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August 10. 2013 10:29PM

Ted Siefer's City Hall: Downtown parking spaces become pressing matter

TUESDAY'S MEETING of the Board of Mayor and Aldermen was a long one, but at least it had a running theme: parking. More specifically, the aldermen were faced with the question of how to balance the growing demand for parking downtown with the city's other interests in promoting and guiding development.

There was the matter of what to do with the city's Pearl Street and Bedford Street surface parking lots; the former suddenly finds itself the object of affection from three developers, and the latter has been eyed for a parking garage and mixed-use project.

And then there was the news that Anthem, the state's largest insurer, would be moving downtown to 1155 Elm St., the tower at the Bridge Street intersection. But this move also hinged on parking. The landlord's lease with Anthem was contingent on the city agreeing to sell its easement to the 68 ground-floor parking spaces in the building's garage.

The aldermen agreed to the deal, whereby the city would be paid $510,000 for the easement. But some aldermen criticized the way the deal went down, arguing there wasn't enough time to assess the impact on the small businesses and patrons that used the public portion of the garage.

In the case of the Bedford and the Pearl Street lots, there was a common outcome. After much debate and hand-wringing, the aldermen voted to issue a request for proposals.

The Bedford lot is the more desirable property, in the heart of the Millyard, and it has been the subject of months of study by a Florida consultant hired by the city. Is there demand for parking in the area? Yes, there is, the consultant, Peter Flotz of the Lansing Melbourne Group, concluded. Is the site suitable for a large multi-story building? Yes, it is.

For a majority of the aldermen on Tuesday, it was time to pull the trigger and solicit proposals for the site. At a minimum, what the city wants is a parking garage, but as the consultant has noted, a hotel or apartments could piggyback on the building. For the aldermen in the minority, who wanted to pay Flotz more money to further refine a proposal for the site, there was concern that a vague RFP would have the same result as the one that was issued in 2008. There would be no takers.

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Of course, the economy is in a much different place today. Maybe the strongest indication of this was the fact that three companies had stepped forward to express an interest in the humble Pearl Street lot, which is off the sleepier side of Elm, north of Bridge Street.

All three companies are interested in building a kind of mega-dorm at the site, an apartment building that would serve some of the 20,000 students that attend Manchester area colleges and universities.

For a parking lot, there was considerable intrigue surrounding the property heading into Tuesday's meeting. Initially, city officials were approached by an earnest young man, James Vitas, the principal of the VMD Companies in North Andover, Mass. He had plans for a $40 million-to-$70 million project that would include a three-story parking garage and apartments for up to 1,200 students. He even had a rendering.

Several aldermen were apparently smitten and were ready to sell the lot to Vitas, who was prepared to fork out close to $1 million for the site. Mayor Ted Gatsas was resistant and insisted that the standard procedure be followed to dispose of city real estate, through the open-bidding process.

Then, in the days leading up to Tuesday's meeting, two other out-of-state companies, with considerable backgrounds in building student housing, came forward to express their interest in the site. And their introduction came via a letter from none other than Michael Castagna, the local real estate consultant who had been working with Vitas.

Was Castagna trying to sabotage Vitas' bid?

No, Castagna insists. The other parties were "unsolicited," he said. "They came to me through business contacts."

Castagna notes that the concept for student housing in the area grew out roundtable discussions he led five years ago, concerning how to revitalize the northern stretch of Elm Street downtown. Castagna said Vitas approached him earlier in the year about the student housing concept, and the Pearl Street site seemed like a natural fit.

Castagna said he got involved because it was an opportunity to bring part of the vision to fruition. "Even though we had no agreement, the hope was that (I might) become a program manager, that he'd want someone local who knows the ins and outs," he said.

Castagna said tension arose between him and Vitas because he had urged him to partner up with people who were more familiar with student housing. "You're not just building it, you have to have someone manage it. I think he felt I was being a control freak," he said.

In any case, Vitas decided he would handle his contacts with city officials on his own.

As the meeting approached, Castagna said, he felt an obligation to let the aldermen know that other companies interested in the site had more experience in what was a unique and novel form of development, private student housing. One was ready to pay quite a bit more than Vitas had offered for the lot. Attempts to reach Vitas were unsuccessful.

At Tuesday's meeting, a majority of aldermen voted to deal directly with Vitas and to come to an agreeable price with him. But they were overruled by Gatsas, who vetoed their motion. The aldermen then voted to issue the RFP. The Land and Buildings Committee is to review the document at its next meeting, later this month.

Ted Siefer may be reached at tsiefer@unionleader.com. Follow him on Twitter @tbsreporter.


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