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. four categories of options: 1) remain within current zoning limits by constructing a 30,OOO-square-foot facility; 2) construct a 96,000 square foot facility and meet the parking requirements for the current zone by utilizing an adjacent parking facility, building a private parking facility, or securing a variance of the zoning requirements; 3) create an assessment district; and 4) expansion of the parking and renewal districts, constructing a parking facility with either a loan or a grant from the renewal agency. Mr. Holmer asked whether staff believes the development of a 96,000-square- foot facility by Centennial Bank will endanger Pankow Development Company's chances for success. Mr. Gleason said the two projects must compete on equal footing, so the City cannot be concerned about how the Centennial Bank development will affect the Pankow development. Mr. Gleason added that if the council chooses to provide a parking exemption zone and grant parking, then it will have to amend its agreements with Pankow Development Company, St. Laurent Development Company, and Selco, or face the possibility of a cause-of-action suit. Mr. Boles pointed out that the conditions of the Pankow p'roject and the Centennial Bank project are different in that the Pankow project is in the urban renewal distrlct, whereas the Centennial Bank project is not. He did not feel there would be grounds for a cause of action until both projects lie within the urban renewal district. Mr. Gleason disagreed, saying that examples from other cities support his position. Mr. Bennett said in the past, the council has taken the position that it is e impossible to achieve the desired intensity of development in the downtown core by relying solely on the private sector--the public sector must help with toe development of parking. He asked councilors to reaffirm their commitment to expansion of the urban renewal district. All councilors except for Mr. Boles and Mr. Holmer favored expansion of the urban renewal district. Mr. Luell reviewed pro formas for a series of privately owned parking garages. The pro formas were based on the follOWing assumptions: the parking garage would cost $5 million, spaces would rent for $50 per space, and all 600 spaces are rented on the first day of operation. For comparison, Mr. Luell noted that currently the average rate rents for $29 per space. The conclusion from these pro formas is that a privately financed parking structure would never recover its costs. If the facility were privately owned, but publicly financed at a four-percent rate (e.g., the Pankow project), the structure would not recover its costs within 20 years of operation. Mr. Luell said if the interest on a loan were waived, a privately owned, publicly financed parking structure would break even after 20 years of operation. He said that for a project publicly financed at no interest, and with 25 percent of the principal waived, the project would break even after 18 years. If the public sector were to construct a parking facility and give it to a private institution, the parking structure would break even after seven years. Ms. Bascom said these figures emphasize the importance of constructing alternate modes of transportation. Mr. Gleason said the construction of a - MINUTES--City Council-- July 10, 1989 Page 3 Dinner/Work Session