Appraisal Finds Fall River’s Pearl Street Garage Sale or Repairs Unlikely Due to Long-Term Lease

A request for proposal to sell off the Pearl Street garage is expected to be released in August, but an appraisal on the property completed in March indicates it will be a hard sell given a long-term lease agreement with local developer James Karam.

For years, different administrations have discussed the increasing dilapidation of both the Pearl Street and Third Street garages and how to pay for the renovations.

In the last few years due to safety concerns, the top decks have been shuttered at both Pearl Street and Third Street. 

Of the 374 parking spaces at Pearl Street only 261 spots are useable.

Structural engineers studied the two structures, and their reports indicated both were sorely in need of repair. 

There has been movement to repair the parking garages with the support of the City Council. Recently a $6.5 million renovation project began at Third Street with the City Council approving a bond to cover the cost.

APPRAISERS: Pearl Street Garage sale unlikely

After Mayor Paul Coogan ordered an appraisal done on both garages the likelihood of fixing Pearl Street went out the window.

According to the 121-page appraisal, the garage is a “critical asset” to the downtown, but capital improvements and an increase of fees are a must “to maintain and enhance the facility’s value and functionality.

However, the long-term agreement with Karam, it’s well below market rate monthly payments and his option to potentially claim the entire parking garage until 2043, it would not make sense for the city to invest millions in repairs.

“Given the subject’s role as critical downtown parking infrastructure, limited revenue generating capacity at prevailing municipal rates, and the importance of maintaining public access to parking, disposition to a private investor is considered unlikely,” wrote appraisers from BBG Real Estate Services.

“Absent significant public funding, subsidies, or other financial support mechanisms, the renovation and continued operation of the garage would not be financially feasible on a purely market-driven basis.”

Per the agreement, Karam is currently paying $39.22 a space per month. The appraisers indicate in the report after comparing fees charged in other communities similar to Fall River, the city should be charging $125 a month for a parking space.

At $125 fee could potentially earn the city $533,000 annually.

The appraisers also assessed the next 18 years of the below market fees Karam is paying. Calculating that if Karam takes the option to rent all of Pearl Street, which he has yet to exercise, the city stands to lose about $3.3 million in that time frame.

The appraisers concluded that the value of Pearl Street without repairs is $2.6 million, and with repairs it’s valued at $3.5 million. The estimated $3.5 to $6.5 million needed to repair the garage makes it hard to justifying the City repairing the garage or someone buying it as Karam would have rights to all the 374 spots.

Fall River Mayor Paul Coogan declined to provide a comment for this article.