Parking Authority OKs loan to repair Walnut Street garage
Panel approves $1.3M; consultant hired to create emergency plan
The Bethlehem Parking Authority approved a $1.3 million loan to make repairs to the Walnut Street Parking Garage and hired a new consultant to study the condition of the garage and create an emergency repair plan.
The 10-year loan offered by Jim Thorpe National Bank was approved at the authority’s Wednesday meeting. It has a 2.8% fixed rate with an average annual debt service of $158,487. The loan will not be guaranteed by the city, meaning taxpayers will not be on the hook should the authority fall short on its annual payments.
Last month, it was estimated the garage needed $800,000 in immediate repairs to continue safely operating.
Steve Fernstrom, the executive director of the Bethlehem Parking Authority, said some extra money was built into the loan as a contingency to account for possible change orders. The authority will only pay interest on the amount of money used and is not obligated to take the full $1.3 million. There are no penalties for paying the loan off early.
The loan is also considered a subordinate loan, which means that should the authority default on its debts, repayment of this loan is secondary to its more senior bonds. The authority issued bonds in 2015 for $9.5 million, $15.4 million in 2016, and $18.5 million in 2019.
The money from this latest loan should be available by the end of April.
The authority also looked at a five-year-term at an interest rate of 2.05% but the 10-year option gives the authority more flexibility in paying off the loan and there’s no penalty should they pay it off early, said Chris Bamber, a senior managing consultant with PFM Financial Advisors, LLC., the authority’s financial adviser.
The authority has been considering replacing the Walnut Street garage and was undertaking a feasibility study with Desman Design Associates to determine what type of structure could replace the garage, how much parking would be needed and where displaced vehicles could park during construction, but the authority abruptly terminated all of its contracts with Desman earlier this month.
On Wednesday, the authority ratified an agreement with THA consultants for $11,900 to study the condition of the Walnut Street garage and create an emergency repair plan.
At their Feb. 24 meeting, the authority hired Desman for $58,000 to identify and manage the emergency repairs, but decided during a closed-door meeting earlier this month to cancel all contracts with Desman.
“We just felt that with such an important project for the City of Bethlehem, it was best to get a fresh look through the lens of a different parking engineer and consultant,” Fernstrom said.
THA’s condition report will be similar to a June 2020 report from Desman examining the garage’s infrastructure, Fernstrom said. As for the feasibility study, Desman was still early in the process and so far had determined how many spaces the new garage will require.
That information is still useful and could be used in a future study. For now, the authority won’t continue with the feasibility study until they get the condition report back from THA likely in mid-April, he said.
Desman’s report from last June found the garage was in poor condition and would require a major overhaul to continue safely operating. It estimated $12.6 million in repairs are needed over the next five years and $23.7 million in the next 20 years.
Also at Wednesday’s meeting, the authority adopted a policy of using sustainable design standards and operational practices on all of its new and existing parking structures. In addition to the Walnut Street Garage, the authority also plans to eventually replace the Polk Street Garage.
New garages will be built and managed in accordance with Green Business Certification Inc. Parksmart guidelines. Initiatives could include using solar power when appropriate, using environmentally friendly cleaners and sourcing construction materials from within a 250-mile-radius to cut down on transportation costs, Fernstrom said.