A municipal parking garage for 14th and U? It would not come cheap

A number of businesses and residents around 14th and U Streets are interested in trying to create a municipal parking garage in a large government-owned parcel on S Street. Is this a good use of the land? What if it cost $4 an hour, or required heavy subsidies from the DC budget?

The DC Department of Parks and Recreation now uses the property, 1325 S Street NW, to park vehicles and for other service uses. Proponents of a municipal parking garage suggest an above-ground parking structure lined with retail or residential, or an underground garage with buildings or a park on top.

But those advocating for the garage assert that it would pay for itself. Based on a quick analysis based on numbers from parking experts, it seems likely that such a garage would have to charge $3.50-4.50 per hour just to break even.

Do those supporting this garage idea realize that would be necessary? Or, if a garage would require significant ongoing subsidies to operate, is there a good reason to spend public money on making parking cheaper in the hot Logan Circle and U Street area?

A committee of Logan Circle’s ANC 2F heard a presentation on the concept in January, as did ANC 1B in March. The concept is getting support as a part of a larger effort to establish a Business Improvement District for the area, and the JBG Companies, which owns a lot of properties nearby, has given $150,000 to help set up the BID.

A lot of the impetus is coming from the Studio Theatre at 14th and P, which, the presentation said, saw “significant reductions in their show subscribers and customer base, largely due to the lack of available public parking.”

Arguments for the garage

Recently, many residential blocks in the area got the “red sign” parking restrictions that limit parking on one side of each street to residents with the appropriate ward sticker (1 or 2, depending on where in the area you’re talking about). That has made parking easier for residents (or people driving in from places like Mount Pleasant or Georgetown in the same wards) but even scarcer for others.

The presentation to ANC 2F claims that there are not many buildings with “abundant nighttime parking” in the area, and that “case studies of many great urban areas show how centrally-located public parking facilities solve transportation issues and spur economic development (locally, including Clarendon, Bethesda, and Shirlington).”

Architect Roger Lewis praised the idea in a recent column for the Washington Post, where he suggested cities need a “flexible approach” to parking. He said,

Along 14th Street for several blocks north of P, public parking is a scarce and expensive commodity. Moreover, the nearest Red Line and Green Line Metro stations are a half mile or more away, just far enough to be a challenging walk for older folks, for people with disabilities and for parents with very young children in tow. …

Either the city or a parking garage operator could construct and manage the garage, which would be self-financing. From such a garage, people could comfortably walk or hop on a local shuttle to reach their destinations.

How much would this cost?

Is this a good idea? Certainly parking is often difficult in the area. If one could make parking easier, without any costs or tradeoffs at all, that’s not a bad thing. But it’s always important to understand the proposal clearly.

There are plenty of arguments to be made about the garage. I will get into most of those in part 2. First, we need to talk about cost. How much would this cost the DC government? How much would people pay to park? Often in these discussions, people make assumptions that turn out not to be true. Let’s delve into them.

Lewis suggests a garage would be “self-financing.” What does that mean? Does it mean that a private company could afford to buy the land at market price, build a garage, run it, and break even? (Probably not, because if that’s true someone would probably have done it).

Does it mean that the city would lease the land for free to the operator, who would then build a garage and maintain it? Or would the city have to pay for a garage which then an operator could maintain?

Many suggestions to build parking (like the National Coalition to Save Our Mall’s proposal for the National Mall) assert that garages will pay for themselves, but often without numbers to back up the assertion.

Fortunately, the Victoria Transport Policy Institute has some detailed research on the cost of parking structures. Their report estimates that an urban parking garage costs about $18,000 per space to construct, and $600 per space per year to maintain. Karina Ricks of Nelson\Nygaard says DC has higher costs than around the county, so $20,000 would be a better estimate.

If a property pays no taxes, therefore, the annualized cost of construction per space, plus maintenance, is $1,569 to $1,744 at a 6% interest rate. With operating costs, that’s $181-195 per space per month. Already, this rivals the cost one would pay for an off-street space in the neighborhood, meaning that the revenue from parking is unlikely to even pay for just constructing and maintaining this garage.

Plus, we haven’t even talked about land. This property is about 2 acres. The square to the west, once you get past the commercial area right along 14th, has about 120 townhouses in 5.74 acres. The property assessment database shows that DC assesses the land for each townhouse at $400-500,000, so at an average of $450,000 per townhouse, that’s $9.4 million in land value per acre in this area, comparable to what VTPI lists for center cities in most of the country.

For a 4-level parking structure of 130 spaces per level, that’s $36,000 more in land costs per space; for a smaller 3-level garage, it would be over $48,000. That adds $263-$351 per month to the parking cost.

Oh, and that’s just if the garage is above ground. Move it underground, and your construction cost skyrockets. Ricks says DC construction costs usually run around $60,000, or $5,231 per space. That makes the monthly cost per space about $486 per month with operating costs, even if you ignore the cost of the land entirely. You can do that to some extent because you can still build something else on top of the garage, though that building then becomes more expensive, and having a commercial garage below diminishes the value of whatever can be built there.

The price per hour to break even is…

How much would the garage have to charge per hour to recoup these costs? Ricks said that a very generous estimate would assume the garage averages 70% full each day over an 8-hour peak period of 4 pm to midnight.

This assumes the garage is totally full at the busiest times, like Saturday at 8 pm, tapering off toward the edges with low occupancy on weeknights at 5 or 11 pm. There will be little if any revenue from the daytime in this area, which has few offices except the Reeves Center, which has its own garage.

If Sundays and holidays stay free, that is 270 days per year. With the numbers from above, the garage would have to charge $3.52 to $4.33 per hour just to recoup its costs, whether it is underground or above ground.

You can see all of the math and calculations on this spreadsheet (XLS).

Would people really park in the garage?

So, we’ve got a parking garage which costs $3.50 or $4 an hour to park in. To go to 14th or U for dinner, that would set you back maybe $10-15. The presentation to ANC 2F CDC suggests that a garage would “relieve parking pressure on nearby streets and reduce circling.” That’s only true if it is considerably more desirable than parking on the street.

Right now, it’s not. At night, it’s free to park on the side of the street which isn’t reserved for residents of the ward. Lots of people (including myself) circle for long periods of time in Georgetown to find free spaces or cheap metered spaces even though there is pay parking, because the cost is so different.

If this garage has to pay for itself, it would provide some parking, but that probably wouldn’t be cheap enough to dissuade people from trying for a street space. We could change the on-street policies to charge more of a market rate there, but then would a garage be necessary?

For those who don’t want to circle, there are businesses with valet parking on 14th and U already. Le Diplomate, for instance, has valet parking for $12. It seems that there are options to park if you are willing to pay a market rate, and building a garage wouldn’t lower the market rate.

One problem with many of these parking proposals is that they assume, on the cost side, that the garage would make so much revenue to not cost the public anything, but on the other hand they assume that the parking is cheap enough to not cost the public much there either. It can’t be both.

Cost isn’t the only reason to build or not build a garage. In the next part, we’ll look at other arguments for and against the proposal.