the appraised fair market value of $7.9M was primarily based on the value of 21.7KSF office building, which will be demolished for the project. He said the value of a vacated site to be improved to a parking lot would have provided a substantially lower valuation. (Source)