FALL RIVER ─ A real estate appraiser’s prediction the City of Fall River would have a tough time selling off the Pearl Street garage because of a 30-year lease agreement that ceded its control of the structure’s use and pricing, wasn’t far off the mark.
It turns out the only responsive bidder to the sale of the Pearl Street garage is the holder of the lease, James Karam of the First Bristol Corporation.
And according to Karam’s proposal submitted on Monday to the Purchasing Office, the deadline day and the bid opening, the local developer isn’t offering to pay the minimum asking price of $1.4 million on the parking garage assessed at $2.6 million as is.
The terms of the request for proposal allows for bid lower than $1.4 million if the bidder can justify the reason for a lower sales price.
The city had planned to fund the rehabilitation of the Pearl Street and Third Street parking garages, but dashed plans to invest in improvements at Pearl Street due to the lease agreement with Karam that is good until 2043.
Work is currently underway at the Third Street garage which is closed until around November.
Reasoning for a low bid price
The number Karam’s offering to pay for Pearl Street is still sealed until a committee, recently formed, vets and scores his bid proposal, as required by state procurement rules.
Karam’s bid does identify that a lower sales price would be appropriate because the city expects the structure built in 1980 would require more than $5 million in repairs.
Ironically, Karam’s second justification for a price below the minimum, “an existing lease that limits near-term operating flexibility,” without identifying himself as the leaseholder that directly affects the garage’s sale.
In Karam’s proposal, he indicates that he intends to rehabilitate the Pearl Street garage and manage its operations.
And Karam’s bid proposal comes with its own conditions that include the property being unencumbered by urban renewal plans, zoning, leases or public access.
The Pearl Street garage is mentioned in the Fall River Redevelopment Authority’s Urban Renewal plan as an important asset to the downtown and the only known lease is his own agreement he made in 2013 with FRRA at the time.
Karam sole bidder for lease in 2013
It’s not the first time Karam was the lone person to answer an RFP regarding the Pearl Street garage.
During negotiations to purchase 99 South Main Street, the former Aetna building, Karam indicated that the sale was in part dependent on a lease for parking spaces at Pearl Street.
Karam offered to rent at least 150 spaces and up to nearly 400 spots available at the parking garage for $35 a month for 10 years with five-year options with modest increases every five years.
According to FRRA meeting minutes in 2012 and 2013 obtained by the Fall River Reporter in a public records request, after the city transferred ownership of the Pearl Street and Third Street garages to FRRA in 2012, the redevelopment authority upped Aetna’s monthly lease to $45.
After the agency went out to bid for a parking lease, Karam was the only bidder, and the FRRA’s board at the time unanimously accepted the terms of his proposal.
Karam then received a $2.85 million loan from a Boston bank, just five days after signing a long-term, discounted parking rights lease for the Pearl Street garage in 2013 and used the parking agreement as collateral.
