Subsidization and its discontents.

My latest just recently went to post at Urban Indy. The subject, a parking garage in an Indianapolis neighborhood, might seem dry or parochial to those outside of that metro region, but it speaks powerfully about the potential pitfalls of poorly prepared public-private partnerships.  Here’s the garage:

subsidization of Broad Ripple Parking Garage

Photo courtesy of Indianapolis Business Journal.

It sits at a prime corner in Broad Ripple, one of the city’s older, most established mixed-use, nightlife-oriented neighborhoods–a neighborhood that never declined, though close to those that did.  Plans for the garage started to take hold nearly a decade ago, and the facility opened to the public in spring of 2013.

The general perception in 2010 among select city leadership was that Broad Ripple was seriously losing ground, as other previously dormant neighborhoods closer to downtown Indy underwent considerable revitalization. The parking situation in this fiercely auto-dependent city meant that a historic streetcar suburb like Broad Ripple, primarily designed for pedestrians, became glutted with cars on weekends, spilling onto the sides of streets in residential neighborhoods just south of Broad Ripple Avenue. Since many of these weekend visitors were rowdy if not altogether inebriated, it fostered an uncomfortable relation between long-term Broad Ripple residents, who no doubt appreciated the area’s walkability but didn’t appreciate trash or puke in their front yards on Sunday mornings. The proposed parking garage on a long underutilized lot intended to deflect some of this demand for parking spaces by shifting it away from the local roads.

At first blush, it’s not a bad looking building.  The designers clearly put retail on the first floor, and they clad the upper levels with decorative features so it looks less like a garage.  But problems have been persistent: interior pooling of water after rainstorms, struggles to lease all the commercial space, less than 20% usage on weekend nights.  And, as I learned myself, those are only the flaws that have received press coverage.  Most tellingly, the city paid over one-third of the garage’s costs.  Paid–not loaned.  With that much taxpayer money invested, we’d all hope the outcome to a subsidization might be a little more salubrious.

I’d love to get thoughts on this article, and what it says about broader efforts to fill a sort of “demand gap” when the private sector’s market analysis can’t make the financials work.  Such an ill-conceived subsidization could serve as lesson for us all–not just the urban advocates.

 

31 thoughts on “Subsidization and its discontents.

  1. Rose

    The problem isn’t really that there isn’t demand…it’s that people go out of their way to park for free in Broad Ripple so all of the paid parking is underutilized. If everything were priced, the pricing on the garage is fair (likely cheaper than the meter and certainly easier), it’s just that people try really hard not to pay for parking in the village – even at the risk of tickets. I park in the garage frequently and at peak times it is relatively full – well above 20%. High cost of free parking issue.

    Reply
    1. AmericanDirt Post author

      Good points, Rose. During my visit, it was certainly more than 20% full. But was it full enough to be a revenue-generating entity? My guess is it was half full on a Saturday night, which probably isn’t good enough. Most pro formas depend on a certain base occupancy rate (at least 70%), and since the garage has underperformed on the retail occupancy as well, it most likely hasn’t generated enough revenue to pay off construction costs…except for that dang subsidy that made it feasible to begin with. So while there’s demand, there isn’t ENOUGH demand, which is what the City essentially subsidized. I wonder if things will change if 1) the Broad Ripple neighborhood ever gets residential parking permits and 2) the garage can ever charge even a smidgen more than the on-street meters (right now it can’t).

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      1. Rose

        The subsidy issue comes into play because the garage can’t make it with the behavior choices people are making…but people complain there isn’t enough parking in BR and protest development unless there’s more parking…so…it got built. I will favor subsidized garage parking over surface lots until we cross a threshold where people don’t have a preference to park (often creating traffic problems) elsewhere like on street. We need to drive density/intensity of use in the villages to support transit and QoL. The demand will catch up. But like requiring the sidewalk even though it doesn’t connect to anything yet….it will take time.

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        1. Rose

          The internal design is awful, but I park in an awful one (old) downtown so I’m used to it…and at least it’s safer for women and other vulnerable populations. I haven’t been to the one at Illinois and New York, though I’ve heard complaints. I only park in my garage (for the most part) and walk or bike share everywhere else.

