At its meeting this Wednesday, the city council's government performance and finance committee will take the first public steps toward selling the money-losing Pacific Place parking garage, which has cost taxpayers millions of dollars since the city bought the garage in 1998 (at $23 million more than it cost to build, or twice the national average per parking stall at the time).
In 2011, the city loaned the garage $4 million, on top of $1.5 million approved in 2010; in 2013, the city projects a shortfall of $2.9 million.
Under the proposed agreement, the city would sell the garage, which was losing around half a million dollars a year, to Pine Street LLC, which developed and operates the Pacific Place mall, for $55 million, or $4 million more than its appraised value.
One reason the garage struggled financially was because its parking rate of $3 an hour is substantially below the market average for downtown—less than on-street parking in the downtown core, which costs $4 an hour.
In a letter to council president Sally Clark, Mayor Mike McGinn blamed "the ongoing recession, increased competition from other downtown parking garages, escalating debt service, other retail competition (University Village, Bellevue, etc.), and other increased costs" for the garage's financial failure.
One reason the garage struggled financially was because its parking rate of $3 an hour (lowered, on McGinn's orders, from the still-cheaper-than-average rate of $5 an hour) is substantially below the market average for downtown—less than on-street parking in the downtown core, which costs $4 an hour. While that may, in theory, have made the garage more attractive to parkers, that assumes drivers are aware, and taking advantage, of Pacific Place's cheaper rates.
Assuming the sale goes through, the garage will still be cheaper than its competitors; as part of the deal, Pine Street Group has agreed to keep prices at or below 80 percent of the market average.