City may sell money-losing Pacific Place garage
The mall’s operator would buy the faciity for a proposed $55 million. Parking rates would stay at 80 percent of market rate for five years under terms of the sale.
Seattle Times staff reporter
The city-owned Pacific Place parking garage — a money-loser since the recession undercut shopping and entertainment downtown — could be sold to the mall’s owners under a proposal before the Seattle City Council.
Parking rates would stay at 80 percent of market rate for five years under terms of the sale.
It’s a good time to get rid of the garage, the city says.
The city loaned the garage operations $4 million from its general fund to cover expenses the past two years. And it expects to continue losing millions, said Fred Podesta, director of the city Finance and Administrative Services, which negotiated the proposed deal.
Instead, the city wants to sell the garage for $55 million to Pine Street Group, the mall operators.
The garage cost about $50 million to build in 1998 — and was appraised at about that last year — but the city paid $73 million to the mall developers to aid redevelopment of a three-block area downtown. That included moving the Nordstrom flagship store into the building formerly occupied by Frederick & Nelson and revitalizing several surrounding blocks.
The debt payments have increased over the past few years at the same time revenues have plummeted. The city still owes $59 million on construction bonds.
The garage made money for a decade, but use started to fall in 2004 and dropped sharply when the recession hit.
The city tried raising parking prices several times to offset the lost income, only to lose more customers.
In summer 2011, it lowered prices temporarily to slightly less than the $4 an hour it cost to park on the street downtown, but shoppers haven’t returned in the same numbers.
“We experimented with lower rates. We lost more money,” Podesta said.
Councilmember Jean Godden said running a parking garage is “obviously not our forte.”
“Our studies show it is going to cost us more every year. Turning it over keeps the retail area strong and allows us to continue to collect tax revenues,” she said.
Since it was built, those taxes have totaled about $27 million, according to city figures.
Pine Street Group says the city hasn’t done a good job on upkeep and maintenance and hasn’t been willing to lower prices enough to lure more customers.
“Our intention — in the service, the maintenance, the pricing — will be that more people want to use it, rather than less,” said managing partner Matt Griffin.
Griffin said his management group has been asking the city for improvements to the garage for the past year.
Ticket vending and payment machines need replacing, he said.
And the garage needs to be marketed with deals tied into the stores, restaurants and the movie theater at the mall, Griffin said.
“The garage wasn’t getting repainted, the lights were out. The city recently switched operators and it’s much better, but it took a year of fairly harsh discussions to get it done.”
Kate Joncas, president of the Downtown Seattle Association, said the Pacific Place redevelopment deal has been positive overall for the city. It allowed Seattle to attract new businesses and to bounce back more quickly from the recession than other cities.
She said the city doesn’t have the experience or skills to effectively manage a parking garage.
“I’d get frustrated by the long lines to leave the garage because of the backup at the automated machines. There’s no reason for that,” Joncas said. We know that parking is a barrier to coming downtown. In order to stay competitive, we need the service at the garage to be excellent.”
Lynn Thompson: email@example.com or 206-464-8305. On Twitter:@lthompsontimes