Parking is for losers (and the East End is losing)

Abandoned parking lot, by Ikhlasul Amal.

In case you missed it, Press Herald reporter Tom Bell did a great story on the surplus of parking in Portland's India Street district, and the unsavory impact that another parking lot is expected to have on local small businesses.

Bell interviewed two business owners whose shops and restaurants neighbor the proposed garage, which is being developed under questionable financial assumptions by Opechee Construction of New Hampshire.

Both business owners rejected the conventional wisdom that more parking is good for economic development. "Nobody wants to walk around in a neighborhood full of parking lots," said Samantha Lindgren, co-owner of Rabelais. "It's discouraging," agrees Nancy Pugh, co-owner of Duckfat and Hugo's, two of Portland's more successful restaurants.

Bell also reveals that the City is paying $64,000 a year to subsidize a half-empty high-rise parking garage right across the street. That's because the City's former Economic Development Director, Jack Lufkin, agreed to guaranteed lease payments to help finance that garage at the peak of the real estate bubble.

View Downtown Portland Parking Lots in a larger map

Map showing the proposed new parking garage (center), across India Street from the new, city-subsidized Ocean Gateway Garage (center right), and other neighborhood parking lots and garages in red.

Amazingly, Lufkin stands by that deal to this day, claiming that "the lack of parking is among the biggest obstacles to development in Portland."

This is pure bullshit. There are numerous factors that are keeping developers from raising new buildings downtown. The most fundamental hurdle is the lack of potential tenants willing to pay rents that would be necessary to finance new construction.

Of course, this problem is closely related to the high cost of construction and land in downtown Portland, which are both artificially inflated due to City Hall's minimum parking requirements. The fact that so much real estate in downtown Portland is already occupied by parking lots makes the remaining land more expensive to buy and build on.

In other words, it's not the lack of parking that's impeding development; it's the fact that our city already wastes way too much real estate and money on parking quotas and subsidies.

But don't take my word for it. In 1998, Philadelphia Federal Reserve Bank economist Richard Voith pointed out that downtown areas have a competitive advantage in their walkable neighborhoods and cultural amenities. Building lots of cheap parking, he argued, "is unlikely to dramatically improve a downtown’s competitive position because the suburbs have a comparative advantage in land uses that demand a lot of space, such as parking lots and roads."

In other words, don't destroy an emerging urban neighborhood like the one around India Street by trying to make it compete with a strip mall hellhole like the one just over the bridge in Falmouth Foreside (where, for the record, an abundance of cheap parking has not rescued the town from a blight of abandoned box stores).

Lufkin was laid off in 2007 and now works for Gorham Savings Drive-Thru Bank, where he's probably bullying small business borrowers into sinking their limited capital into more asphalt instead of in their payrolls, equipment, or actual growth.

But wait! Here's one other out-of-towner who thinks that giving over half of the neighborhood to parking garages is a good idea:

When it comes to attracting development, there's no such thing as too much parking, said Nicholas Iselin, director of development and construction for Intercontinental Real Estate Corp., which owns the garage today."

Sure, if I were getting a $64,000 check every year from city taxpayers for an empty parking garage, I might feel the same way. Why not tear down the entire neighborhood for taxpayer-subsidized parking garages?

Back in the real world, it's hard to see how this new garage is going to make any financial sense for Opechee, the developers, when the city can't even give the stuff away right across the street.

Of course, they haven't started construction yet, so they and their financial lenders still have some time to come to their senses...