GRAND RAPIDS — City commissioners gave the city’s Building Authority the green light to issue bonds for a new parking ramp to be built near the intersection of Cherry Street and Commerce Avenue SW in the Heartside Business District.

The total package is not to exceed $7.2 million, not carry an average interest rate higher than 5 percent per annum, and have a term of 30 years. The authority is expected to price the bonds next week and close by the middle of next month.

The city would then lease the ramp from the Building Authority.

“We will be off to the market with this contract,” said City Manager Kurt Kimball, who also chairs the Building Authority.

But if the authority can’t, or doesn’t, issue the bonds by the end of March, then the ramp project would be abandoned.

The entire cost of the project is expected to be $10.45 million. In addition to the bonds, the city’s Parking Services Department, which will make the bond payments, is picking up roughly $3 million of the cost in cash through its reserve account.

City CFO Scott Burher said Parking Services had enough working capital to make the investment, as the account had nearly $6 million in it last summer. Burher estimated the new ramp would return $700,000 in revenue in its first full fiscal year, while expenses would reach about $225,000 over those months.

The ramp has been designed as a six-story building with 313 spaces. The business district needs the parking following the demolition of the former City Centre ramp at Fulton Street and Division Avenue. Parking Services Director Pam Ritsema said 283 of the parking spaces have already been reserved on a monthly basis.

Results from a Heartside parking study released last year called for a new ramp to be built in the district, but the report said it should have 1,000 spaces to accommodate the demand.

Monthly parking is expected to cost $110 in the new ramp, which the city hopes will be open by the end of next year.

“If the ramp is full and is used for (arena) event parking, at $110 a month that should cover debt service, operations and maintenance,” said Ritsema in July.

Monthly parking throughout the city-owned downtown system is becoming scarce. As of this month, Parking Services had issued 6,744 monthly access cards. Only 5,768 cards were active in 2002, meaning nearly 1,000 have been put into play in the past four years.

Ritsema said earlier this month that only 482 monthly cards were available throughout the system, which consists of 20 ramps and lots.

“People are adding employees, and there are new businesses. But they tend to be smaller: three or four people,” she said. “We couldn’t handle a big employer.”

The actual construction of the ramp is expected to cost $7.62 million. Acquiring the land cost $925,000. Parking Services bought the property from Cherry Street JV LLC, a joint venture between Rockford Companies and RDV Corp. The parcel measures 20,576 square feet and carries a per-square-foot price tag of $45.

Other costs — including design, administration and contingencies — brings the total outlay to $10.45 million.

Parking Services is making about $2 million in bond payments on the Monroe Center, Ottawa Fulton and Pearl Ionia ramps this year. The department made its final payment on the Louis Campau ramp last year, which frees up $450,000 that Parking Services can devote to the new ramp.

Walker Parking Consultants of Kalamazoo and Design Plus of Grand Rapids provided the engineering and design services for the project. Rockford Construction Co. will manage the work, which should get under way next month and take a year to complete.

Ritsema said last February that her department was considering installing automated pay stations in the new ramp, which would be a first for a city-owned parking garage. Three of those machines, made by Amano of Rosedale, N.J., would cost Parking Services $120,000.

“At that rate, (the machines) probably have a four-year payback,” she said.

If the ramp ends up costing the estimated amount and if it contains 313 parking spaces as has been projected, that would mean each space would cost $30,456 to build. That figure doesn’t include the $925,000 the city spent on acquiring the property.

The $10.45 million is not the most money the city has spent on a ramp. But on a per-space cost basis, the new Cherry Street garage would be the most expensive the city has built.