The city of Minneapolis is joining the asset sell-off craze. The city put on the market eight municipally-owned parking garages that had a total of 6,700 parking spaces in prime real-estate locations in or near downtown.
The sale to three different buyers, approved by the city council in late July, will bring in more than $88 million for the city. The deal will help Minneapolis pay down its debt, including a $12 million deficit in its parking fund.
But Minneapolis won't just get a hefty check. The purchasers are being encouraged to redevelop the properties. At three of the locations, the buyer has already committed to a $30 million investment to build new commercial facilities on the property. And that is good news for the city since it stands to reap more revenue from a hotel, office or condo building than a parking ramp. "Not only will we get the sale of assets, the reduction of debt and the improvement of our financial situation," says Patrick Born, the city's finance officer, "we're also getting new taxable property."
Local labor advocates criticized the deal, saying it would mean that 200 parking garage attendants would lose their jobs. But the city stressed that the new developments would create more jobs. Minneapolis expects to complete all eight sales by the end of the year, but many could be finalized this month.