ULI Idaho Blog

Downtown apartment developments often supplanting parking lots

Posted with permission from Kim Burgess, Editor Idaho Business Review – 12/17/2018
Written by Teya Vitu and originally published by Idaho Business Review 12/10/2018. View original here.

This is the third in a four-part series on downtown parking lots.

Diamond Parking bought this parking lot at 401 Bannock Street and two other small lots at a state auction in 2017 for $1.59 million. Photo by Teya Vitu.

In December 2017, Diamond Parking put in a winning bid of $1.59 million at an auction of state-owned commercial properties for three surface parking lots in downtown Boise’s east side with a combined 54 spaces on lots adding up to just .41 acres.

“These are postage-size lots that sold for a fortune at auction,” said John Brunelle, executive director of the Capital City Development Corp, the city redevelopment agency. “Time will tell if they go vertical. For now, I’m glad to see them back on the tax rolls.”

Diamond Parking operates 15 parking lots with 1,600 spaces on leased property in Boise, but these are the first lots in Boise that Diamond Parking owns, Dan Geiger, vice president of Diamond Parking’s Spokane region, said at the time of the 2017 auction.

He said Diamond Parking will continue operating the lots for parking but development would be considered.

“We’re happy to have a developer build something,” Geiger said in 2017.

David Hale, the downtown developer who coined the phrase Linen District, said some parking lot owners see more value in parking lots than development.

Surface parking due west of the Capitol. Photo by Teya Vitu.

“It sold for twice the amount for what a developer would have paid,” Hale said about the three Diamond Parking lots. “It’s more valued for them to add surface parking.”

Across the country, downtown parking lot owners often see more value in collecting parking fees than developing the lots, but Paddy Tillett, principal at Portland, Oregon-based ZGF Architects, believes lot owners can be won over.

“The big thing is most parking lot owners are not developers,” said Tillett, an architect, planner and urban designer with over 40 years of experience. “They are thinking of returns. For some people, it’s a steep learning curve. It looks like it’s too big a bite to take. The reaction is ‘Look, I’m happy with my income every year.’”

Tillett said urban economics demonstrates surface lot owners could make higher income developing their lots. He said city leaders need to become fluent in displaying the benefits of development to surface lot owners. The key is to find owners to voluntarily step up.

This U.S. Bank surface parking lot disappeared in 2014 as construction started on the Clearwater Building at Grove Plaza. Photo by Teya Vitu.

“One could demonstrate the potential increase in income,” Tillett said. “Walk them through the process. They stand to make a great deal. This is about presenting an opportunity. Make it clear that it is not a coercive program.”

The Capital City Development Corp. has studied every surface parking lot within its 144-acre Westside urban renewal district that roughly runs from Ninth to 16th streets and Grove to State/Washington.

“Every surface lot on the West Side has its own story behind it,” CCDC CEO John Brunelle said. “Some will remain surface lots for a long time. (We have to) educate them that they can do even better financially if they go vertical.”

With CCDC Central District urban renewal district having ended its 30-year run Sept. 30, Brunelle is especially intrigued with the potentials in the Westside District.

“We have identified several surface parking lots where we will be partners on development in the next five years, probably four or five blocks worth,” Brunelle said.

People want to live downtown again

The Watercooler Apartments feature box-framed casement windows that offer views down the street. Photo by Teya Vitu.

In 1867, everybody lived and worked between Front and Fort streets and First and 16th street. That was the township four years after Boise was established.

People first starting moving east on Warm Springs Road and north on Harrison Boulevard and 13th Street in the 1890s, followed by the relentless push west until Boise and Meridian city limits first touched in 1999. Today Idaho’s two biggest cities touch for 5.39 miles, according to calculations by the Community Planning Association of Southwest Idaho.

By the 1960s and 1970s, in Boise and across America, downtowns had lost their allure for living and large-scale retail.

Boise’s downtown revitalization got started in 1985 with four pillars to provide the foundation for modern Downtown Boise: Eighth Street, Grove Plaza, parking garages and housing. The first three pillars emerged soon thereafter.

Downtown housing lagged behind but became a top priority in 2014 with the release of Urban Land Institute Idaho’s study, “The Next 1,000: Stimulating Housing in Downtown Boise.” The goal was to create 1,000 new residential units in Downtown Boise by 2019, since revised to 2020.

Since 2014, developers have completed 390 downtown residential units with another 347 under construction and 250 under city review for a total of 1,658 new units, according to city of Boise statistics. These include The 951, One Nineteen, The Watercooler, The Fowler, 14th and Idaho, Ash Street, The Afton, River Street Lofts, Fifth and Idaho, The Owyhee, and the proposed River Caddis, The Cartee and Scot Ludwig towers.

Livability.com, a real estate research and education website, in 2016 named Boise the No. 6 best downtown. Downtown Boise was fourth among 19 U.S., Canadian and Mexican cities in the Expedia Viewfinder Travel Blog’s list of North America’s Coolest Downtowns.

Scott Schoenherr

“I hear, ‘As soon as our third child graduates, I want to live downtown,’” said Scott Schoenherr, partner at Rafanelli & Nahas, who himself recently moved downtown. “I’m shocked how many people want to live downtown.”

Housing development likely will be the big player in downtown throughout the 21st century. Downtown’s increasing popularity will drive housing growth, but there is an equal necessity to convert surface parking lots into housing.

“People are going to have to live somewhere,” said Phil Kushlan, a former CCDC executive director. “You’re either going to live in a downtown environment or plow alfalfa fields.”

One term in vogue is mixed-use development, which invariably boils down to street level retail, offices above that and condos and apartments above that. Or at least the retail and residential elements, which are in play at The Watercooler and The Fowler apartments in Downtown Boise.

Diane Kushlan, a former Urban Land Institute Idaho district council coordinator, sees more to mixed-use development than retail, office and residential.

“Mixed-use also needs day care, schools, churches and parks that support the other three,” Kushlan said.

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