Government, Real Estate, and Travel & Tourism

Parking rates won't chase businesses

But employees’ ‘front door’ mentality needs to be rethought.

December 12, 2014
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parking rates
Downtown parking is an issue for many employers. Some are fortunate to have space available in front of their workplaces, while others require that employees walk a distance to work. Photo by Chris Pastotnik

The Grand Rapids Parking Commission is considering whether to recommend monthly parking rate changes for its ramps and surface lots, which has some people wondering if higher pricing in high-capacity lots will chase some downtown businesses to the suburbs.

That’s not likely, said David W. Wiener, West Michigan office broker for Colliers International.

“The idea that offering some more expensive parking and less expensive parking to companies downtown will have companies leaving is not accurate in my opinion,” he said. “The key for the commercial real estate and the downtown to continue to grow is available parking.”

According to Gerald Salzman, a senior planner with Desman Associates, the consulting firm brought in by the Parking Commission to study downtown parking and provide recommendations, there is plenty of parking downtown.

While Wiener acknowledges no one will be happy about a rate increase, he thinks if the Parking Commission raises rates on the high-capacity lots while reducing rates on lower-capacity lots, employers will accept the pricing as part of doing business downtown.

“As long as they are going to decrease the rates in some of the other lots, I think it’s a good idea,” he said. “The people who want to be downtown are going to be downtown.”

Elizabeth Slane, regional property manager at The Hinman Co., shares a similar opinion.

“This scenario on rate change presumes parking is rate driven rather than location driven,” Slane explained. “The impact on downtown businesses may be based on a number of factors: the company’s dedication to participate in employee parking costs; number of spaces contracted in specific locations; accessibility via public transportation (DASH, skywalk access, etc.); and a willingness to change parking arrangements to mitigate expenses.”

Salzman seemed to lean toward the likelihood that his firm would recommend price decreases in the lower-capacity lots.

“In the long-term future, if you want to park at the front door, then you are going to pay more,” he said. “If you don’t care so much about that, you can park for a much lower rate (farther away).”

There are few signs that businesses will move from downtown, even if parking rates increase in high-capacity lots.

Wiener noted the rising cost for commercial real estate downtown.

“Our average rates for commercial real estate downtown in the last three years have risen to $4 a square foot, but people want to be down there,” he said.

Wiener said the value of being downtown outweighs the cost of parking for a lot of businesses.

“If you are able to create one new relationship because of that sphere of influence of being downtown, that is worth a lot more than a year’s worth of parking,” he said.

As downtown continues to grow, drivers might need to adjust to parking in a thriving city.

“In almost every other city, people are absolutely used to walking three or four blocks,” Wiener noted. “There are so many cool things happening and if people have to walk a little farther, if we have to learn to use public transportation, these are all good things for the future of Grand Rapids,” Wiener said.

The Parking Commission and Salzman talked about the mental shift that needs to be made to accommodate the reality of parking in a bustling downtown.

“People in Grand Rapids are conditioned to parking at the front door,” Salzman said.

Slane noted that mental shift, as well.

“It is simply human nature to seek the most direct route between two points, including parking closest to a destination, and we’ve all looked for the closest space at the mall or supermarket,” she said. “A mind-shift regarding downtown parking is needed to steer away from ‘front-door’ parking and recognizing that growth, development and absorption downtown will necessitate pedestrian activity. Viewed positively, encouraging a walkable environment benefits everyone.”

Wiener said employers could provide incentives for employees to ease the transition from front-door parking to lots that might require a three- or four-block walk.

“We are working with a company currently that gives an allotment of $125 per month for parking,” Wiener said. “A number of their employees park in the $40 DASH lot, so that is extra wages to them. It encourages public transportation.”

Wiener said people who want to park at the front door would pay the additional amount to do so, while those who are willing to walk or take a DASH bus and save some money will do that.

He noted he often has to come and go from his office up to a dozen times a day so, for him, parking close by might be a necessity, but there are other people who are only coming and going once per day who don’t need that access.

During a forum on transportation in November, Suzanne Schulz, city of Grand Rapids planning director, said the goal is to achieve a shift of 40 percent to alternative modes of getting downtown, such as public transportation, biking, walking or carpooling.

Wiener said that goal is in line with what employers want.

“As employers, we want dynamic people, smart people, creative people, and those people tend to go toward downtown,” he said. “We want people walking, biking and living (downtown).

“We have seen a dramatic amount of companies that want to be downtown for the culture — and the culture is young people walking, living and being part of the downtown.”

Wiener said some companies do not find downtown to be the best choice for their business.

“There are a lot of companies that want to be in the suburbs; one is not right or wrong,” he said.

Slane agreed some companies are better suited for the suburbs.

“Locating downtown is an intentional decision based on more than parking costs,” she said. “Recognizing that there is no such thing as free parking, companies must take into consideration all costs affecting the bottom line to determine if locating downtown or in the suburbs is the best fit for their business.”

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