Dollar deal: Mayor says sale of parking garage is 'cost avoidance'

LACONIA — While it was just a procedural vote, neither city councilors nor the mayor chose to speak against a proposal by a local company to purchase the city-owned parking garage for a grand total of $1.

Speaking in an interview after the meeting, Mayor Andrew Hosmer said despite the low purchase price, he considers it a good deal, especially because of what he called the “storied history” of the structure.

The parking garage, a three-story building, was built 51 years ago as part of the sweeping Urban Renewal project. Its ownership structure is unusual in that the ground floor, which is largely storefronts, is privately owned, while the city owns the second and third decks, which were intended for parking.

However, for the past several years, only the second floor has been open for vehicles. Steel supports, which were left exposed, have been weakened by a half-century of salt and New England weather, and the degradation has necessitated the closure of the third floor.

The cost for the city to affect long-term repairs to the building was estimated at $4.5 million five years ago, replacement of the structure was thought to be $10.8 million, and it would cost at least $2 million just to tear it down.

Instead of choosing any of those seven- or eight-figure options, city council has chosen to instead spend several thousand each year to keep the second floor usable. 

The issue is set to be gauged in a public hearing later this month.

Hosmer said he’d be happy to see the structure transferred to private hands.

“Certainly a brutalist structure at the entrance of Main Street doesn’t seem like a great idea to welcome people to our downtown business district,” Hosmer said. Although the city has been regularly paying for repairs to “shore it up,” he noted, “More than yearly maintenance, it needs something more significant.”

Yet, Hosmer said he doesn’t think the city has the appetite for such a significant investment.

“I don’t know if taxpayers are keen on taking on the expense of a refurbishment of the parking garage. It would be pretty expensive, and it would be reflected on the tax rolls.”

Hosmer said he saw the proposed deal as an opportunity for “cost avoidance” for the city.

“Right now, the best option is to sell it to the people who own the first floor.”

By that, Hosmer was referring to 5623 Real Estate LLC, the corporation which also owns the first floor of the building. Brandon Borghi, part of 5623 Real Estate, wrote the letter expressing interest in the property. He he is also part owner of Fit Focus, the largest tenant of the first floor.

In a previous interview, Borghi declined to specify any development plans for the building, but said the more pressing interest was in the structure’s ongoing maintenance. As the owner of one business in the parking garage, and landlord to several others, he said it has been frustrating at times to correct things such as water leaks, when the source might be on the city’s floor, but the consequence is manifested on the ground floor.

“We felt we needed to take our destiny in our own hands,” Borghi said last week.

A formal purchase-and-sale agreement is still being finalized, said Kirk Beattie, city manager, but will likely be finished next week and be included in the packet for the Monday, June 23 City Council meeting, during which will be a public hearing on the matter.

Hosmer said he expects those with an opinion, supportive or contrary, to voice it during the hearing.

“My job is to make sure everyone has an opportunity to speak, and the council makes an informed decision,” Hosmer said. “Something may change my mind to say this isn't a good idea, but I haven’t heard it yet.”

One implication of private ownership would be that the city would have significantly less control over what happens at that property, Beattie noted. In the letter of interest, Borghi hinted at that concern, noting the buyer would make “a commitment to clean up the property and perform any improvements reasonably necessary to allow its continued use as a parking garage.”

Holding the owners to such a commitment is where it would get tricky.

“We want it to be kept for parking as long as possible, but we know that once a private owner owns it, they can make a decision to transfer [the use] away from being parking,” Beattie said.

As long as it’s open for parking, the city would still be able to evaluate its safety under property maintenance codes, Beattie said. He said conversations with Borghi have given him confidence in his company's grasp of the building’s needs.

“They know there’s a lot of work that needs to go into it,” Beattie said, “they seem to be very understanding of those needs, but they also understand that it’s going to take time” to make any renovations.