How not to sell a parking garage

Photo by Allison DeHart
Robideaux the parish president tried to sell Robideaux the city mayor a lemon. The only thing that stopped the sale of the Buchanan garage was the council not wanting the city to keep bailing out the parish’s financial failings.

When the Buchanan Street parking garage was condemned last October, it caused a series of problems Downtown. There have been complaints on social media of courthouse employees feeling unsafe walking longer distances to their cars at night, of defendants being late for trials because it takes so much time to find parking, and of businesses losing patrons who don’t have easy access to street parking now that a couple hundred extra cars are competing for spots. 

If the parish side of Lafayette Consolidated Government weren’t such a financial and political dumpster fire, this would be an easy problem to solve. First we’d decide if we wanted to spend $2 million to $4 million renovating the garage or $6 million to $10 million tearing it down and building a new one. Then we’d decide whether to pay for that work with cash, debt or new tax revenue.

Instead, this quagmire has no easy solution. The parish has zero extra dollars to spend, no debt capacity to tap into, and no willingness among voters to approve new taxes. 

Robideaux’s Plan A: Sell the city a lemon

That the garage needed millions in repairs the parish couldn’t afford is old news. That’s why last year Mayor-President Joel Robideaux hatched a plan to sell it from the parish to the city, which would have foisted this financial millstone onto the city side of Lafayette Consolidated Government.

The concept made some sense. The city is sitting on an unassigned general fund balance of about $46 million, whereas the parish side of LCG has zero dollars of unassigned general fund balance to fix this problem. In fact, Robideaux had balanced that year’s parish budget in part by assuming the $770,000 transaction had gone through. Instead, the council shot it down. 

The garage was condemned 10 days after the vote to approve the sale failed; the city dodged a bullet. If that deal had gone through, the city would have a big liability on its hands. 

So Robideaux the parish president tried to sell Robideaux the city mayor a lemon. The only thing that stopped him was the council not wanting the city to keep bailing out the parish’s financial failings.

Robideaux’s Plan B: Partner with a developer

With his Plan A rejected, Robideaux has been attempting to turn this lemon into lemonade. He’s done so by issuing an RFP that bundles the garage with adjacent lots in the hopes of recruiting developers willing to invest millions of their own money to replace the lost parking while delivering a lucrative financial return to LCG and enhancing Downtown along the way. A tall order.

From the looks of the responses to his RFP, Robideaux’s vision seems impossible. The reason is simple — the parish can’t afford to pay the increased costs of leasing parking from a private developer, despite Robideaux’s protestations otherwise. Here’s how the math breaks down:

  • $800,000: The market value of the land under the garage and on adjacent parcels
  • $450,000: The cost per year to lease 265 spots from a nonprofit developer, based on the RFP response from Community Directions, an Opelousas-based nonprofit
  • Less than $100,000: The amount per year the parish has been spending to operate and (not) maintain the garage
  • $350,000: The additional cost per year the parish will have to come up with to lease these spots back from a developer if the garage is sold

Even if the parish could get a developer to pay $800,000 for the land — which isn’t certain given the derelict parking garage sitting on top of it — those proceeds would get eaten up within three years by the increased cost to lease parking. And moving forward, unless something changes dramatically, the parish side of LCG can’t afford to pay an additional $350,000 per year for anything. Because, in case you forgot already, the parish has zero dollars available in its general fund to pay for any new expenses. 

Robideaux tries to compensate for that by factoring the potential growth in sales and property tax revenues into his lemonade recipe. Unfortunately, increased retail sales won’t have any impact since LCG’s parish sales tax is only collected in unincorporated Lafayette. And there’s just no way for property taxes to increase enough to really move the needle on this particular issue. 

For every $10 million in new property value that’s created by redeveloping these lots, approximately an additional $50,000 in property tax revenue goes to the parish side of LCG. But of those dollars, the only money that can be used to pay for the garage comes from the parish general fund and the courthouse complex fund. And of that $50,000 in total new property tax revenue being generated Downtown, less than $1,500 goes to the parish general fund and $3,000 to the courthouse complex fund, for a fairly insignificant total of $4,500.

So even if the Buchanan garage were redeveloped into a $100 million colossus of commerce, and it added $500,000 per year into the parish budget, it would only provide less than $50,000 per year in new money to cover the gap in the increased cost of leasing parking.

