Savannah's funds shrunk a bit with the approval of several pricey items on the regular city council agenda Thursday.
Aldermen approved about $49 million in expenditures, plus $55 million in bonds.
Aldermen voted to allow the Downtown Savannah Authority to issue $10 million in general obligation bonds for the fund the West River Street parking garage. The garage is a public and private agreement with Richard Kessler, the developer of the Plant Riverside project.
The DSA is the city's bonding entity.
The deal with Kessler provides that the parking garage be constructed by his company. The garage will be owned by the DSA with the 488 parking spaces split between the city and the hotel. The city will have 237 spaces for public parking, the hotel complex will control 251 parking spaces.
Kessler signed a guaranty in 2016 that personally commits him to complete the garage, as well as pay the bond debt service payments. Kessler will also be responsible for operation and operating expenses of the parking garage and will pay the city $100,000 a year for 30 years, along with 1% of gross revenues for future repairs for about $35,000 per year and a payment in lieu of taxes.
Arena shortfall, water plant
The council also approved a $45 million bond issue with DSA for a funding shortfall for the city's new arena. Bonds will be used to fund the difference between Special Purpose Local Option Sales Tax receipts and construction costs for the new arena, is expected to cost $165 million.
Voters approved funding the arena project through SPLOST in two referendums which raised $120 million and $22 million. The city has also approved more than $21 million in arena-related contracts.
One high-priced item of the day was $39 million approved for a new water reclamation facility at Travis Field. The new plant is needed to provide wastewater treatment for development in the New Hampstead area and areas south of the Savannah-Hilton Head International Airport.
The plant will have capacity to treat four million gallons of waste per day. The capacity can be doubled in the future.
Arena parking
The city also approved a lease for arena surface parking at a cost of $3.5 million over five years. The lease with Tenenbaum, Inc. is for a 22-acre parcel on West Gwinnett Street.
Alderman Tony Thomas balked at the proposal.
"This is the first time I'm hearing about leasing parking," Thomas said. "I'm opposed to paying anyone $700,000 a year and know that in 10 years we will still need parking."
Thomas also noted the lease would be in force for about two years before the arena is constructed. Monahan said the city had looked at building a parking structure, but the costs are too high.
"The city can look at this again in four or years and evaluate whether to do a structure," Monahan said. "This is an interim move." Monahan said the city will also be using the leased site as needed during arena construction.
Thomas said he'd rather issue bonds than enter into another lease.
Mayor Eddie DeLoach said a parking garage is just too expensive for now.
"You'll be losing your shorts if you build a garage," DeLoach said. The city in April of 2018 moved the arena from the original planned location near the historic water works building, to the north, where a parking lot had been planned.
Thomas and Alderman Estella Shabazz voted against the lease.
Marathon, civic center
Aldermen approved a contract with Oak View Group to manage the civic center for a total cost of $238,000.
This agreement does not address operations of the planned new arena.
Alderman Bill Durrence objected to paying $25,000 for the Rock n' Roll Savannah Marathon.
The city has been paying the group the same amount for eight years to hold the event here.
"I have a serious objection to paying them $25,000 and for them to have it at the same time as the film festival," Durrence said.
Alderman Carol Bell said changing the contract now wasn't reasonable.
"Maybe next year," Bell said. It was then noted the Marathon agreement on the agenda is for a three-year term.
The Marathon is scheduled for Nov. 2 and Nov. 3. The film festival is Oct. 26 to Nov. 2.
Joe Marinelli with Visit Savannah said the city is able to accommodate two events on the same weekend.
Marinelli reminded the council that before the Marathon came hotel occupancy at the time of year was 55%. "It went to 66% and they've brought $10 million here in 8 years. I don't think any other event does that — not even St. Patrick's Day."
Alderman Brian Foster noted the $25,000 fee is used by the Marathon to market the Savannah race.
The contract was approved.
