Apparently I’m not the only person in town who shuns the surface parking lot as a soul-deadening blot on the landscape — or who thinks it’s not exactly the highest use of God’s tundra.
Among the throngs of candidates vying for public office in Minneapolis this election cycle are at least two who — in contrast to Ronald Reagan (“Tear down this wall, Mr. Gorbachev!) — want to see some walls go up. They are mayoral candidate Jackie Cherryhomes, former City Council president (1989-2001), and Diane Hofstede, who is battling a challenger to keep her 3rd Ward council seat.
At a recent debate, Cherryhomes said that as mayor, she would do something to make sure that some of downtown’s 120 surface parking lots get developed. I think there may be as many as 140, but the final count doesn’t matter. They stretch like ugly fungi next to or across from some of the city’s proudest buildings — the Cowles Center and the Central Library, to name two. Likewise, in a recent mailing, Hofstede says she’s for “proposed new residences and businesses to replace surface parking lots.”
I am totally with these ladies. Hofstede’s vision seems to be rather limited; she’s for projects already in the works, such as the Wells Fargo office and residential complex in the Downtown East neighborhood that would, one hopes, complement the new Vikings stadium, assuming that the Wilfs and the Wellses don’t bug out on us.
Cherryhomes, however, has a more expansive approach. She wants to see new buildings rising from the blacktops. Obviously, that can’t happen with the wave of a magic wand.
“I don’t have any specific ideas,” she says. “The real challenges are legacy lots.” By those, she means lots handed down among families that produce a lot of cash flow. “We have to convince those people that they don’t need to own those anymore.” The problem needs a lot of analysis, she adds.
She was happy to hear when I told her that the analysis was done. HR&A Advisors, a consulting group, had recently completed a $40,000 study (PDF), which by the way, focuses on Downtown East — the neighborhood most plagued with lot fungus — for the city’s department of Community Planning and Economic Development (CPED); Cherryhomes didn’t seem put off by the fact that it was 84 pages long. (Would-be mayors, I guess, are gluttons for work.)
Anyway, the analysis makes it obvious that transforming parking lots into buildings will be a tough task; the financial incentives just aren’t there — at least not yet.
The study divides owners into three groups:
• First, there’s the legacy group of individual owners Cherryhomes spoke of. They have no incentive to sell their land unless it fetches a whopping price because their return (from parking fees) is so high right now. And even if they were tempted to sell, there would be no place to invest their wad that would produce a comparable return. Money market funds or bank accounts? Somehow 0.2 percent per year doesn’t cut it. The stock market might work, but, unlike a downtown parking lot, it’s risky and volatile. And, because the city has put a damper on new surface parking lots, these owners can’t just buy or create a new lucrative lot elsewhere. So they hang on.
• The second group is made up of employers, and their parking lot is a perk they give to their staffers. They could sell off their land to a developer, but that would mean either infuriating their workers or finding them new parking elsewhere without significantly upping their expenses.
• Developers themselves are the third group. They bought land in hopes that someday it would be worth building something on. As long as the money they collect from parking fees is enough to pay the property taxes and interest on their loans, they’re satisfied. So what are these guys waiting for? Well, they told HR&A in interviews that the Hennepin County buildings and Medical Center and lack of neighborhood amenities have held them back. Oh, and there are too many parking lots, separating Downtown East from the rest of the city.
The report offers several complicated solutions to this problem, but I will boil them down into two categories for you: pleasure and pain.
With pleasure, the city offers developers incentives to build — tax rebates, tax incentives, outright grants and so on, a la Block E. Sometimes such programs work; sometimes they produce white elephants. Or on the “build-it-and-they-will-come” theory, the city creates amenities, like transit and parks that people want to be near. Of course, that takes years and years to show an effect, and the results are also iffy, although Rome wasn’t … you know.
Then there’s pain. The city could hike parking lot owners’ taxes, although the report’s authors suspect that they would merely pass the extra cost of doing business along to their customers. HR&A put some faith in a city effort to enforce its parking lot landscaping ordinances more strictly than it has in the past. For example, lots are supposed to be screened with a specified number of trees. Trees take up space, actually spaces — parking spaces, reducing revenue. If revenues are reduced, parking lots will cease to be quite as lucrative, and selling might start to look like a better deal.
Smart candidates don’t generally speak about inflicting pain on their potential constituents; but if they mean to get stuff done, it should be at the back of their minds.