Dover takes first step to building parking garage

DOVER — A City of Dover committee opted for a low-risk approach Tuesday in a first step toward constructing a downtown parking garage.

The Legislative, Finance and Administration Committee — at the bi-monthly Council Committee of the Whole meeting at City Hall — unanimously approved a staff recommendation that authorizes City Manager Donna Mitchell to enter into a contract with Ballard Spahr LLP.

The contract is for “legal services for the purposes of conducting solicitations and negotiations for a downtown parking garage.”
The city is looking to build a downtown parking garage through a public private partnership (P3) and is hoping Ballard Spahr, the city’s current bond counsel, can help guide it through the process.

Mrs. Mitchell said the proposal is expected to cost between $100,000 and $150,000 and the city has budgeted $200,000 from its’ budget for consulting services.

City Council President Tim Slavin pointed out that the $1 million the city received from the state in June is strictly reserved for the actual construction of a parking garage.

“Council members have expressed an interest in a downtown parking garage and staff reached out to Ballard Spahr, which is our bond counsel, for assistance from their P3 (Public Private Partnership) infrastructure group for this project,” Mrs. Mitchell said.

“Also, the city will have the expertise needed for the project in subsequent (P3) negotiations. Use of the bond counsel will also provide confidentiality of competitive pricing in the negotiations.”

In a July 9 letter to the city of Dover, Ballard Spahr said that Steve Park, a partner and the head of Ballard’s P3/Infrastructure Group will lead the Ballard team for the engagement.

Ballard Spahr said it also anticipates that other members of its core team will include Sara McCormick, a senior associate in its’ Real Estate department and Stephanie Kim, an associate in its’ P3/Infrastructure Group.

It will supplement the core team with other lawyers with expertise in tax, real estate, public finance and other areas.

Mrs. Mitchell added the agreement can be terminated at any time by either party for any reason by written notice.

The city’s engagement with Ballard Spahr will be broken down into two phases.

Phase One will include preparing a Request for Qualifications and Request for Proposal for the selection of a preferred vendor.

Ballard Spahr will assist the city with evaluating responses, participate in meetings with proposers and internal city meetings, draft project documents and research potential financing options and other items as necessary for the project.

The estimated cost for Phase One is between $60,000 and $75,000.

Phase Two of the engagement will commence upon the selection of a preferred developer for the project and will end upon closing.

It will include finalizing and negotiating project documents, participating in meetings with the preferred developer, internal meetings and conference calls, finalizing due diligence and research with respect to potential financing issues, assisting the city with governmental and regulatory permits, advising the city on related legal issues including environmental, real estate, tax and financing issues, and any other items needed for the project’s successful closing.

Phase Two is estimated to cost between $40,000 and $75,000.

Fred Neil, city councilman for the 3rd District, said he thinks the city is being wise in gaining Ballard Spahr’s expertise for help in trying to bring together a public private partnership for a downtown parking garage.

“Normally I’m not in favor of private public partnerships because I want to make sure the citizens get the best bang for their buck,” Councilman Neil said.

“But I think in the case of this garage it would be to our advantage to be able to enter in a partnership which would lessen perhaps the risk and strengthen what we’re able to do regarding that building. So, I’m in favor of this.”

City President Slavin agreed with Councilman Neil.

“I think part of what Councilman Neil said really kind of speaks to why I think this is such a wise way to do this and a smart way to do this project, and that is it reduces the risk for us,” Mr. Slavin said.

“We have someone else who handles the risk and goes through the proposals in a transparent way. If we didn’t go this route and went through the traditional route, we would be looking right now at engineering fees and architectural fees to see if we could afford to go forward, and it’s very risky at that moment.”

Mr. Slavin added, “This is very low-risk for us and the other part of it is once we get our first successful P3 under our belt, we’ll have that experience and will be able to do it again.”

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