City considers $56M outlay for parking decks to support hotels

A plan to spend $56 million in public funds to build two parking decks in downtown Greensboro is raising concerns about corporate welfare and gentrification. City leaders typically justify such projects as a catalyst for private investment that will expand the tax base and provide additional tax revenue, but to date staff has not produced documentation to substantiate the return on investment.

When the new Greensboro City Council gets down to business on Dec. 19, new members will face a vote that could potentially shape the growth trajectory of the central business district for years to come and, critics say, potentially deepen class and racial divides.

The proposals, which were pulled off the agenda on Nov. 14, would allocate $56 million in bond funds for two separate downtown parking decks, one serving a hotel, retail and residential high-rise under construction by developer Roy Carroll, and an office building to be constructed by Lexington-based Carolina Investment Properties, both near the Grasshoppers stadium; and another to serve a new hotel at the corner of South Elm Street and February One Place. The council has already agreed to pay Carroll $2 million for the design of the Eugene Parking Deck.

State law requires city council to make a finding that the projects are “likely to have a significant effect on the revitalization of the city’s central business district” to justify entering “into binding contracts with one or more private developers with respect to acquiring, constructing, owning, or operating a downtown development project comprising of one or more buildings and including both public and private facilities.” The council has already made the finding for the parking deck planned to support Carroll’s project, but not the Elm Street hotel. In the latter case, the finding would be made as part of the resolution approving funds for the deck.

City documents indicate that the private developers are committing to invest at least $49.5 million in the two projects collectively. The two parking decks will provide a total of 1,900 parking spaces, with 445 of them leased at market rate to the developers and their tenants. Operating expenses and debt service for the two decks is expected to total $4.6 million per year — an amount covered by revenue from fees, existing parking funds and the city’s general fund. The $56 million public outlay will come from the city’s Parking Facilities Bond Fund. Jake Keys, a city spokesperson, said the city will not need to raise taxes to cover the bond debt.

While voters ousted the two most conservative members of city council — Mike Barber and Tony Wilkins — during the recent election, the loudest voices in opposition to this public investment initiative have come from the left.

Lewis Pitts, a former public-interest lawyer, has been rallying opposition through Democracy Greensboro. In an interview he lambasted the plan to spend public funds on the parking decks as a “giveaway to the crony developers.”

He added, “It’s really a quick test of the new city council with two new members as to whether they have the potential to bring about the shift to bring about the more transparent viewpoint that Democracy Greensboro advocates for. We’ll quickly see if it’s going to be the same old same old of the narrow few developers setting the agenda.”

Several regional developers stand to profit from the city’s investment. While Carroll, a major developer in Greensboro who is responsible for the CenterPointe high-rise and owns the Rhino Times, has pledged to build a hotel on of the Eugene Parking Deck, Carolina Investment Properties will put up a nearby office building on land currently owned by F. Cooper Brantley, whose company boasts a relationship with a private equity firm that helps raise capital for “upscale apartment communities.”

The investors behind the planned hotel and renovated Elm Street Center events space at February One Place are Randall Kaplan, the CEO and chairman of the real-estate website Listingbook and a former chairman of the UNCG Board of Trustees; George House, a partner with the Brooks Pierce law firm who previously represented the city in an aborted attempt to reopen the White Street Landfill; and Daniel Robinson, a Durham-based foreign investment recruiter.

Mayor Nancy Vaughan talked up the deal in an interview with Triad City Beat, arguing that additional parking allows for the expansion of existing businesses and recruitment of new ones while promoting growth in the tax base. City staff was unable to provide TCB with documentation of any analysis of how much additional tax revenue the new private investment is expected to provide the city.

Vaughan also said the city’s current decks are at daytime capacity.

“That thesis is just a version of trickle-down,” Pitts said. “It’s line the pockets of the developers and allow the rich to get richer. And then there’s this theory that it will expand the tax base so that we can pay for things like improving our transportation system and paying our employees a decent wage. Those things sound like pie in the sky.” He added that when there are competing needs on the underdeveloped east side, the return on investment from the parking decks “should be rigorously critiqued” and the “documentation should be out for us to look at and evaluate.”

But Vaughan offered a separate rationale for the investment.

“The city has a responsibility downtown to provide parking,” she said. “So, when somebody opens a business downtown they’re not obligated to provide parking. If you’re going to open a restaurant outside of downtown, you would have to provide your own parking, but in downtown the city is responsible for providing parking.”

Progressive opponents of corporate welfare likely have an uphill battle in persuading council members to oppose the deal. Yvonne Johnson, a veteran council member who received strong support from progressives who participated in Democracy Greensboro’s electoral voting process, said she plans to vote for the project.

“I’m going to support the parking deck because I want to support the growth and businesses in downtown Greensboro,” Johnson said.

While conceding that council members who support public investment in the parking decks are likely acting in good faith, Pitts expressed concern that the initiative appears to dovetail with a trend towards gentrification and racial exclusion.

“There’s a new offense that’s like driving while black; it’s being downtown while being black,” Pitts said. “You can look at the Jose Charles case, with a 15-year-old accosted by the police in Center City Park, and a little after that the Zared Jones case with four young black men being downtown because they wanted to enjoy themselves like everybody else. It’s almost like South Africa during the apartheid years. The statue of Dr. King is moved out of downtown to somewhere else. Then we get noises and rumblings of moving services to homeless people out of downtown. It seems like gentrification is making the center city a downtown only for the wealthy.”