Financing Parking Garages: Q&A with Parking Consultant Gerard Giosa


A public plaza in downtown Princeton, NJ, made possible by the transformation of two surface parking lots into a municipal parking garage. The redevelopment also included new shops and apartments, a new public library building, and a food market. Image courtesy of Princeton Public Library/Flickr under Creative Commons License

The new parking structure in downtown Princeton is a 500-space automated garage that offers shared parking—residents use the garage at night, and shoppers use it during the day. The garage is hidden by an attached apartment building with ground-floor retail space, with a new public plaza in front of the apartments. Image courtesy of Joe Shlabotnik/Flickr under Creative Commons License

The development project in downtown Princeton “harmonized and repaired the fabric of the downtown area, resulting in a marvelous new town square adjacent to the library,” according to Studio Hillier, the architecture firm that designed the new library building. Image courtesy of Princeton Public Library/Flickr under Creative Commons License


How can structured parking make sense if it costs so much more than surface parking? Building structured parking is often a necessary prerequisite to free up downtown land for redevelopment, enabling communities to grow and thrive. But cost is perceived as a huge impediment to building parking garages. To find out more about how downtowns have succeeded in building parking garages, in spite of the high cost, I spoke with Gerard Giosa, parking consultant and president of Level G Associates, in December 2013. Giosa specializes in parking garage feasibility analyses, and is co-author of Parking Matters: Designing, Operating, and Financing Structured Parking in Smart Growth Communities. He also prepared analyses of the economic benefits of the four proposals for the ParkingPLUS Design Challenge.

Morristown, a New Jersey suburb about 30 miles west of New York City, prospered during the recent recession, while similar communities were battered. What was the role of parking structures in Morristown’s story?

Gerard Giosa: The Town of Morristown constructed a $10 million downtown parking garage in 2000 that became the catalyst for over $60 million in new residential and commercial development in the immediate vicinity over the next five years. A second 800-car downtown garage that was completed in 2008 at a cost of about $16 million supported a new round of residential and commercial redevelopment totaling $125 million. This does not include a wave of new and expanded restaurants, pubs, coffee shops, and yogurt shops that have popped up in recent years in the wake of this new development.

Several other New Jersey towns have employed a similar strategy to attract investment in their downtowns, most notably Cranford, Summit, Montclair, Princeton, and New Brunswick.

Who spearheaded the developments in Morristown?  Were the garages built by private developers, the Town, or through public-private partnerships?

Giosa: The Morristown garages were developed by the Morristown Parking Authority, a quasi-public agency created specifically to finance, develop, maintain, and operate the municipal parking system. Parking authorities like those in Morristown and New Brunswick work closely with the local governments that created them, as well as other municipal agencies such as Business Improvement Districts, to support and foster downtown economic growth.

One of the biggest impediments to building a parking structure is cost. Many great concepts have never been built because of the high price tag. But for Morristown, cost wasn’t an insurmountable issue. Why? What kinds of financing strategies did they use?

Giosa: Morristown, like many other towns in New Jersey, has parking meters on their streets, and these meters serve two important purposes. First, they help create parking space turnover on streets in the central business district. Second, they generate revenue that is used to expand, maintain, and beautify the public parking system. Morristown’s garages were financed with 30-year tax-exempt parking revenue bonds issued by the parking authority. Because the parking authority is an entity separate from the Town, this debt is not applied toward the Town’s debt limit.

Just how much does it actually cost to build a parking garage? How does this compare to the cost for a surface lot?

Giosa: Parking garage construction costs can vary tremendously, but based on several recently completed parking garages in the Bronx and northern New Jersey, a basic but attractive parking garage with an elevator, security cameras, and energy-efficient lighting can be designed and constructed for about $21,000 per parking space. By comparison, the cost to design and build a surface parking lot is about $3,000 per parking space.

How can structured parking make sense if it costs so much more than surface parking?

Giosa: Surface parking gobbles up so much land that it begins to negatively affect the character and walkability of a downtown business district. An 800-car parking garage can be constructed on a piece of land that is just 120 feet wide by 270 feet long, and it can be tucked into the center of a downtown block and surrounded by existing and new buildings so that it is hardly visible from the street. By contrast, if we wanted to provide those same 800 spaces in a surface parking lot, the parking lot would have to be the size of four and a half football fields! And it’s almost impossible to assemble that volume of contiguous land in an existing downtown setting.

Can a parking garage pay for itself?

Giosa: For a parking garage to pay for itself, the owners would have to charge people more than $150 per month or $7.50 per day to park. While these charges are common in some cities, they are not customary on Long Island. However, the Intermodal parking garage at the Mineola train station comes close at $6.00 per day. When parking fees alone are not sufficient to repay a loan for a new parking garage, local governments look to bridge the gap with other sources such as revenue from parking meters, like Morristown, or revenue created by an accompanying redevelopment project.

What factors drive the cost of a parking garage up or down?

Giosa: There are a number of physical factors that will affect the ultimate cost of a parking garage.  For example, a garage with underground levels is substantially more expensive to build than a garage that is above grade and open to the air. Another way to save costs is to use a sloping floor design, in which the sloped floors of the garage—rather than exterior or spiral ramps—provide vertical circulation for automobiles. And one of most effective methods to reduce the cost of a parking garage is through a public-private partnership. When a local government designates a private developer or redeveloper for their project, a business partnership is formed in which controlling costs is in the best interest of both parties.   

What about the costs to operate and maintain a garage, once it has been built? What are these costs, and can they be reduced or offset?

Giosa: A good number to budget for ongoing parking garage operating and maintenance expense is about $500 per space per year. This can be reduced by installing energy-efficient lighting or photo-electric cells on the roof of the garage. It is also critical to perform routine preventative maintenance on the garage, including sealing decks and replacing caulking and joints, to avoid major structural repair bills as the garage begins to age. With a good preventative maintenance program, a parking garage can be expected to last 50 to 70 years or longer. These preventative maintenance costs are included in the $500 per space per year budget recommendation.

What are the costs to operate and maintain a surface parking lot?

Giosa: A good number to budget for ongoing operating and maintenance expense for a parking lot is about $300 per space per year.  This figure is lower than a parking garage budget because things like column and beam maintenance and elevator service items are not required. However, parking lots will have higher budgets for items like snow removal and pothole repair.

Do you know of other suburban communities, in addition to Morristown, where parking garages have helped the downtown prosper? Tell me about your favorites.    

Giosa: The Spring Street parking garage and redevelopment project in Princeton, NJ, which was completed in 2004, includes a 500-space garage, rental apartments (including low and moderate-income units), retail space, and a new public park. This project is a key part of the significant revitalization of downtown Princeton over the past decade.

The New Brunswick Parking Authority (NBPA) has been the driving force behind an incredible downtown transformation and construction boom over the past 15 years that has included the Child Health Institute, a new Family Court building, the Heldrich Hotel and Conference Center, a branch of Middlesex County College, a medical office building, a Rutgers Bookstore, a Fresh Grocer food market, a Wellness Center, restaurants, retail space, office space, and more than 500 dwelling units. The NBPA constructed six parking garages in this time span in direct support of these exciting projects.

If New Jersey can do it, can Long Island?

Giosa: In a healthy redevelopment environment, local governments, professionals, developers, and builders come together to imagine and create great projects. ParkingPLUS-type redevelopment programs will have these teams meeting in the middle of a parking lot—and great projects will follow, to the benefit of Long Island.