Monday, April 23, Carroll Companies owner Roy Carroll received a call from Greensboro Mayor Nancy Vaughan informing him that the deal to build the parking deck at Bellemeade and Eugene streets was off and that the city would build a parking deck on Commerce Place instead.
Carroll, who owns this newspaper, said, “I was about as shocked as I could be to receive the mayor’s call yesterday that they were going to a plan B.”
He added, “We stand to lose hundreds of thousands of dollars as a result of the city’s departure from good faith negotiations over the deck that the city authorized us to design. Our company has extensive man-hours invested and we have given notice to tenants we have on our parking lot due to the city’s pressing us to move forward on this project.”
Carroll also questioned the wisdom of building a free-standing deck instead of following what had been the City Council policy to only build new parking decks as part of a larger downtown development project.
Carroll said, “To build a free-standing 25 to 30 million dollar parking deck to support a single $15 million project is not good planning and I would be in opposition to any such deck regardless of where it’s built.”
Vaughan said that she had talked with Carroll about two weeks ago and told him that the city was in danger of losing the Project Slugger six-story office building project next to First National Bank Field if they couldn’t reach an agreement on building the deck, and then she made the call Monday to say that the city was going to pursue another option to provide parking for Project Slugger.
Vaughan said, “We really weren’t making much progress.”
Vaughan had difficulty articulating exactly what the sticking points in the negotiations were, but it seemed to come down to the fact that the city wanted a firm commitment from Carroll on when he would build the hotel and office structure on top of the deck.
Carroll said that what the city was demanding he do was commit to building a 200,000-square-foot office building before he had a single tenant. He said, “If the City of Greensboro can convince anyone to come downtown and build a 200,000-square-foot spec office building in the next six months, I’ll donate $1 million to charity of the City Council’s choice.”
Carroll had been planning to build a parking deck, office building and hotel on that property at some point in the future, but he moved his plans up in order to accommodate Project Slugger – a nine-story office building on the corner of Bellemeade and Eugene. The nine-story office building needed to have guaranteed parking to make the deal work, so Carroll agreed to go ahead and build what would be a city-owned parking deck on the site, with the hotel and office building over the deck to be added later.
Delays in getting the project underway resulted in Project Slugger being reduced from nine stories to six stories.
Carroll at one point had offered to donate the land to the city for the parking deck as long as he retained the rights to build over and under the deck. After the city paid $2.5 million for all the land for the February One Place-Westin Hotel parking deck, which is a similar deal – with the developer building the deck for the city – the question of why Carroll was being asked to donate the land when the city was buying the land for the Westin Hotel project was raised.
When asked about the new plan to abandon the Carroll project and build a free-standing parking deck, Downtown Greensboro Inc. President Zack Matheny said, “I don’t even know what the city is thinking.”
Matheny participated in some of the negotiations and said, “We’ve been working on this well over a year and shaken hands on the deal three or four times.”
Matheny said that Monday was the first he had heard of abandoning the plan to build a deck with The Carroll Companies and build at a different location. He said he spoke to Vaughan and asked her, “Why didn’t somebody call me about switching locations. Couldn’t you let me know what you’re doing and how you’re doing it?”
Matheny said he didn’t know anything about the new deck being proposed. But it appears the city will also have to purchase the land for the proposed deck on Commerce Place and start from scratch with the design.
It doesn’t appear the city will have a partner in building the Commerce Place deck and that it will be a free-standing deck without a hotel and office building on top. Past city councils had decided not to build anymore free-standing decks but to only build parking decks as a part of larger projects, like the Westin Hotel project and the Carroll project.
City Manager Jim Westmoreland said that the city plan was to purchase the land for the newly proposed deck, which is across Eugene Street from Carroll’s site and owned by the Guilford Merchants Association. He said the city thought it could buy the land and have the deck designed by January 2019 and completed by December 2019. Westmoreland said that the proposed deck would be “a prefab structure,” which takes less time to construct, and that the plan was to have retail on the first floor.
About abandoning the Carroll project, Westmoreland said, “it just appears that the timing isn’t optimal for either party.”
Although Westmoreland, who retires as city manager on April 30, and Vaughan seem totally committed to walking away from the Carroll project and starting a brand new project, that doesn’t mean it’s going to happen.
City Councilmember Justin Outling said, “I don’t think it’s a done deal from a council perspective. Ultimately, the City Council will make the decision.”
Outling said, “Whatever five members on the City Council decide will happen.”
He added, “I don’t think it makes much sense to end the discussions right now. Any astute business person knows what their options are and, strategically, if you have an option B it doesn’t make sense to broadcast to the world that you no longer have an option A.”
Outling said that the city was big enough to explore multiple options at once and then make a decision based on what is the best option for the city.
Carroll had earlier announced that he hoped to be able to build the tallest building in the region on the Bellemeade and Eugene streets site.
The City Council passed the first resolution setting the terms for designing the Bellemeade parking deck on May 2, 2017; that resolution notes that it is the result of eight months of negotiations.
On Sept. 19, 2017, the City Council passed a resolution stating that Project Slugger would be required to rent 265 parking spaces from the city at market rates in the parking deck to be built at 415 Bellemeade St. with “retail, office, hotel and residential building below and above the new City parking deck.”
On Dec. 19, 2017, the City Council – by an 8-to-1 vote with Councilmember Michelle Kennedy voting no – passed a resolution, “Authorizing the city manager to enter into a project involvement and cost sharing agreement with CHI Greensboro LLC for the Construction of the Eugene Parking Deck and Authorizing a not to exceed amount of $30,000,000 for the project.”
So the city has been in the process of negotiating this deal for over a year and a half, has passed three resolutions in support of the project and has agreed to pay up to $2 million for the design of the project and, at this late date, the city – at least according to the mayor – is backing out of the project and is going to start over with new negotiations and a whole new parking deck project.
It’s difficult to imagine that this is going to work out as a good deal for the taxpayers of Greensboro. Paying hundreds of thousands of dollars to design a parking deck that will not be built isn’t good stewardship of the city’s money, nor is it good for downtown development.
The agreement with Project Slugger states that the parking deck will be completed by Jan. 1, 2019. Since the construction of the deck has not started in April 2018, and now the city is embarking on a whole new project, it appears that deadline will be missed by almost a year, and that is if Westmoreland’s projections hold. The city had projected to have two parking decks under construction by now and has none, so the projections of the city have a right to be questioned.
Because of delays in getting underway, Project Slugger has already been reduced from nine stories to six stories. You have to wonder if more delay is not going to cause additional problems for that proposed office building.
So as things stand, acquiring the land for the Westin-February One deck is going to cost the city over $3.5 million instead of the $2.5 the city was estimating, and, with no plans in place, the cost and the timeline of the proposed Commerce Street deck is difficult to estimate.