Birmingham city commissioners approved a resolution to put a parking structure bond proposal in the amount of $57.4 million before voters on the August 6 election at their meeting on Monday, May 6, in order to secure financing for demolition and rebuilding of a new parking structure to replace the N. Old Woodward structure and an extension of Bates Street, the first phase of the Woodward Bates project.
According to the Birmingham city charter, residents must approve a bond vote in order to fund part of the construction of the parking structure. However, throughout the lengthy discussion, city manager Joe Valentine and commissioners repeated that residents would not be taxed for the costs; rather, the remainder of the costs and repayment would all come from the parking system's reserve funds, and user fees will pay off the debt, as it has for all of the other parking structures I.n the city.
Immediately prior to discussion of the bond proposal, Valentine stated that initial design work by Woodward Bates Partners had been completed, and introduced the principals, who were at the meeting. The developers, Woodward Bates Partners, LLC, are comprised of Victor Saroki of Saroki Architecture in Birmingham; Paul Robertson of Robertson Brothers Homes in Bloomfield Hills; John Rakolta Jr., of Walbridge in Detroit, and Ron Boji of The Boji Group in Lansing.
The parcel of land, approximately four acres in the city’s central business district includes the current N. Old Woodward parking garage, an adjacent parking lot and adjacent parcels. The project, a public/private partnership between the city of Birmingham and Woodward Bates Partners, will consist of a new parking structure, called building one, that will provide more parking spaces to ease the parking crunch in downtown Birmingham; building two, a five-story building in front of the structure facing N. Old Woodward, where RH is planned to go; an extension of Bates Street that will intersect the development and connect Willits Street to N. Old Woodward; retail stores that will line the parking structure, called building three on the plans; a public plaza with a bridge to Booth Park; a four-story mixed use building in the rear of the property, called building four; and a four-story mixed use building facing Willits Street, called building five, on the current surface lot.
The city of Birmingham will own the parking structure, the public plaza, and the liner building of retail, known as building three. Woodward Bates will enter into a long-term lease (likely 99 years) with the city of Birmingham for building two, the RH building, and the two four-story mixed use buildings, buildings four and five, which are part of a second phase to be built after the parking structure has been built.
An announcement was made by Saroki that the building that will front N. Old Woodward in front of the new parking garage, known as building two, will become an RH (formerly Restoration Hardware) Gallery store.
“RH has become one of the primary retailers in America. They are now producing gallery stores, and Birmingham is going to join. Detroit is an important market and they've chosen Birmingham. This is a game changer,” Saroki said. “I couldn't be more excited. This retailer and this brand could not be more complementary to what we are doing.”
RH Chief Development Officer David Stanchuk said he had just travelled from San Francisco – but had grown up in Bloomfield Township as the son of a GM executive.
“The gallery stores are transforming our legacy stores – they're more experiential,” Stanchuk said. “Our strategy is to disrupt and dominate the luxury home market. We're working to be the premier interior design business in the country.”
He emphasized that they don't believe retail is dead, but that people want to congregate, and they are building inspiring spaces. “We're blurring retail and residential, physical and internet spaces,” he said. “We've done about 20 of these,” including in Chicago, West Palm Beach, and New York City. This will be the only one between New York and Chicago.
The Birmingham RH Gallery will be a five-story building facing Old Woodward with a rooftop cafe and garden with north, south and east views; a wine vault; barista bar; a grand staircase leading to the rooftop and a glass elevator. Stanchuk said that “other luxury brands tend to follow us, are interested in our clientele. We amplify the areas in a beautiful way.”
Commissioner Carroll DeWeese asked why Birmingham and not Detroit.
“We like Detroit – but we like Birmingham. We like the master plan, the residential, the five-story buildings,” he responded. “We think Birmingham is a perfect fit, and from where we deliver furniture, we know this is where our customer base is.”
