CLARKSVILLE, TN (CLARKSVILLE NOW) – While the county has approved moving forward with the downtown parking garage, it was not without concerns over taking out a bond to help pay for the project.
At the County Commission’s meeting on Monday, officials voted on a resolution authorizing a restated intergovernmental agreement on the downtown parking garage. The commissioners also voted on a resolution that would authorize the issuance of a bond not to exceed $14 million to cover rising costs of the now-$25 million facility.
The 724-space garage is being built on land donated to the county by the Hand family, which owns the Riverview Inn next door, and it will be partially funded through a $14 million grant from the state of Tennessee. The garage will provide parking for the adjacent F&M Bank Arena, currently under construction.
Addressing questions
When it was time to vote on the agreement, Commissioner Nathan Burkholder moved to delay the vote until the January formal session.
“I’m not asking to delay this vote because I’m against the garage,” said Burkholder, noting he had received questions from the public about the cost.
County Mayor Wes Golden said the county has a limited window to act on a bid for the precast concrete and delaying the vote could cost even more money. “Delaying this a month could put us out of line and out of that locked-in price,” he said.
Other commissioners also said delaying the vote could hurt efforts downtown.
“This needs to be done so that it is in time for the opening of the arena, and we don’t need to incur any other further costs because of delaying this,” said Commissioner Lisa Prichard, who later addressed the questions about the cost.
“The $14 million is a grant. The property is free. The $11 million that we need, is going to build the foundation of the parking garage. Because of the kind of geophysical structure that Montgomery County has, especially in Clarksville up on that hill, they have to build a special kind of foundation, which is what the money is for,” she said. “The garage will actually cost $14 million, and the land is free. What more could we ask for?”
The motion to delay the vote failed 19-1, with only Burkholder voting yes.
Cost and revenue breakdown
Buck Dellinger, president and CEO of the Clarksville-Montgomery County Economic Development Council (EDC), told the commission about a worst-case funding scenario based on numbers provided by a consultant at SB Plus.
“From a net operating income — not our profit yet, but a net operating income — we’re to the positive $755,000 for this garage. That doesn’t account for the sales tax revenue that is going to come as well,” he said.
Dellinger noted that if the county were to finance $14 million with a 15-year bond at the current interest rate of 5.5%, the debt cost to the county would be $96,000 a month for a net loss of $400,000.
He went on to say that the 55,000 square feet of retail space adjacent to the garage will create $27.5 million per year in new sales in the downtown area, based on a $500 revenue per square foot. At the current local sales tax rate of 2.5%, that will generate nearly $700,000 per year in sales tax revenue for the county.
“We’re going to create $687,500 per year in new sales tax. Divide that by 12, and we are netting almost $50,000 a month in new sales tax for our school system and for our city and county, just in the Riverview area, just adjacent from the garage,” Dillinger said. “We’re nearly breaking even or doing better than breaking even on the overall pro forma as presented to you.”
Dellinger later added that officials have now budgeted for the foundation based on a geotechnical study, and the current contract the county has received is a little less than $23 million, with contingencies in place.
Final vote on garage
Commissioner David Shelton said the parking downtown could be viewed as infrastructure rather than a revenue source, and that without it, businesses downtown could be harmed.
“Parking is a very difficult thing to make money at as a business by itself,” he said.
While most seemed on board with the idea, one commissioner still cited concerns about the cost.
“I personally have been in a position where my business lost money, but still faced a $16,000 tax bill. Most of it here, to Montgomery County. I think it’s wrong to ask business owners, who have their businesses on Tiny Town Road, or Fort Cambell Boulevard, or Martin Luther King Parkway to pay for parking that supports other businesses in a different area of the county,” said Commissioner Billy Frye, noting he was also concerned about future tax increases.
The resolution to enter into a restated intergovernmental agreement with the IDB passed 18-2, with Burkholder and Frye voting no. It was also amended to allow the county to transfer grant funds to the IDB for payment of materials and services for the garage.
The resolution authorizing the issuance of a bond, not to exceed $14 million, also passed 18-2, with Burkholder and Frye voting no.