Council members questioned if the profit projections for a privately financed project a 2- to 3-percent rate of return would attract investors.
By: Jennifer Potash
Questions linger about whether a proposed downtown parking garage and related development would attract enough private investment to make the project financially worthwhile.
The consultants hired by the Princeton Borough Council Desman Associates and The Williams Group presented their final reports Tuesday on the architectural and financial feasibility study of a proposed parking garage and related development at the Park & Shop lot and Tulane Street parking lot.
The consultants approached the project in different ways, with Desman Associates presenting estimates for a garage financed by the borough and additional residential and commercial buildings financed privately. The Williams Group based the analysis on private development of the entire project.
Desman proposed three development scenarios, for a 500-, 511- and 544-car garage and related commercial and residential development. The three estimates range in cost from $14.7 million to $20.2 million.
All of the proposed schemes result in a relatively quick net profit for the borough, said Tim Tracy of Desman Associates.
"Typically (parking garages) don’t realize any profit for five, six or seven years," he said.
Councilman David Goldfarb said the Williams numbers show the borough making more money by keeping the Park & Shop lot.
Based on four options one of Princeton Future’s designs also was analyzed the borough would get between $188,000 and $309,000 annually while the borough typically realizes about $400,000 from the two parking lots, according to David Williams of the Williams Group.
From a financial perspective, the borough might be better off "to do a well-landscaped surface (parking) lot, " Mr. Goldfarb said.
But the council has decided to pursue the garage plans because parking in the downtown is already "saturated," said Borough Councilman Ryan Stark Lilienthal.
"I am concerned that we are starting off with a need for spaces that will be compounded with the library expansion," he said.
The council has agreed to provide the library with 85 parking spaces within 400 feet of the front door of the new building, which will be located at the corner of Witherspoon and Wiggins streets. The fallback plan for the Park & Shop lot is to divide the lot, with 85 spaces for the library and 92 for public use.
Council members questioned if the Desman profit projections for a privately financed project a 2- to 3-percent rate of return would attract investors.
Mr. Tracy said he could give the borough a projection of the rate of return over 20 years that shows revenues tend to outpace costs. His report recommends that the borough conduct additional studies to determine if the private portion of the project would be large enough to attract a developer.
The next step for the borough is to decide what components it wants in the development and figure out how to financially optimize the scheme, Mr. Williams said.
Princeton Future, the nonprofit organization seeking to shape the development of the downtown, has also proposed three garage designs. The organization’s plans range in cost from $10.9 million to $22 million, with 389 to 500 parking spaces.
Mr. Tracy said he had not reviewed the Princeton Future designs and did not know if those designs were as cost-efficient.
For the project to be conducted in conjunction with the library, the borough needs to decide by early July, Mr. Tracy said.