SoHo development company claims city has breached parking contract

Editor's note: This article was updated April 23 to remove a reference to an outdated sale contract between the city and the owners of the Soho property, which was replaced with a newer development agreement.

The owners of the SoHo Square condominiums and retail in downtown Homewood believe the city of Homewood has violated its contract with the development, due to a new parking agreement with the planned hotel and retail development on 18th Street South.

Bubba Smith and Scott Bryant of SOHO Partners, LLC, sent a letter to the city, City Council President Bruce Limbaugh and city attorney Mike Kendrick on March 19 stating that Homewood has violated city parking regulations and breached its covenants with the SoHo development, which shares use of an underground parking deck and lot behind Rosewood Hall.

The source of this violation, SOHO Partners says, is an incentive agreement between the city and MAM Investments that was approved in December 2018. MAM Investments will construct a 129-room Curio by Hilton hotel and 10,000-square-feet of new retail development on the east side of 18th Street South.

Due to concerns about overall parking availability in the downtown area, the city’s incentive agreement stipulated that all employees of the future hotel and storefronts must park in the parking deck under Rosewood Hall. The incentive agreement will rebate 75 percent of new lodging tax revenue earned on the property up to $10 million or 20 years.

Bryant said they viewed this part of the incentive agreement “as a direct violation of our covenant and easements.” SOHO Partners made several complaints in their letter to the city, which was preceded by a meeting with city officials on the same subject.

Their core issue is that requiring employees of another development to use the parking deck will change the parking density, “interfering with the free and unrestricted use of the parking areas for their intended purposes.”

As part of covenants between the city and SOHO Partners in October 2005, the SoHo condominiums have ownership of roughly 76 parking spaces in the deck under their buildings on either side of city hall, for the use of residents. The covenants also state that the development has “a perpetual, non-exclusive easement” to use other parking areas in the rest of the deck or municipal lot “to the same extent as such areas are available to the general public.”

Kendrick said the parking deck and municipal lot are owned by the city and are available to all members of the public equally. He said this includes employees of the 18th Street hotel and retail development.

“The city’s stance is very simple: the parking deck is a public parking deck, available to the general public, and we’re in compliance with every agreement cited in this letter,” Kendrick said.

Smith and Bryant said they believe requiring those employees to park in the deck creates an “exclusive” private use of the parking, contrary to the “non-exclusive” uses outlined in the covenants between the city and SOHO Partners.

The letter from SOHO Partners also states that the city breached its contract by failing to obtain approval from SOHO Partners before creating this parking requirement for MAM Investments.

However, Kendrick said the parking deck was built with public bond funds and is completely owned and controlled by the city, except for the spaces under the condos that SOHO Partners purchased.

In 2005, SOHO Partners purchased the two 25,000-square-foot parcels where the condos and retail are now built, including the parking underneath them, for $2.8 million.

While the development was still in the planning phase in October 2004, the city and SOHO Partners entered an updated development agreement that stated the city was responsible for the construction of the parking deck as part of its construction of Rosewood Hall and the plaza. The agreement also stated that SOHO Partners would give the city a surface parking lot, identified as the “Huffstutler’s Parking Lot” behind Rosewood Hall, for additional parking, and the condo homeowners association would be responsible for a third of maintenance and repair costs for the deck.

Parking around downtown Homewood is frequently congested, particularly at peak lunchtime hours, and it is an ongoing concern for area business owners.

The city conducted a parking study in June 2017 through the Regional Planning Commission of Greater Birmingham, which showed parking on 18th Street is near 100 percent occupancy and the lot behind Rosewood Hall is at 90 percent occupancy from 10 a.m. to 4 p.m. The parking deck, however, is only about 40 percent occupied during the day.

The RPC said this data did not show a need for additional parking, but rather better enforcement of parking time limits and signs directing drivers to underutilized areas like the deck.

The city chose to increase its parking time limit on 18th Street South from two to three hours in August 2017 and increase enforcement. New parking signage is also part of the downtown master plan that is in the works, and City Council members have encouraged businesses to have employees park in the deck during discussions of parking availability.

In the deck, Kendrick said parking is allowed for up to 24 hours at a time.

SOHO Partners’ letter said they do not believe the city has done an adequate job enforcing parking time limits in downtown.

Additionally, SOHO Partners claims that by including an offsite parking requirement in the incentive agreement with MAM Investments, the city “illegally provides the hotel with a parking variance without going through” the Board of Zoning Adjustment.

MAM Investments submitted a final development plan to the Planning Commission in August 2017 and the City Council in September 2017, after previous proposals had been rejected or revised due to building height and parking concerns. A copy of this final development plan shows a total of 211 parking spaces, 40 of them on a gravel auxiliary lot at the corner of 27th Avenue South and 18th Place South.

Both the Planning Commission and the City Council approved the plan and the developers neither sought nor received a parking variance.

Building, Engineering and Zoning Director Wyatt Pugh said mixed-use zoned properties, like the 18th Street hotel site, must have development plans approved on a “case-by-case” basis.

The city’s zoning codes state that parking space requirements in mixed or joint use properties “shall equal the sum of the requirements of the uses computed separately.” Hotels require one parking space per room and retail requires two to four spaces per 1,000 square feet, depending on the type of business occupying the space.

“The parking requirements for various retail uses are very different. For that reason, the developer will have to propose a reasonable number of spaces for consideration. If accepted, that will be the final number. That is the flexibility of a ‘planned’ district — if something makes sense in the big picture, it may be approved even if it would not meet ordinance requirements in other commercial districts,” Wyatt said via email on March 26.

Mike Mouron of MAM Investments has not released information on the types of businesses that would occupy the planned 10,000 square feet of retail. However, adding the hotel and retail parking requirements together show that the 18th Street development would need 149 to 169 parking spaces, below the 211 planned and therefore not needing a variance.

Mouron declined to comment on the parking situation or SOHO Partners’ letter to the city.

Smith and Bryant said they were giving the city 30 days, or until April 18, to respond and remedy the situation by removing the parking requirement from the agreement with MAM Investments and finding another solution for the development’s parking.

The letter from SOHO Partners said they will then pursue “remedies at law and in equity,” though the partners did not provide more specifics on their next steps.

“We’ll go to the next step in the process to continue to not allow this to happen,” Bryant said.