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Epic Job Creation Fail: Paying Developers to Build Free Parking

11:13 AM EST on November 30, 2011

Oh boy. It's always sad when communities try to revitalize their downtowns and they resort to subsidizing the kinds of things that hollowed out the area in the first place -- namely parking.

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We're talking to you, Mankato, Minnesota.

After leveling a bunch of historic buildings and turning downtown into the region's finest collection of asphalt landing strips, civic leaders seemed to recognize the error of their ways with their latest revitalization plans. But did they?

Nathaniel M. Hood at Twin City Streets for People says Mankato had the right ideas: promoting walkable neighborhoods and creating better bike and pedestrian connections in the historic downtown. But somehow Mankato also ended up subsidizing free parking to the tune of $3.2 million dollars -- or about $42,000 in public money per space added -- in increasingly precious local and state funds.

Hood writes that this is a classic case of how local communities must be shrewd in the use development subsidies:

The revitalization of downtown is paramount and the HECO building [pictured above] is a key element. The building’s $2.5 million renovation will attract professional firms to Class A commercial space in the heart of downtown. This is a good thing, but it is coming at an unusually high cost to taxpayers.

The bulk part of the subsidy is the City built parking garage attached to the newly renovated building. Here’s the financial rundown of the parking garage:

- $3.2 million for the construction of 154 Total Spaces- $3.2 million 154 Total Spaces- $20,779 per parking space

Furthermore, the cost of $20,779 (or $159 sq ft) per parking space doesn’t tell the whole story. One needs to consider that 77 surface parking spaces already existed on the site prior to the construction – and the ramp is simply creating a “net gain” of 77 spaces. When the “net gain” is considered – the numbers look even worse:

- $3.2 million construction for a net gain of 77 spaces- $3.2 million / 77 added spaces = $41,558 per space

Is $41,558 per additional parking spot created a worthwhile public expenditure? I’m curious to know if anyone stopped to ask the question: Why is the public spending over $4 million to attract $2.5 million in private investment?

Where I live in Cleveland, Ohio, the city is planning to add structured parking behind the publicly owned West Side Market. So, assuming the costs are similar in Ohio, you have one of the poorest cities in the country subsidizing car parking at $22,000 a space. (Actually, perhaps the $44,000 figure is a better measure since, like in Minnesota, the parking garage will be built over a surface lot.)

I got to thinking, for every parking spot the city of Cleveland builds it could completely finance one child's four-year college education. The city could completely change one resident's life for every parking space they build so suburbanites don't have to circle the block a few times. It's insane.

Those are the kind of priorities we have in Cleveland, and apparently in other cities. And they haven't been serving us well.

Elsewhere on the Network today: Grist points out that while Walmart is making a big show of efforts reduce its impact on the environment, it still hasn't answered for its biggest environmental sin: sprawl. Bike San Diego explains how California's famous Prop 13 tax referendum has screwed up transportation across the state. And Muscle Powered has the details on Nevada's efforts to develop a statewide bike plan.

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