Jacksonville Gets Soaked By Bad Parking Garage Deals

The 1,375-space parking structure across the street from Jacksonville's county courthouse. Photo: Google Maps
The 1,375-space parking structure across the street from Jacksonville's county courthouse. Photo: Google Maps

Jacksonville taxpayers have forked over $47 million to keep three downtown parking garages afloat, a subsidy that amounts to about $16,637 per space — and rising.

The fallout is expected to get worse, according to the Florida Times-Union, because the city is on the hook for financial shortfalls at the garages until 2030. The situation should be a cautionary tale for cities thinking of subsidizing downtown parking structures.

The garages were part of the “Better Jacksonville Plan” approved by voters in 2000, which funded the construction of a county courthouse and the Jacksonville Veterans Memorial Arena with a half-cent sales tax increase.

In 2004, the city inked a deal with a garage operator. The public commitment for one 1,375-space structure by the courthouse plus 1,000-space and 480-space garages by the arena was supposed to be limited to $19 million, with the garages turning a profit by 2019. But that’s not how things worked out.

The garages are only producing half the revenue projected in 2004, reports the Times-Union’s David Bauerlein, and the city must make up the difference. Jacksonville has to pay off debt incurred by garage construction and cover a contractually guaranteed 6.75 percent rate of return for the private operator. Each year, taxpayers fork over about $3.8 million to pay off the garages, and there’s no stipulation allowing the city to renegotiate terms before 2030.

It’s too late to salvage this deal, but maybe Jacksonville will avoid making the same mistake in the future. Subsidized parking is a bad bet, even in car-centric Jacksonville, which is now short $47 million it could have spent to improve walking, biking, and transit instead.

19 thoughts on Jacksonville Gets Soaked By Bad Parking Garage Deals

  1. Cities always seem to have money for astronomically expensive sports stadiums, convention centers and parking garages while claiming there’s just not enough money for basic pedestrian and cycling infrastructure.

  2. Its so funny that instead of looking at what world class cities are doing, the B string cities keep making the same mistakes over and over

  3. I take a different stance on it. The issue isn’t the parking garage but who’s paying for it. The parking garages are necessary because of broader regional transportation policy decisions. My city (Milwaukee) has a vastly overbuilt urban highway system cutting through our downtown, so a commuter can reach city hall from pretty much any location within the 20 mile radius in 30 minutes or less. There is nothing my city can do about the deluge of commuters into downtown. In the 60s & 70s, the city did nothing and nearly every wooden/easy-to-tear-down structure within the 1 mile-plus radius of city hall was torn down for commuter parking. Entire neighborhoods were lost.

    The garages should have been part of the initial highway bills & maintained by the State DOTs. They are for the betterment of the whole region & necessary with the design of the transportation system.

  4. The city could promote the construction of housing in town to reduce the number of commuters.

  5. Kind of. It’s swimming upstream. The state has poured billions of dollars into the urban highway network to get suburbanites into downtown on 65 mph cruise control. It’s inflated the value of land as parking to extremely high levels – up to $5 to 10 million/acre for the most prime lots (in Milwaukee!). To redevelop as housing, we’re talking 12+ story/40+ million dollar developments just to recover the cost of the land.

    Right now, we can’t build that – even in Milwaukee – for less than $300/sq ft. For perspective, the highest value neighborhood in the city/metro is about $250/sq. ft. So to make housing work where there’s currently surface lots, under the rosiest conditions where we assume it will match the highest valuations in the entire metro, these developments need to be subsidized 17% by the city ($50 bucks per square foot..). There’s swaths of the city that are valued under $50/sq. ft. in total, so as you can expect, these ideas float like lead balloons. The core problem is that parking lots are really valuable. The way the market reacts is that development is pushed to the ring just outside the commuter parking walkshed, where the land values aren’t inflated.

  6. To me it sounds like you want a bad investment to spawn more bad investments. (Probably stems from your opinion that “there is nothing my city can do about the deluge of commuters [in cars]” there.)

  7. Seems like it’s a pretty simple story – of just how expensive Jacksonville’s parking decisions have been.

  8. I don’t think it would have worked that way. If every exit had to be accompanied by structured parking as part of the project, we would have build less & differently. We might not have built urban highways as we know it at all.

    We basically built the car equivalent of rail roads without rail yards. Instead of storing cars in an orderly place, we turned our cities into giant parking lots, and foisted a giant liability on the local governments.

  9. I don’t follow. If as you say, the city has swaths of land that are valued under $50/sq. ft, then those areas aren’t zoned for housing? Is there a local wrinkle (access? amenities?) that keeps people from wanting to live there? Otherwise why doesn’t housing work there?

