Pete Furman

Council approves $17.5M contract for $26M garage – Sedona Red Rock News

The Sedona City Council voted unanimously on May 14 to approve the contract for the proposed Uptown parking garage to provide potential employee and customer parking for Uptown businesses at a contract price of $17.5 million, and a total cost of $26 million in public funds, after council members spent six hours discussing it and how much they disliked the price tag.

The current design of the garage as revised will feature 270 parking spaces, which will include six spots for electric vehicles and eight spots for motorcycles. Architect Jan Lorant described it as “a modest-size garage” that will “preserve the view of the mountainscapes” and utilize materials that “speak to the setting.”

The garage will also include 22 bike parking spaces, an information kiosk, a surveillance camera system, a solar array, a police substation, four restrooms, a server room for the city’s IT department and plaques discussing the history of the surrounding rock formations.

“It’s a wonderful amenity,” Lorant said.

“I think it’s a beautiful building,” Councilwoman Jessica Williamson said.

The current plan estimates that the garage will require another two to three months of excavation, involving both mechanical excavation and explosives, followed by nine months of construction with completion planned for August 2025. All components will be cast in place. Projected lifespan of the structure is 50 years.

Cost

Deputy City Manager Andy Dickey told council that the garage proposal was not put out to bid and that the proposed contractor, McCarthy Building Companies of Phoenix, was instead “selected early on through a qualification-based process” to work with city staff. Following the meeting, Dickey said that picking the contractor in advance was beneficial on complex projects by allowing them to give input on the design process and start getting bids from subcontractors.

The value of the construction manager at risk contract that the city awarded to McCarthy was $17,545,098. The city will incur another $5,133,133 in direct costs, mostly related to excavation and shoring, for a construction budget of $22,678,231. That equals $83,993 per space.

Costs already incurred by the city as part of the garage project include $1,089,053 for architecture and design work, $898,880 for land acquisition and related costs, $356,000 for utility removal and relocation, $65,000 for demolition and $61,000 for driveway relocation. The total estimated cost of the project as specified in the fiscal year 2025 budget is $25,999,668, of which $3,406,058 has already been spent, for a total cost of $96,295 per space. McCarthy’s construction fee will be 4.7%, or $824,620.

“We’re all shocked — stressed — about the price of the garage,” Councilman Pete Furman said, noting that in the San Francisco Bay Area, the typical price for a garage is around $40,000 per space, which includes seismic engineering costs. Furman cited a series of studies by WGI Engineering that found the average cost of a parking structure in Phoenix to be $26,274 in 2023.

Dickey and McCarthy representatives said the proposed cost of the Sedona garage was the result of travel costs for subcontractors, a competitive building environment in Phoenix, increased concrete use as a result of the garage’s flowthrough design, the garage’s small size, new information about needed utility relocations and the difference in cost between porcelain and stainless steel fixtures.

Dickey later said that “many of the general statewide cost estimates are already outdated, due to how fast construction costs are increasing.”

Assistant city engineer Bob Welch estimated that a less constrained site with fewer amenities developed through a comprehensive bidding process would reduce the cost of the garage by $8,152,800.

“A single wall-hung lavatory … is $3,781,” Councilman Brian Fultz said. “A urinal is $3,434 and a toilet is $5,184. That’s crazy. That’s just plain flatout crazy. I can go buy a Sloan vitreous china wallhung lavatory for $89 … This is called ‘sticking it to the man’ if I ever saw it.”

“That’s the cost that we have gotten from the market,” McCarthy estimator Ted Cholla said.

“I can’t justify this, either,” Mayor Scott Jablow said. “$2,300 for a mop sink?”

“We’re either going to support the staff or we’re not,” Vice Mayor Holli Ploog said.

As an alternative to building the garage, Dickey said the property could be completed as a surface lot with 70 to 80 spaces at a cost of $2.5 million.

Payment Plan

The city’s bond advisor, Mark Reader of Stifel, briefed council on two possible financing options for the garage.