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      2. AmericanDirt Post author

        Thanks again for these thoughtful comments. I guess we could speculate to no end what could have happened without the subsidy, if a private developer had pushed to build something with a strong IRR on that site, how it could have maneuvered through approvals/variances and inevitably NIMBYism if the intensity/density had increased enough to allow for housing or offices stacked atop the parking garage, which absolutely would have strengthened the viability of the first-floor retail, and the neighborhood as a whole. Perhaps some of these speculations are getting fully realized through the issues The Coil development faced a few blocks away (where most opposition came through the proposed competing grocery store, if I recall correctly). Even though I’d agree that the garage is an absolute improvement over surface parking and a blighted gas station, the said thing is that the subsidy embeds a disincentive to make the project really great—i.e., fully competitive in the market. Interior circulation is badly designed, which is an embarrassing oversight that I strongly doubt would have happened if more of Keystone’s equity were on the line. Oh well–thankfully the garage is still an improvement of the City of Indianapolis’s most embarrassing recent subsidy: the abomination that is the One America Parking Garage, at Illinois and New York Streets. The only garage I’ve seen in recent years with even worse urban design is one out of Bethlehem PA (http://www.mcall.com/news/local/bethlehem/mc-south-bethlehem-garage-groundbreaking-20161118-story.html) which, not surprisingly, is also heavily subsidized by the City.

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        1. Chris B

          I’d speculate that no higher IRR was possible for that corner without huge subsidy. The former Rosslyn Bakery and long-vacant gas station were certainly available for a long time.

          The access was always problematic because of the traffic congestion both directions at College/Westfield….which was due to the peculiar mix of limited number and orientation (N-S vs. E-W) of White River bridges on the north side between Kessler and 82nd. Further, site configuration is funky because there were functioning alleyways for trash and local resident/business parking.

          The issue I see is that it’s at the edge of the district rather than in the heart; the location is very near existing single-family residences. Something like The Coil wasn’t going to happen on that dead gas station site.

          And this: People generally won’t do what I do, which is park there from the get-go instead of hunting for maybe-available parking, then walking wherever. It’s only 5 minutes’ walk from there to anywhere in BR.

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          1. AmericanDirt Post author

            Thanks for the comments Chris. Clearly the quasi-brownfield condition induced by the vacant gas station seriously held up this property for years. And while I don’t know that a facsimile of the Coil was ever reasonable, it would have been nice to see a better use of such a prime site. If not a full extrusion to accommodate mixed-use, the structure could at least have added two floors of residential/office on the area closest to Westfield, offering nice views of the canal, while stepping down on the more sensitive south side. This would buffet the proposal against community opposition, which may not be great anyway, since the parcel directly abuts commercial uses (a drive-thru Chase Bank on College and a converted home vet clinic on Broadway). But, inevitably, at least someone would vociferously complain.

            At the very least, I’m grateful that it had the first-floor retail, but almost all evidence supports the notion that the prevailing cultural and physical arrangement in BR didn’t yet stimulate enough demand for a garage. And, if the garage ever does get heavy use, it will frustrate drivers entering from the Westfield side–a situation that a better design could easily have avoided.

  2. Bruce

    Lots of good observations and good food for thought by American Dirt and Rose. I would enjoy giving a Saturday bike tour in the Carmel core and hear your observations and thoughts. ~ Carmel Central District Councilor.

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    1. AmericanDirt Post author

      Thanks so much, Bruce, and I would love to take you up on that offer. Unfortunately I live in Washington DC these days. Perhaps the next time I’m in town? Feel free to send me an e-mail.

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    1. AmericanDirt Post author

      Yes indeed, and the City helped pay for it. And now there’s a second garage about a block away, attached to a large new apartment building with a Fresh Thyme grocery store on the first floor.

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        1. AmericanDirt Post author

          Yes, though that clearly isn’t enough to justify a 300-space garage… I guess the bigger question would be: are people starting to go to Broad Ripple who otherwise wouldn’t be, now that there’s guaranteed, easy, sheltered parking? Do any of the local merchants validate parking at the garage?

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        2. Rose

          I haven’t found anyone that validates parking in the garage. People going to BR who normally don’t is important. Another important piece is getting people who are going there (by car – many people ride or walk) to park in appropriate locations which can improve access to businesses, property values, and minimize traffic incidents.

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        3. Rose

          I understand and appreciate your concern about the public investment, really I do. I just also know that people are using parking as a reason to protest intensity/density and in too many communities I have seen the solution be demolition for surface parking….which doesn’t fully address the problem and creates other problems that starts a spiral of disinvestment. The first floor retail is now 100% occupied on the BR canal garage and with more opportunities in the area the parking will meet “fullness” desires in the next several years.

