Private companies might build, operate Columbia parking garages

Columbia officials are exploring a new way to pay for more downtown parking garages that would include a major role for private garage companies and would use new construction on existing garages as a way to help finance them.

Sometime this summer, Mayor Steve Benjamin and City Hall staff will lay out the plan in detail after asking companies that have experience in public/private garages to submit their proposals, he said.

“We need thousands of spaces now,” Benjamin said, referring to two garages the city is contracted to build in the Bull Street neighborhood as well as the need for another garage in the Vista area. “But will we need them in 10 years, 20 years?”

So rather than city government taking all the risk, officials are studying the best way to plan for parking needs and how to pay for them and manage them.

A revitalization of downtown has brought retailers, offices and residents to the city center and increased the need for parking to almost a 24-hour demand instead of just during business hours.

The first likely candidates under a new parking plan would be the first of the two 800-space garages in the Bull Street neighborhood and the two garages at the Kline City Center on the west side of the Vista, city officials said. The Kline property at Huger and Gervais streets calls for between 700 and 850 spaces in its garages.

The private sector often can build more cheaply than government, Benjamin said. But government can borrow money more cheaply. The plan is to merge those abilities to build and manage new and even current city garages.

“I don’t know if it will be a 50-50 partnership or a 70-30 partnership, or if we’re looking at some kind of joint financing, or if we’re looking at one party financing and the other leasing spaces,” he said.

A proposal that City Council could discuss was to be ready this month. But Benjamin and Jeff Palen, the city’s chief financial officer, said companies will have a chance to submit their written proposals in July or August. Recommendations on if and how to change parking operations will be ready for a vote in the fall, they said.

Benjamin said he’s talked with four or five companies himself while city parking director John Spade said at least a half dozen firms have expressed interest.

Benjamin declined to name any garage companies. Whichever option emerges as best for Columbia, the mayor said, “We’ve seen some pretty compelling numbers.”

A parking study that was updated last year noted that downtown has lost 1,700 parking spaces around the Colonial Life Arena and the Darla Moore business school. The Moore school was built over surface parking lots and it added demand for parking in the university’s Innovista as well as adjoining portions of the Vista. The construction also reduced on-street parking, Spade said.

The study cites the need for more parking in the Main Street corridor and the option of tax-exempt financing. Two buildings along Main have constructed their own parking garages in recent years.

Parking in and around Main Street is at a tipping point, said Matt Kennell, director of City Center Partnership, which advocates for the 36-block business district that straddles Main.

“At this moment in time, supply and demand are about equal,” Kennell said Monday. “But we’re teetering on the balance of needing more parking.”

If, for example, commercial occupancy creeps closer to 100 percent or more people move to the city center, more parking will be needed, he said.

Palen, who’s been involved in the talks about changing the parking system, said the city has to proceed carefully.

“Every vendor will tell you they have the answer,” Palen said. “It’s very complicated and there is no easy solution out there.”

Among the questions for the city are:

▪  Who keeps the revenue?

▪  Who’s finances will back stop the costs?

▪  Who will own the garages once they are paid for?

▪  Who set parking rates?

Cities that have chosen to completely privatize their parking services have not fared well, Palen said. “We’re not looking to do that,” he said. “That hasn’t been a big success.”

Benjamin said another financing option is to create small tax districts that would capture the revenue from residential or commercial development being discussed for construction on top of some city parking garages.

“If you have $20 million on top of a garage, and you’re looking at the potential of using a tax increment financing district, it adds an additional stream of revenue that adds to the garage’s cash flow,” he said.

This story was originally published June 27, 2016 at 6:39 PM with the headline "Private companies might build, operate Columbia parking garages."