  10. That doesnt make sense. If the land is valuable all you have to do is throw on three stories of parking and put 6 stories of housing above it and it sounds like a tidy profit on both fronts. High value of land has never stopped good development, only city policies and the built environment.

  11. It’s the rust belt. The urban middle class was swept under by the collapse of American industry. I’m always recruiting people. I find Milwaukee a very charming even in its tattered state. Beautiful tree lined streets, walkable neighborhoods, a massive sprawling downtown, great cultural programming, Olmsted designed parks, progressive local government, efficient transit, all situated on beautiful bluffs above Lake Michigan. And, most importantly, the jobs are back.

  12. A development like that can’t be built for less than $300 sq ft. The most expensive neighborhoods in the city sell in the range of 250. So it doesn’t pencil a profit.

    If the building is built cheaper – like one of those 5 story “ikea” buildings – it won’t get commercial financing because the land to building value ratio won’t pencil. The land would be worth too much compared to the finished building. The economics of the high land value, says it has to be a substantial building – mid-rise or taller. But it’s really expensive to build mid-rise or taller buildings today; well above what the local buyers spend in this market.

    If it was san fransisco and housing was worth over 1000 sq ft, we could build 50 story towers and everyone makes money. That’s just not rust belt math.

  13. Also, by “nothing,” I mean nothing effective. The County government controls the transit network & the State government controls the highways as well as most of the key surface roads connecting to the highways. The State limits the tax options that local governments can employ, so the city can’t simply impose a special tax on parking, etc. Essentially, the City is a just a pawn in these regional transportation discussions. It’s upzoned everything in & around downtown & there’s been steady development in the 20-30 minute walk zone where property values aren’t inflated due to commuter parking. There’s a huge (and growing) walk-to-work modal share, but rather than displace downtown parking, it just attracting more downtown jobs. What that tells us is exactly what every employer has been telling us for decades, downtown employment is constricted by affordable parking scarcity (despite the moonscape of parking lots). So basically, as we add active & mass transit share, rather than displace parking – we just see higher commercial occupancy rates. It’s a hamster wheel.

    On my point, the engineers that designed these highway systems could estimate fairly closely how many people would be commuting into downtown. They knew there was nowhere to put all those cars & built it anyway. They knew we would have to tear down our communities for parking lots. It wouldn’t have been hard to go: “we’re expecting 60K cars daily, 45K at peak (numbers the DOTs had). We can park 11K on street, another 11K in alleys behind the buildings (numbers the city had). Okay, where do we put 23K structured parking spots so we don’t destroy all of our cities?” They didn’t do the analysis. They should have. And it should have been part of these projects from the start.

  14. Oh sorry, that’s not exactly my question. You’re saying the value of housing is $250/sf and the cost to build is $300/sf, so housing construction doesn’t pencil – ie, a 1000 sf condo would cost $250,000 to buy – but that surface parking is extremely valuable. Let me ask this: what’s the income on those surface parking lots to support its value?

  15. Yes and don’t forget the fact that in Wisconsin the ability to set up regional transit agencies to handle regional transit problems is against the state law.

    The state level (currently) along with the federal government (currently) is all about building more lanes, more bridges, more highways, increasing the speed limits, and taking petty jabs at anything that resembles multi-modal transportation.

    What that ends up looking like is exactly what you’ve outlined…we can pump hundreds of thousands of vehicles into your city…but now that’s your problem and we don’t want to hear about transit whether regional or local.

    It’s wonderful when state and federal leaders enjoy rubbing salt into the wounds of the local agencies. /s

  16. I’m not sure what the income is; that information is private. Parking lots are bought & sold occasionally, which is all public information. So we can see what they are getting valued at. Surface parking lots in our East Town or 3rd Ward neighborhood, close to the interstate, have sold in the $5-10 million/acre range in the last couple years. Just for point of reference, that valuation is HIGHER than many comparable parcels with buildings on them – so clearly parking lots are big business. (Note: it’s still the same underlying pricing/economics at play that drove developers to plow much of the downtown in the 60s & 70s until the practice was regulated away).

    I’ve tried to guess at it, based on the number of spots & there pricing scheme, and ended up around a 1M/year/acre. That’s just an envelope calculation, though.

  17. Yep, it’s pretty frustrating. However, I frequently have to step back because I am just dumbfounded by how dynamic the city is and what the local leadership – government, corporate, citizens – have been able to do in the face the most astonishing ineptitude. Add some really challenging national & global changes in key sectors of its economy… I’m shocked the city is even standing. Then I walk around, it’s just vibrant. Creativity and authenticity pouring out on to the streets, in the shadows of hulking industrial ruins.

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