Yesterday I needed to go downtown. Specifically, I needed to go to the Hennepin County Government Center. We’re still waiting for our new Fit to arrive, but in the meantime I needed to apply for a duplicate title for our old trade-in because for whatever reason I just can’t find the original title.
Anyway, downtown. I normally would have taken the light rail, as I live within walking distance of a station, and the Government Plaza station is about 100 feet from my destination. But there were just enough extenuating factors to make it seem like a good idea to drive instead. The ultimate determining factor was that it probably wouldn’t cost much more to park than to ride. I would’ve spent $4 on a 6-hour pass, and I expected parking to be somewhere between $10 and $13.
So off I went on my merry way. After conducting my business with the county, I decided to stay downtown for a while, to have lunch at one of my most-missed lunch spots since I stopped working downtown last March, and then to do some work at a nearby Caribou. Such is the luxury of being able to carry your entire office in a messenger bag.
In the end I spent a total of 3 hours downtown before heading back to the parking garage. When I put my ticket in the pay machine, I was aghast — aghast, I tell you! — to see the price for 3 hours of parking adjacent to the government center. $23. Let me repeat that in a more suitable fashion:
$23. For 3 hours of parking.
Assuming that these exorbitant rates are only in effect between the hours of, say, 7 AM and 5 PM (and not even considering evening and weekend parking), and assuming that there are approximately 500 spaces in the garage (which seems a reasonable, conservative estimate, having been inside it), then Allied Parking is raking in over $38,333 per weekday, or $9.97 million per year, on this one garage alone. I realize it is a large physical structure and it requires maintenance, but the parking and payment process is fully automated, so they’re not even paying someone minimum wage to sit in a little glass box and collect their ransoms for them.
Contrast this with the apartment building I used to live in downtown. Our rent was something like $1200 per month. There were 24 apartments per floor, and 28 floors of apartments. Even assuming everyone was paying that much (which probably isn’t the case, since ours was a 2-bedroom but 20 of the apartments on each floor were only 1-bedroom), the apartment building’s revenue would work out to only $9.67 million per year (but like I said, in reality it’s probably significantly less than that), and they had a staff of maybe 20 or 30 people, and a lot more maintenance than a 6-story parking garage would require.
Bottom line: if you want to make money in downtown real estate, just build a parking garage. Frankly I’m surprised there’s anything downtown but parking garages.
