GRAND RAPIDS — The city of Grand Rapids Parking Commission approved a motion today to release Franklin Partners, purchaser of the Campau Square Plaza Building at 99 Monroe Ave., from a long-term parking lease in the adjacent Campau Parking Structure.
While the final decision now rests with the City Commission, the new agreement would make Franklin Partners responsible for some upgrades to the parking structure as well as all maintenance on the city-owned skywalk between the parking ramp and 99 Monroe. Improvements for the skywalk are estimated at $185,000.
Franklin Partners would also release the city from an easement through the Louis Campau ramp, which allows the city to make improvements to the entrance at a lower cost, pending all code approvals. That work is estimated to cost $150,000.
Additionally, Franklin Partners would co-sponsor an hourly car rental service such as Zipcar for two years with the city. The Chicago-based real estate company would market and promote ITP bus transit, Van Pool, Green Ride and Guaranteed Ride Home as well.
The parking commission noted that a car rental service company requires at least $1,500 in revenue a month to make the service viable. Rental usage needs about 40 hours a week to make that quota, according to the commission.
The original agreement required the building owners to lease 275 parking spaces, but Franklin Partners only expects to lease 160 parking cards at peak occupancy. The building is currently about 50 percent occupied. In 1988, the building’s original owners leased the parking spaces, as it was a provision required by the City’s zoning ordinance at that time. The zoning requirement no longer exists today.
One reason many officials on the parking commission supported to new agreement is the idea that the previous agreement may artificially overstate parking demand downtown. As the city tries to become more transit and pedestrian friendly, the commission agreed relieving Franklin Partners from the lease falls in line with that commitment.
According to parking commission officials, the revenue that will be lost from the cancellation of the lease is no small chunk of change. Depending on future leasing activity the parking commission estimates a loss of $3 million in revenue over 16 years. That works out to about $187,500 annually.
Still, the parking commission noted the loss is less than two percent of annual revenue.
Franklin Partners intends to spend an initial $3 million on renovating the building’s interior, making Class-A improvements to the office space, lobby and elevator area and the bathrooms. The company is pursuing LEED Gold standards.
Gary Tamminga, director of facilities for Franklin Partners, said as leasing activity picks up the company is in a position to spend up to $4 million total on the project, including facade changes and other upgrades.
“It’s important for us to do these expenditures, not to be hindered by the parking spaces,” Tamminga said.
Leasing activity around the building is picking up and the firm expects to have all 160 parking spaces filled as more tenants get added to the building, he said.
Tamminga also noted that Franklin Partners is talking with executives from the Amway Grand Plaza as the firm works through design improvements to the skywalk.
In another parking related matter, the nearby Calder Plaza Office Building, 250 Monroe Ave NW, is also coming forward with a request for release on its lease as well. A parking commission official said the reason for the request is low vacancy rates in the building.