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.
