Jackson’s Downtown Parking Garage

I, on occasion, have blistered the city council for poor decisions based on facts that really didn’t exist. Normally, in a situation similar like this,  I would have been the only councilman to have voted no. However the atmosphere has changed on the council and three additional council members agreed that the offer was either too high or no offer should have been made at all. The remaining council sought to justify a position not base on principle but some sort of defensive logic, a logic similar in nature to one who would carry on with a negotiation with the devil. They sought to justify a desire to obtain something that they wanted. Most of the majority believed that the need was greater than the risk of reelection. Some will probably not even seek reelection at the same office, some will. Some believe the public will forget, which might be true. Some believe that the good they do will out weight the one single act, which may also be true. I will have competition in my own race because of my conservative stance on this particular subject. That’s right, not everybody loves me. I know that I hardly like spending my own money and I consider it a horror to spend someone else’s hard earned cash. Not everybody has that same opinion. So lets get back to the parking garage and try to examine how some got to their decision. According to the minutes of the City Council, on April 5th, 2005,

“on the motion of Council member Bannister, seconded by Council member Brooks, unanimous approval was given to a request from John Allen and David Horton for a conditional option to purchase the city’s parking lot adjacent to the Hard Rack building on the 100 th block of North Highland Avenue. Mr. Allen and Mr. Horton plan to propose a public/private development of a parking garage/office building that would include a proposal that the city lease spaces in the parking garage.”

What I specifically hate about minutes of the City Council is that the backup documentation is never included with the minutes themselves. For example, what were the conditions of the option to purchase. Was there an exchange of capital in order to obtain the option? The only documentation was a letter that stated and I quote:

TO: Mayor Charles Fanner

FROM: David Horton & John H. Allen

RE: Land Option

As you are aware, David Horton and I are exploring the possibility of constructing a parking garage on the 100th block of N. Highland adjacent to City Hall. We are in the process of calculating construction cost and operation budget. This facility will hold 200 +/- vehicles.

At this time, I respectfully request on option to-purchase the present city parking lot adjacent to the Hard Rack. Accepting your valve 0f $127,000 for the land, we wish to combine this property with ours to pursue the possibility of the parking facility.

Enclosed is our check for $100.00 for the option to buy. We ask this option for 6 months from date of acceptance.

Thank: you for your consideration.

The letter is signed by John Allen and copied to David Horton. While the minutes are the official record, the video on the issue and its points are presented to council by Mayor Charles Farmer instead of Mr. Allen and Mr. Horton which is something very rare.

In that presentation Mayor Farmer constructs the option that Mr. Allen and Mr. Horton will come back to the city and present to council a complete presentation including the lease package for the city.

Well I watched the video and my interpretation of the proposal is very much the same as my interpretation in 2007. Mr Allen and Mr. Horton wished to build a building that would perpetually be funded by the city.

At that time the city owned the parking area which they used about 12 spaces. The remaining spaces were leased out to various businesses. None of the spaces were free during the weekdays. The condition of the option was that the city commit to the proposal to lease all or some of the spaces. Pretty much the same offer given the council in 2007.

In 2006, Mr. Allen and Mr. Horton came to city to move forward with this plan but the option had already expired 6 months earlier so the city could not be held to the proposal to lease. On that day Mr. Allen and Mr. Horton insisted on purchasing the property with no requirements from the city .

In 2007, Mr. Allen and Mr. Horton came to the city to attempt to install a letter of intent. Mr. Allen voided that letter after the vote and stated that they would proceed without the city.

In review, I think even in the beginning Mr. Allen and Mr. Horton understood that this project would never be completed without the city’s financial backing. At the same time the city council was never really given enough detail to the proposal to make a sound decision.

Politically, Jackson was in a shifting position. More and more private companies were clouding the financial pictures of government by constructing properties around the country with the specific purpose of leasing these properties to governments. We, of course were not excluded in that process. In the 70’s, government growth was accelerating and the need for space was in high demand. Governments were leasing properties without regard for cost and later building what they thought they needed. The businesses that leased these interim properties found that income very desirable and lobbied for the options to build properties for perpetual leasing. The governments were relieved of the cash requirements to build their own properties in exchange for higher costs in the future. I think Mr. Allen and Mr. Horton wanted to create their own package for the city.

What went Wrong

It was simple, if Mr. Allen and Mr. Horton had built the property with an agreement with the city in the first place instead of dancing around it for four years they would have succeeded, but to do that they would have needed the capital to build in first place. Apparently parking garages are not the same as other properties in the eyes of banks and obtaining financing was probably difficult. So the capital was not there to build.

As is the case with most small contractors, real capital is always difficult to hold onto. Money moves from project to project and normally excess capital is a rare commodity. While Mr. Allen has accomplished a great deal in residential property, his record of success is limited to long term projects that can be worked on at his pace.

That is in the Past

Did the majority of the council act in good faith in voting to approve the purchase and repurchase of the property? In my opinion No. Of course it is simply my opinion. In business there is a process for everything and in order to succeed in business, these process are followed through until something better comes along. That is because these steps have proven to be successful in a majority of cases through the years. In 2005, Mr. Allen and Mr. Horton were willing to continue with a successful plan of having governments pay for their work but wanted to leave out the financial step. The city in protecting its citizens has an established bidding process. They wanted to exclude, in their steps, the bidding process. In December of 2009, in a 5-4 vote, the council approved the purchase of the property with all of Mr. Allen’s contingencies which totaled in the end nearly $1,000,000.00 and even in the end he wanted more.

It is perfectly clear whose at fault here. Again in my opinion, the mayor who allowed this lunacy to continue on and on and those that supported it for whatever reason.

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