Because of these numbers, it seems likely that Robideaux’s Plan B is dead on arrival, another victim of the parish’s financial morass. 

Please tell me there’s a Plan C!

So what is the parish supposed to do? How can we pay to repair or replace the garage and operate or lease parking if the parish can’t afford to do any of that?

Well, maybe it’s time to beg. There are other local public agencies that have a vested interest in Downtown and the cash available to pay for the needed renovations. For example, the Lafayette Economic Development Authority has $13 million available and is already making another major investment Downtown by building a new home for the Opportunity Machine. The Lafayette Public Trust Financing Authority has $16 million available and has focused most of its recent investments on spurring Downtown development. Or we could revisit having the city tap into its $46 million in unassigned fund balance to fix this blight in the heart of its Downtown.

Any one of these organizations could cut the check and make the problem of fixing the garage go away — and do so in a way that wouldn’t saddle the parish with having to pay back any debt to get this work done. But that would still only fix part of the problem. Because even if this were to happen, the parish would still need to increase spending around $200,000 to operate and actually maintain the garage moving forward.

Sadly, despite collecting $65 million per year in sales and property tax, finding $200,000 to cover this gap is no small feat for parish government, especially when most functions of parish government are underfunded. This should be a manageable expense. But it isn’t, and so we’re still left short of a solution.

If we really wanted to get creative and bold, we could consider something as radical as giving the garage and surrounding properties to the Downtown Development Authority and doubling the millage it collects so it would have enough money to renovate, operate and maintain the garage without passing the expense on to parish leases. Doing this would offer the advantage of elevating DDA’s capacity to actually foster development Downtown while also allowing the courthouse to replace its parking without having to increase its expenses.

But spending money on parking arguably isn’t the best use of funds for DDA when there are limitations to Downtown’s sewer capacity that are already preventing more development from happening today. And let’s also not forget the courage it would take to push any tax in this political climate. 

Brainstorming solutions reveals a troubling reality staring down the entirety of parish government. There are no easy answers. The garage, like the parish finances in general, has been left to fester for years. And now, one way or the other, someone’s going to have to pay to fix this situation. 

About the Author

Geoff Daily created FiberCorps and helped launch the Lafayette General Foundation. He now works as a launch strategist.

3 Comments

  1. Its really simple, use the 6.6mm LEDA has allocated for Opportunity Machine, get LPTFA to pitch in $3mm build the new garage in the middle of the block, acquire the surrounding land, sell it to residential developers who would pay for parking in the garage to help pay for it. Op Machine leases office space in anyone of the buildings downtown for $14/ft, reducing expenses and amortization expenses from $30/sq.ft to $14/sq.ft., saving $16/sq.ft. X 22,000 sq. ft which equals the $350,0000 you are looking for. Now you’ve solved 3 problems, parking, residential development, low occupancy in the downtown office space market. Creating a sustainable economic environment for downtown.

    Of course that would take courage to take on the rent seekers now running those institutions and profiting from our losses. Or we can allow them to keep spending our money on money losing projects like LITE ($30MM) or Uptown Lofts(-$125m per year). What do you think?

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  2. Jeremiah Supple July 11, 2019 at 7:48 am

    Good article Geoff,
    LEDA and LPTFA should first do no harm. Cronyism is expensive
    LEDA and LPTFA and the council spend funds in such a way as to actually UNDERMINE values of existing property rater than ENHANCING their values, as they are suppose to. It’s not that complicated. Government competing in the private sector with tax payer money, with no consequences for bad decisions, is a loose loose for all of us, except for the insiders that actually profit from the “grand boondoggles” we now are saddled with. It’s about time we honestly address these issues and look at them with critical eyes rather than covering them up. Thanks, well done.

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  3. Michael waldon July 13, 2019 at 11:48 am

    One more option: First, drop plans for the I-49 Connector and build the LRX bypass. Now the UPRR abandoned yard becomes available for surface parking and obviates the need for the garage. Although driving bridge pilings through the contamination into our drinking aquifer is NOT compatible with site remediation, paving would not be incompatible with future remediation or use exclusions. Finally, have free downtown shuttle buses circling from the transportation center around downtown. This option also provides needed long-term parking for train and Greyhound passengers.

    Communities throughout the nation have re-purposed their abandoned rail sites for environmentally compatible purposes. Our site has some special contamination challenges because of its age and its location above our water wells. However, paving could be beneficial as a part of a comprehensive remediation plan.

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