T chief responds to story on garage
Sources for article sought to lower minimum bid for N. Station facility
It is important and necessary that I correct several facts and assertions made by Paul McMorrow in his Back Story entitled “Garage gamesmanship.”
The MBTA concluded that the fair market value of the North Station Garage was $70 million, determined by two independent certified appraisal professionals. The $45 million figure was a conservative and prudent value used for budgeting purposes, as we worked last spring to close our projected $137 million budget gap for fiscal year 2012. This was not to set the value of the facility and, as a result, there was no “$25 million markup.” Ultimately, the MBTA is obligated to attain fair market value when disposing of its assets that serve the public interest.
A second assertion in the article was the facility’s “poor physical condition.” Based upon a recently completed “Existing Conditions Assessment Report” prepared by Walker Parking Consultants, the garage is in good condition and has a limited amount of capital repairs that need to be addressed. For your information, the MBTA and its garage management contractor, Central Parking, conduct regular preventive maintenance actions including drainage, elevators, and exhaust fans.
I take exception to the claim that the garage “wasn’t being managed effectively.” The basis for that assertion was pricing and occupancy levels. Rather than charging the maximum, the T kept the parking rates competitive with other nearby facilities. This is to promote higher occupancy and affordability, particularly for a resource owned by a public agency and open to the public.
Obviously, a private entity will be free to raise parking fees, thereby adding immediate and recurring value to the property. A recent study completed by Colliers International and published in the Boston Business Journal determined that Boston had the third highest market in the nation for parking fees at an average of $32 per day. These findings support our value rationalization. Moreover, the minimum allowable bid for the purchase of the garage is $55,000 per space. A conservative estimate to duplicate similar underground parking in the area is $100,000 per space. If any of the current garage spaces are used to provide parking for an adjacent development project, there will be significant cost savings value to the buyer/lessee. In other words, depending on the bidder, the value of the garage may well exceed $70 million if the garage provides significant cost avoidance for related development in the area.
Mr. McMorrow attributed many of the comments referenced in the article to “sources,” “real estate sources,” and “potential bidders.” To be frank, it seems the article’s sources came from bidders or bidder representatives in an effort to influence the MBTA’s public bidding process, with the intent of lowering the minimum bid price.CommonWealth magazine has developed a well-earned reputation for thoughtful reporting and insightful commentary on serious issues of our day. This story’s coverage and purpose run counter to that reputation. We would have welcomed the opportunity to explain and clarify our thoughts and assumptions on this effort.
Richard A. Davey is general manager of the MBTA and rail and transit administrator