Reader’s initial proposal was that the city pay the entire capital cost of the project by issuing $23.425 million in 2024 series bonds, which would result in debt payments of around $1.5 million per year. Alternatively, Reader suggested a second financing option in which the city would reallocate $18 million in outstanding series 2022 transportation bonds to pay for the garage, then issue $18 million in new 2024 bonds, $12 million of which would fund completion of the Forest Road extension and $6 million of which would be allocated to the garage. The advantage of the second alternative, Reader said, was that it would reduce debt service costs to the city’s general fund by roughly $340,000 per year.

City Manager Anette Spickard said that staff estimated parking revenues from the garage will be $1.78 million per year on the basis of charging $2.50 an hour at a utilization level equal to 75% of that of the city’s current paid parking for nine hours a day. Assuming garages expenses of $120,000 a year, Reader predicted $1.66 million in parking revenue would be available to cover the required bond payments.

“Maybe it should be $4 an hour,” Jablow said, while Dickey proposed a timebased fee escalator to deter employees from parking in the garage.

“I think we’ve been very fiscally conservative,” Kinsella said.

“It’s not about $6 million. That’s peanuts. That’s money we have anyway. We always have $6 million,” Ploog said, explaining that her concern was sacrificing other priorities to the garage.

While a majority of council members were in favor of the second financing alternative, council is currently expected to make a formal decision on the bond financing for the garage on Tuesday, June 11.

Public Comment

Only two members of the public spoke in opposition to the garage, 10 spoke in favor and three suggested the city defer a decision pending a more comprehensive study.

“A garage will strain our coffers and lower our credit,” Sean Smith told the council.

With one exception, all individuals who spoke in favor of the garage were either Uptown business owners or managers or associated with the Sedona Chamber of Commerce.

“This is our best alternative at this point in time,” Ally Hansen said. “As an Uptown business owner, we want this, we need this and the sooner the better as far as we’re concerned.”

“For 20 years this parking garage has been a goal of the city’s,” Sedona Chamber of Commerce President and CEO Michelle Kostecki said, adding that the design showed “sensitivity to the environment” as well as how the city listens to the residents.

“With over 300 employees between our businesses, we desperately need this parking,” said Colm O’Brien, of L’Auberge Resort.

“This garage is especially needed at the southern end of Uptown,” Chamber Board of Directors Chairman Mike Wise said. “Forest Road is the best location for a garage.”

“I cannot believe the cost of this project, but it’s not going to get any cheaper, and we do need parking,” former Vice Mayor John Martinez said. “Let’s make the decision.”

“It’s time to really support the businesses in Uptown,” said Jesse Alexander, of Sinagua Plaza.

“Kicking the can down the road is not really an option,” Al Comello said.

“Would an employee be willing to pay $400 a month for parking in Uptown?” Uptown resident Mark TenBroek asked. “The city needs to gather much better data.”

“There has been extremely limited resident involvement,” said Uptown resident Joe Zanni, one of the two resident members of the parking advisory committee. “The only people who have been named as stakeholders have been businesses and city staff … I think it’s extraordinary the extent to which residents are ignored. There is a citizen engagement program which really does not engage residents … all that the city has done is had horse-and-pony shows for people to show them how wonderful a job you have done and how great the final product is going to be.”

Zanni said of city staff that “their sole purpose has been to move forward with a garage.”

Unanimous Approval

“The price of this thing makes me very uncomfortable … it will never be cheaper,” Furman said.

“It’s just going to cost more … by waiting,” Jablow said.

“It’s not my priority but it is a priority for the city,” Ploog said. “It doesn’t get cheaper … I trust our staff.”

“I also choke a bit at the number,” Councilwoman Melissa Dunn said. “What I don’t want it to be is another million dollars more because we decided to wait.”

While Dunn also expressed concern over the possible health effects of dust from the project and the 70 decibel noise of the concrete pump, “we cannot draw any correlation between any spikes in bad air quality and our projects,” Dickey said.

“People were hysterical about $13 million,” Williamson said. “I support it. It needs to be done.”

“I don’t like it but I can live with it,” Fultz said.

“I’m looking at the audience and I’m seeing pain on people’s faces,” Kinsella said, but added that the proposed price was less than the amount she had decided on as a deal-breaker and would consequently support it.

Council voted 7-0 to approve the garage.