Their lease on their Somerset store expires at the end of 2021, putting pressure to begin construction and move the Woodward Bates project forward, in addition to the need for more parking in Birmingham. Assistant city manager Tiffany Gunter said building two was changed to have a 70-foot depth on the revised site plan, rather than its original 50-foot depth.
“Every time we've studied these plans we think we've come up with improvements,” Saroki said, noting the original guaranteed maximum price was based on plans with 1,250 parking spaces. After meetings with parking consultants, staff and engineers, they have developed other schematic plans and designs “so we could go to our partners Waldbridge (who will construct the parking garage) with design development drawings.”
He said with the enlarged footprint for RH, which then increased the number of underground parking spaces beneath it, and its costs. The plans with three levels of underground parking, seven levels of above ground parking, with 1,277 spaces, would be guaranteed to cost $64,850,346.
Another option would be to remove one level of above ground parking, for 1,153 spots, for a $2.5 million savings, at $62,386,165. Another option, to lose one level of below level parking, would lose 168 spots, for 1,109 spaces, could save $3.7 million, for a guaranteed price of $61,133,00 – but it would be below the RFP target of 1,150 parking spaces.
The last option would be to remove all three below grade level parking underneath RH, for a total of 1,195 spaces, for a savings of about $8 million, for a guarantee of $56,781,2013.
In each option, the parking system reserve fund will contribute $10 million.
“It's probably the one we should be considering tonight,” Saroki said of the last option. “We're still above the 1,150 target. It's the least complicated and complex. It gives a nice separation between the parking garage and RH. This proposal makes the most sense – it's still 410 cars over the number. It's the best value proposition.”
The bond could be authorized at $50,425,000. Valentine said by requesting a bond approval from voters not to exceed $57,400,000, “it does not require us to issue those bonds but gives us the flexibility not to exceed the $57 million.”
Finance director Mark Gerber said the city can bond for 10 percent of its assessed value, which has a $300 million bonding value. “Birmingham has a lot of capacity,” he said. “We're at four percent of existing bond debt for sewer bonds.”
If approved in August, construction would begin January 1, 2020.
DeWeese objected to asking the largest possible amount “when we may not use it. And tell me why it's so important to put this on the August ballot when people who are against it will vote, when we have four commissioners up for reelection in November, and many more people will come out to vote.”
Saroki responded that time is money, and if the vote is in November, construction will start later in 2020.
“We have a world class retailer – a bird in the hand, and we don't want to lose that – and I'm afraid we could. They have to exit Somerset end of December 2021. Their stores are not simple, and they have an extensive interior build out,” Saroki said. “It's very difficult to take down the existing structure.”
“RH is nice, but our goal is parking, and our bond is about parking,” mayor Patty Bordman noted. “It won't help to put off parking. It will only be us further in the hole. The sooner it is replaced, the better.”
“What do we gain by postponing it by three months?” asked mayor pro tem Pierre Boutros.
Commissioner Rackeline Hoff asked how long RH's lease would be, and if they would have any design input into the parking structure. Saroki said it is a 20-year lease with six five-year extensions, for a total of 50 years, and they would have no input on the structure.
“I think we've done a very thorough job of studying this. It's been a couple years with lots of open meetings. As an architect, urban planner and designer of cities, I'm very confident we're doing this in a very transparent manner,” commissioner Mark Nickita said. “Yes, we're doing parking, but to do parking today without putting it into context in today's world would be irresponsible. I've heard a lot of public support about turning this vacant parcel into something positive and gives us more parking.”
Resident Clinton Baller disagreed. “You're heading for a cliff. You're basing this on a thumbnail sketch that's 24 years old,” he said, referring to the city's 2016 Plan, which recommended the Bates Street extension and development of the site.
Commissioners voted 6-1 to approve the parking bond proposal and ballot language, with DeWeese voting against.
Woodward Bates Partners guaranteed the price of the first phase, with all overages to be paid by them, and they are paying for the cost of the special election in August.