 Guest Post by Bruce Danielson
Questions not gaining any discussion in the new proposed Sioux Falls downtown parking ramp is who is paying for the foundation, why and how much. The construction of any building requires a foundation to anchor it to the ground. The much touted 2014 Walker Parking Study reported a parking ramp in downtown on the very same “fractured” quartzite stone would cost about $9 million. Why does this building all of a sudden have fractured stone problems?
According to city parking staff and studies, parking ramps have a 50 year life. What will happen to this ramp in 50 years with an 80 year building lease on top of it?Â
Â
How do we pay for upkeep when our reserve funds are all used up? We will be using all our reserve funds to build this ramp. The more we put our numbers together, the harder it is to see how it can pay for itself.
Â
A $1million dollars for 80 years lease? No inflation factoring? No future value of money put into a formula? Using history (I know dangerous) as a guide, $1,000,000.00 in 1937 had the same buying power as $17,245,142.86 in 2017, the annual inflation over this period was about 3.62%. An example from savings.org tells us a conservative inflation rate of 3% over the next 80 years would be $10,640,890.56.
Â
What’s a million bucks going to be worth in 2097? We know our mayor’s version of bucks is not likely to be the same as ours but we must consider real money and not the funny money of a subprime credit card salesman.Â
Â
What will the future residents of Sioux Falls accuse us of when the lease ends? How are these residents suppose to fund the implosion of this building when the lease ends? Why is there no discussion of this in the grand plans for the parking ramp? Every longterm rental agreement has inflation adjustments and site cleanup, why not this one?
So many questions and no consistent answers. The story changes every time there is another question not fitting the city narrative.
It’s a problem that the mayor is unaccountable when it comes to giving money for private ventures. The council may vote it down but the mayor will veto. It’s gonna happen.
Another way of looking at this “great” deal. If you owned the most prime city block of DT Sioux Falls, and that property generated $121,500 a year in revenue, would you sell it for $1,000,000? Legacy must be laughing all the way to the bank.