On April 14, Scottsdale City Council capped more than a year of debate by approving an Old Town parking garage contract.
A dozen citizens spoke passionately for or against (most against) before the city’s elected officials joined the debate; after all the talk, a decisive 5-2 vote approved construction of the $18 million project.
At the same meeting, City Council unanimously approved a $9 million project to add parking 10 miles due north.
There was no debate nor even a formal presentation, as this knockdown project was lumped in with other items on the consent agenda.
Where the First and Brown “Parking Corral” expansion into a garage was a lumbering freight train that started and stopped for years after a 2019 bond approval, the plan to add parking across from the airport soared like a jet.
At the March 18 Airport Advisory Commission meeting, Rick Wielebski, the city’s Aviation Director, said the city “is exploring an opportunity to purchase land near the airport.”
Less than a month later, City Council approved the scheme: purchase a two-story office building with 79 parking spaces across Airport Street from the airport, then demolish the building for more parking.
Cost of the office and 1.5 acre property: $7.8 million.
Cost of demolition and conversion into a parking lot: $1.1 million.
Though renovation of the interior has been ongoing, the exterior appears sound – the structure “was built in 1998 and is in good condition,” according to a city-hired appraiser.
But wait – there could be much, much more here at 15011 N. 75 Street.
“In the near term, the site will be used for surface parking, with the potential for a structured parking facility in the future,” Wielebski noted in his agenda report.
He noted the Airport Master Plan update “identified that additional space is necessary to meet both the existing and projected demand at the airport.”
The property and land was listed on loop.net with a sale price of $7.9 million.
The March 25 valuation by Appraisal Technology Inc. came in at that exact price.
Wielebski and city leaders apparently were eager to jump on the purchase, though there appeared to be little competition.
Access Capital/Inspired Healthcare Capital purchased the property less than a year ago for $8.4 million.
“The subject property is currently listed by John Stroud with
Matthews Real Estate Investment Services for $7.9 million,” according to the March 25 appraisal.
“Mr. Stroud stated that the property has been on the market for two months and has had no offers to date.”
Pro/con
It can be said that this airport-related project flew under the radar, as the people who packed City Hall 12 days ago came there to fight or defend the Old Town parking plan.
After the Progress shared details of the airport purchase, some were skeptical – while others supported the plan as a solid landing.
Ethan Knowlden, for one, thinks it was a bad deal.
“This is another example of our Council being fiscally irresponsible,” Knowlden, who is running for City Council, said.
“I do not dispute the importance Scottsdale Airport has to our city’s economy. But the numbers don’t add up.”
He cited “typical raw land purchases in the area” at around $1 million per acre, and typical office building purchases of around $200/sq. ft.
By his figuring, the city is overpaying by $2 million.
“Then spending another $1.1 million to demolish the building and reduce the value of the asset it just acquired,” he complained. “All for 200 parking spaces.”
He did grudgingly acknowledge a plan to lease the parking spaces, earning an estimated $82,500 per year in revenues.
“So the lot will pay for itself – in about 100 years,” Knowlden sarcastically noted.
Councilman Barry Graham, who is running for reelection, defended the deal.
“I voted to add additional parking spaces – funded through the Aviation Enterprise Fund, not the General Fund – to ensure the stability of our airport’s future,” Graham said.
By comparison, he said, the Axon plan for 1,300 living units nearby de-stabilizes the airport. “The company’s proposal to build apartments directly in the airport’s flight path was denied by the Airport Advisory Commission because of safety concerns,” he noted.
Raoul Zubia, another City Council candidate, added his thumbs up to the deal.
“I support this purchase,” Zubia said. “It directly addresses the ongoing parking shortage at the Scottsdale Airpark.
“Expanding available space will reduce congestion, improve access, and support local businesses.”
He called the deal “a smart first step toward developing a long-term parking garage solution to meet future demand.”
Same for Bob Littlefield, the former councilman running again.
“The airport needs more parking and this acquisition is being paid for out of airport funds so I am OK with it,” Littlefield commented on the deal approved by his wife, Councilwoman Kathy Littlefield.
She is terming out this year, creating one of the three council seats up for election.
Outsider view
David Smith is not running for City Council. He has been there and done that: After being a city treasurer, he was elected to Scottsdale City Council in 2014 – losing a reelection bid four years later.
Though he stepped away from politics, Smith keeps a close eye on city affairs, particularly revolving around the airport. (In 1986, Smith founded the Airpark News, now owned by Times Media Group, which also owns the Progress.)
Smith’s sarcastic side was in high gear regarding the agenda report on the recent purchase, which states it will “support operational needs and expand parking capacity for Scottsdale airport and its users.”
“Even a lay reader would marvel how the office building will support operational needs,” Smith remarked, “since the Airport plans to immediately demolish it.”
With a more serious tone, he challenged that “the Council report offers no business case supporting future growth projections; no assessment of current versus future projected parking needs; in short, no justification for additional parking at all . . . much less this particular 1.49 acres with an office building sitting on it.”
Smith also echoed Knowlden’s cynicism on revenue leasing parking spaces will generate: “the hoped-for $82,500/year does not even amount to a 1% return on investment.”
Then there is that appraisal …
“Bizarrely,” Smith said, “the appraiser’s FMV (fair market value) of $7.9 million was based entirely on the value of the existing 21,664 square foot office building … which the Airport intends to demolish immediately after purchase.
“If the appraiser had been asked to develop the hypothetical FMV of 1.49 acres of vacant land, improvable to a surface parking lot, he would have come up with a much lower valuation.”