The Temple-George garage is the first garage the city of New Haven will open for auction.
After more than 30 years of ownership, the New Haven has opened the Temple-George garage — which primarily serves the Temple Medical Center of Yale-New Haven Hospital — to bidders starting Feb. 7. Matthew Nemerson, chair of the New Haven Parking Authority, said the decision to sell the property comes as a result of the city’s need to balance the annual budgets. During his State of the City address last Monday, Mayor John DeStefano Jr. said that in order to compensate for the state’s $8 million budget deficit, the city must make hard choices so that New Haven can remain competitive.
Nemerson explained that the city cannot borrow money using bonds and there are not many other alternatives to raise money. Cities all around the world are looking for ways to raise cash, Nemerson added.
“The city has a projected deficit and we’re looking at opportunities to raise money,” he said.
The Temple-George garage generates approximately $400,000 to $500,000 a year. A portion of the revenue goes toward repairing garages owned by the city, while the remainder is transferred to the city’s budget. By selling the garage, the city will forgo the annual income that it generates from revenue received from parking fees, said Nemerson. He said it is too soon to tell whether or not selling the garage is a good decision, since no one knows whether interest rates will go up or down.
“It is clear right now that the most important thing is that the city remains viable and the mayor is able to control his budget,” he said.
Nemerson said the city decided to sell this particular garage because it is the one with the “most single purpose,” adding that most of the people who use it have offices and leases in the building.
“From a strategic standpoint, this garage has the least impact on the public life of the city,” he said. Nemerson said the city has spent $3-4 million for repairs in the last few years.
Ward 7 Alderwoman Frances “Bitsie” Clark, who represents the district in which the garage is located, said the deficit for next year was reduced from $57 million to $42 million when the grand list, which specifies the value of taxable property in New Haven, grew by 3 percent. Clark added that selling the garage would help prevent the city from raising property taxes.
“At this point we have a crisis. For this year and next year we are literally like a family that is in a situation where we don’t have enough money to pay our bills,” Clark said.
Although the application to bid for the property does not specify a minimum amount, it states that the new buyer should be able to raise the necessary funds before June 30. Nemerson said it has not been decided what amount the city will be willing to settle for, adding that he remains optimistic that the city will get a good deal.
“If we got $10 million, it would be great,” he said.
The New Haven Parking Authority owns 66 percent of the parking space; the rest is owned by Temple Street Associates, a private property management company that currently owns nearby buildings. Nemerson said the contract allows Temple Street Associates the right of first refusal, which means they can match any offer. Nemerson said he does not know whether Temple Street Associates will purchase the rest of the parking space, but he believes that it would be in their best interest to do so.
“One’s assumption is that unless the price is outrageously high, [Temple Street Associates] would buy it,” Nemerson said.
According to the request for proposal, the Temple-George garage was built as part of the Temple George Redevelopment Project, which was financed in part by a bond issuance authorized by the Board of Aldermen of the city of New Haven.
The Board of Aldermen will make the final decision as to whether or not the city will accept the highest offer after March 1, once all bids have been received.