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          1. AmericanDirt Post author

            I really like the underlying inferences of collective human psychology that you’re applying here, and I agree with you that it might have thwarted something worse (especially considering one of the city’s most vocal NIMBYs really did push for a surface lot at that site). It’s just hard for me not to wonder if the new Coil development would have met this demand (while further siphoning some off from the garage we’re talking about) and at least it includes better uses. If the powers-that-be in indy applied the same thoughtfulness to their dealmaking that we are to this conversation, we might have enjoyed a better development. I just fear the subsidy helped everyone get a bit complacent. Well, time will see if the improved occupancy is helping the garage’s owner break even: if the garage doesn’t look shabby in 5 years (i.e., he keeps the maintenance up) then it was probably still an adequate use of taxpayer money. And it will ALWAYS seem like a smarter development than the One America garage…subsidized urban design garbage in the heart of downtown.

          2. AmericanDirt Post author

            Granted, The Coil project also involved gas station clean-up, which inevitably meant it would require public dollars. At least it was a bond issuance and not an outright subsidy.

          3. Rose

            David does a lot of cleanups that use insurance recovery, but the specifics of that site I don’t know.

        4. Angela E.

          Parking is honestly one of the reasons I stopped going to BR. I now only go when I can’t avoid it. My hairstylist for my wedding came to us but I did my trial at her spot in BR and I’ll come see a friend who is a comedian when he’s in town performing (though even that doesn’t always happen). But short of parking down the street where noodles and company went in and hoping they didn’t tow my car and then having to walk that distance alone, at night, on very dangerous streets (the driving was insane with narrow streets, too many cars, and illegally parked vehicles). I’ve literally avoided going to BR certain nights because of the combination of the annoyance factor and feeling unsafe. And once that thought of avoidance is there, it carries over. I don’t come back in the daytime any more, either. I moved further away and it’s not worth the drive to deal with that. It SHOULD CE covering that people like me don’t know those concerns have been addressed. And if am improvements like this is only for the people already there and not to draw back people who otherwise wouldn’t know… That still begs the question, “is it a good expense?”

          I’m not arguing for or against. Just my honest first reaction of, “where? Since when?”

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          1. Rose

            Come back. The garage is nice/safe and generally only $2 – cash or credit. No tow worries

  3. Rebecca B.

    Have you been watching Fargo this season? Maybe it’s a front for a multi-national crime syndicate. … Joking ? aside, nicely done. I go to BR about once a month and I’ve yet to use/need to use the garage, but I have friends who appreciate the convenience. I wondered if it was living up to the hype. Another shady deal under Ballard was the electric cars contract. But those seem to be getting some traction years later.

    Reply
    1. AmericanDirt Post author

      Yeah, I don’t know much about Blue indy. It seems like an attempt for the previous administration to establish a “green innovation” legacy, and it would be great if it actually helped reduce individual car ownership. But in this era of Uber and Lyft, it clearly needed yet another city subsidy to get off the ground, because it otherwise would not have really aligned with demand. I’m dubious that it’ll be around in 5 years, and the most aggressive taxpayer watchdogs will use it to illustrate the folly of government subsidized initiatives for another quarter century. Sorry…only saw one episode of the first season of Fargo! But I do enjoy being reminded of the original 1996 movie, through assorted YouTube clips.

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    2. Rebecca B.

      The current season is about a parking lot magnate… 😉 Blue Indy seemed to be a fairly secretive deal. People who use it tend to already own cars and just need to travel a short distance, or use it as a way to drive/park at the airport (but there are extra fees). I liked zip car in Boston and bigger cities where people don’t really need cars. But almost everyone has a car in indy. If not, they probably can’t afford one/take the bus/probably can’t afford the blue indy fees. But… They might have deals for low income drivers as I’ve noticed some of the spots are at apartments in low-income areas.

      Reply
  4. Steve Ryan

    Well done! I never would have imagined a parking garage in Broad Ripple. Always thought of it as a bunch of quirky restaurants and shops

    Reply
    1. AmericanDirt Post author

      With a big garage on the eastern end, where Broad Ripple Avenue, Westfield and College Avenue meet. The shops on the first floor help minimize reduce its garage-y look.

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  5. Justin Davis

    I still park in the Three Wisemen parking lot for the reasons you listed (free and closer to things)

    Reply
    1. AmericanDirt Post author

      And you never get towed? Supposedly if you don’t patronize one of those shops in the strip mall, you could.

      Reply

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