During the meeting, Spickard announced the engagement of Jean McGann of St. Paul, Minn., as interim finance director until the recently-departed Cherie White can be replaced permanently.

Council approves Bowers subdivision plat – Sedona Red Rock News

The Sedona City Council unanimously approved the preliminary plat application for the Bowers subdivision adjoining the Forest Road extension at its April 24 meeting, during which multiple members of the council suggested to the property owner that he should consider a use for it other than single-family homes.

The current 2.65-acre parcel at 741 Forest Road has already been physically divided into two portions by the construction of the Forest Road extension, and the subdivision process will split both those portions as well to create a total of four new lots, which will retain the original parcel’s RS-18 single-family residential zoning. To minimize access points, each pair of adjoining parcels will share a driveway.

City staff received no public comments in support of or in opposition to the project, and the Planning and Zoning Commission approved the subdivision on March 19.

“I think this is the fastest we’ve got through P&Z,” said Luke Sefton of Sefton Engineering Consultants, the agent for the project. “I like it when we don’t have a lot of neighbors giving comments. That’s a pleasant change. The only real issue is what to name the mountain of dirt that’s there now, so we’ll come up with a name for that.”

“Lots 1 and 2 are remaining natural, and they’re not bad to build on,” Sefton continued. “[Lots] 3 and 4 right now has that pile of dirt, and they’re building a wall around there … when we get done it’s probably going to be like a 3% slope for most of the lot there.”

“I’ve owned the property for some 27 years,” David Bowers said. “Originally when the property was acquired, it was acquired for the purpose of maybe considering a family compound there, so that we could build several units. Shortly after I bought the property, I had an unfortunate circumstance where I had open heart surgery and I kind of lost interest in developing, so I just sat on the property after that. The property is intended to go to our kids … we have four remaining sons … So it’s really an inheritance.

“I bought it because of its location, and the reason we’re really here today is because the road creates a lot of issues that have to be dealt with at this time,” Bowers added. “For example, the biggest issue and the thing that was the driving force on the lot split was the fact that we have to get utilities to each parcel before the road is set in stone and asphalted, because there’s time limitations where you’re unable to develop the property or bring utilities in and disturb the road after it was built. That was the motivating factor at this time. We are considering all possible uses for the property, and I think at a later time we will probably discuss that with members of the city council.”

Alternate uses for the property were the primary topic of interest for the members of the council.

“Was there ever any interest in seeking a zone change to put more density in there?” Councilman Brian Fultz asked.

“No … we’re going to get it flipped. We need to get the four lots in there and then see what the market does,” Sefton said. “The applicant’s not planning to build on it right now. They’re not builders.”

“So the thought for the future for a potential rezoning would be to zone it commercial?” Vice Mayor Holli Ploog asked.

“That, or multi-family, which is commercial,” Sefton said.

Councilwoman Kathy Kinsella wanted to know if there had been any consideration of “putting a deed restriction in for short-term rental ban.”

“Because they’re developing under their current zoning and aren’t asking for a change, that’s not something we can ask for,” Planning Manager Cari Meyer said.

“Was there any discussion of it being offered?” Kinsella asked. “Was it on the table in any way, shape or form from the applicants?”

“They did not offer it,” Meyer said.

“I share some of the concern that maybe this isn’t the highest and best use of the property, but the owners have some rights, and we have to respect them,” Councilman Pete Furman said before asking whether it would require different work to install utilities for single-family versus multifamily development.

“There’s additional conduit being placed as well that will be able to provide capacity,” Deputy City Manager Andy Dickey said, and confirmed that staff did not expect any delays in the completion of Forest Road due to the subdivision utility work.

City Attorney Kurt Christianson noted that the developers will have to have their plans submitted and approved by the city by Sunday, June 30, according to the current schedule.

“I just want to make a plea to people who are developing property in Sedona that short-term rentals are a real problem for this community and that I would really urge developers … to consider deed restricting the property to prevent the further proliferation of the destructive short-term rentals that have taken over our community,” Councilwoman Jessica Williamson said.

“This is an absolutely plum opportunity for multi-family housing in the future,” Furman added, before agreeing to let the present plan move forward.