Developer’s dilemma: How much space to devote to parking?

Real Estate | 11 Nov |

It’s a vital component of any development, large or small, and one that is surprisingly complex: Parking.

In a car-centric, spread-out city like Phoenix, new developments must have enough parking to accommodate all of the drivers who live, work or visit. Despite being the fifth-largest city in the United States and the fastest-growing metropolitan area, Phoenix is behind other major cities in the country when it comes to public transportation and other alternative means of getting to and from work each day.

As the development activity in Phoenix has exploded in the past 10 years, so has the number of large parking structures. These structures may seem simple from the outside, but there are many hours spent by development teams to determine just the right size, location, look and function of these parking structures.

“Parking is a big issue for all development and redevelopment, like our project at Park Central Mall,” said Stan Shafer, president and CEO of Holualoa Companies, which is currently in the midst of a redevelopment project at Park Central Mall that will feature the tallest parking structure in Arizona. “The reality is that parking is becoming more important than it ever was because tenant demands for parking have increased over the last 10-15 years.”

The Urban Land Institute has long been championing the idea of less parking, especially in the urban core areas of cities around the country. In 2013, the ULI Rose Center released a presentation on parking reform, encouraging urban planners to focus on transit-oriented development (TOD), which is compact, walkable, high-density development close to public transportation. This kind of development maximizes the use of available space with residential, business and leisure projects, leaving precious little room for parking structures.

Phoenix is slowly creating pockets of TOD areas, with Downtown Phoenix, Midtown and Downtown Tempe the submarkets with the most compact cores. But in other areas of the Valley, developers must address parking concerns when planning their projects.

“Parking structures are sort of a necessary evil,” said Chuck Carefoot, senior vice president of construction for Ryan Companies US, Inc. “They take up a significant area, take up significant land, take up all sorts of access, they’re expensive and the revenue typically received from them is insufficient to justify the cost. Parking is often the differentiator to making the project viable or not.”

At Park Central Mall, Holualoa is building such a large structure (10 levels of parking) due to the tenant demands of the redevelopment project. That parking structure will serve the new Creighton University Health Sciences Campus as well as a multifamily project that will be going up on the southwest corner of Central Ave. and Catalina Dr. Also, the structure had to account for all of the parking spaces lost to the three structures that are replacing a large surface parking lot.

“It’s simple math, you have to be able to size the parking garage sufficiently to provide parking for the two new uses and replace the parking for the existing use,” Shafer said. “You have to accommodate the parking of the new development, which in this case is Creighton and the new apartments, but you also have to accommodate the fact that you are taking away parking to build those.”

Shafer also said that making such a large structure will open the door to future development on the Park Central Mall site.

“The type of tenants we’re hoping to attract at Park Central, could be pretty big parking users,” Shafer said. “I think we can get by with a little bit less new parking in the future because of this structure and the fact that we have that light rail connection. That is part of our thinking already.”

Both Holualoa Companies, Ryan Companies and developers all over the country are wrestling with parking ratios and how many spaces will be enough; but also how they can maximize the income from the property. Shafer said that not long ago tenants were wanting three or four parking spots per 1,000 square feet of office space, those ratios are now at five or even up to nine spaces per 1,000 square feet.

“I don’t think it’s ever going to happen, particularly here in Phoenix, that we’re not going to need parking garages,” Shafer said. “I just don’t think our city is configured that way. What could happen in the future is that the demand for parking would reduce, which means we could do new developments without adding new parking structures, we would just be able to use the existing parking that we have there.”

Carefoot sees a few submarkets are prime areas for reduced parking demands. He cites Downtown Phoenix, the Central Ave. corridor and the Novus Innovation Corridor in Tempe as areas that could see employers come in that embrace alternative transportation options and require less parking.

“There are users that embrace the idea and want to be in a building that has limited parking and their particular employee is very happy to embrace not driving to work,” said Carefoot. “Those kinds of areas also have the advantage that there is a lot of activity. Activity in Downtown Phoenix and Downtown Tempe means that those garages are not single-purpose garages and that there are ways to fill them up on non-work days and the evenings and weekends.”

The costs of parking structures are rising and grow exponentially if a developer decides to dig an underground structure. However, modern garages go up very quickly and are designed to add to the overall aesthetic of a building.

Most new parking structures are built using precast technology. The walls, floors and support posts are built off-site and trucked to the building site, where they are lifted into place and secured together. An average structure takes about 30 workdays to erect, but then a couple more months of work goes into finishing the structure.

Justin Nelson is the project manager for hardison/downey construction on its Battery Lofts project in the warehouse district. The parking structure for that project is a precast structure, meaning it will go up quickly once the subcontractor fits them in their calendar.

“There’s only a couple of contractors in the Valley that do precast, so they are very busy,” Nelson said. “It’s critical for us to make sure that we have the site ready for them in a certain window, within a couple days, because if we miss that window, we’re talking about months and months of delays.

“But you can’t beat the timing of precast. That’s where you can see big-time savings.”

Kitchell is the general contractor of the 10 level Catalina garage at Park Central Mall. That project is also a precast structure. It took less than a week of work to go from no vertical elements on the job site to a structure four levels high on one end of the project.

“A stand-alone, 10-level structure, we believe, will be the biggest in Arizona when we’re done,” said Russ Myers, project manager for Kitchell on the Catalina garage. “It will take 18 weeks of erection time, and then we’ll do the toppings and other finishes. That’s the beauty of precast.”

Myers said that the Catalina garage will have electric vehicle charging stations built into the structure. He also noted that the structure is unique in that there will be multiple entities that will use it, making security an important element to be worked out by the entities involved.

“There are multiple players, so you can understand how busy that site will be,” Myers said. “Within eight inches of the structure, there’s an apartment complex being built, so they get a certain number of spaces and Creighton gets a certain amount of spaces.”

Many modern parking structures have also become attractive elements on a project. Just look at buildings like The LINK PHX, Marina Heights and Watermark. Those new structures are finished with architectural accents that enhance the overall project. On office campuses like the American Express campus in North Phoenix, The Grand in Tempe or Allred Park Place in Chandler, the parking structures are simpler structures that are functional, but not hiding the fact that they are parking structures. The newest phase at the American Express campus, which is being built by Layton Construction, features one of the first garages in Phoenix with a sensor system that signals drivers with a light above the space. If the light is red, the space is full. If it’s green, the space is free.

While the newest parking technology is slowly trickling into Phoenix, the trend of designing parking structures to blend in or even accentuate a project has been growing in Phoenix for more than 20 years. One project, the former Phelps Dodge Tower, now called 1 North Central Avenue, is the first project with a parking structure that blends into the environment that Ryan Companies built in Phoenix.

“That particular building is right on the corner of Central and Washington it has two rotundas; one on Washington and 1st Street,” Carefoot said. “Those two rotundas and the entire five-story parking structure are completely enclosed, with windows and the rotundas to look like a building, but it’s not. It’s a completely enclosed parking structure for five stories.”

“Marina Heights (also developed by Ryan Companies) and so many garages that have been built in the recent past, are owning that they are garages, but are trying to create some visual amenities that create interest,” Carefoot added. “It’s much more cost-effective and also a little more pleasant, but that’s obviously in the eye of the beholder.”

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