San Diego is relying on Balboa Park visitors paying for parking to cover its tab for a project that would transform the park’s central mesa.

The City Council is set to vote Monday on a plan to finance the controversial Plaza de Panama project, which aims to remove roadways from the park’s center and replace the asphalt lot behind the Organ Pavilion with a grass-covered paid garage.

Philanthropists have pledged to raise nearly $30 million for the project while the city’s poised to commit nearly $50 million, more than triple the amount it promised four years ago. The cost of the project has gone up more than 70 percent.

The city’s counting on profits from paid parking in the garage plus up to $10 million set aside for capital projects to cover its bills.

The city’s independent budget analyst, longtime critics of the project and at least one outside parking expert who spoke with Voice of San Diego caution that approach comes with risks, especially given free parking elsewhere in the park.

But a staffer for Mayor Kevin Faulconer, who’s led city efforts to revive the project, said the city and the Plaza de Panama committee are taking steps to protect the city’s operating fund and ensure philanthropists – not the city – are hit with the bill should the project cost more than the current $78 million estimate.


We Stand Up for You. Will You Stand Up for Us?

Let’s walk through their plans, protections for the city and the questions being raised about whether the city’s plans will pencil out.

The Deal with Philanthropists

The City Council will first vote Monday on an agreement between the city and the Plaza de Panama committee, led by Qualcomm co-founder and philanthropist Irwin Jacobs. It will be one of the city’s largest ever public-private partnerships.

The agreement commits the city to a $49 million share of the project and requires the committee to try to raise $29.1 million for continued project design work and a portion of construction costs.

To help with that fundraising, the committee’s proposed deal with the city includes a clause that would allow the committee to publicly recognize donors through features like bricks or bench signs and to name parts of the project, such as the bypass bridge or  parts of the rooftop park, after donors. The mayor and the city would get to sign off before that happens.

Jacobs has said he’s confident the committee can raise the money. He believes the ability to publicly celebrate donors will aid the process.

Once they ink the construction contract, the committee’s on the hook for any cost overruns.

Before the city awards a construction contract, the committee is required to formally pledge to bridge any gap between the city’s contribution and the updated cost estimate. If the committee can’t raise the cash, individual members must pay the bill.

“The majority of risk is on the committee,” said Katherine Johnston, Faulconer’s director of infrastructure and budget policy.

The group also must drop about $6 million into a contingency fund before the city awards the construction contract for the project. The city will use that fund to help cover bills from contractors. The committee is expected to keep a $6 million balance in that fund until outstanding construction bills fall to that amount.

But up until the city agrees to a construction contract, the Plaza de Panama Committee can walk away from the project if it can’t raise additional cash or if bids come in more than 5 percent higher than expected. The city can also bow out if the committee isn’t making sufficient progress with fundraising before the city advertises the construction contract, or if the city and the committee agree construction bids that follow are too steep.

If the project comes in below existing estimates, though, the group won’t have to raise as much money. The city owes its $49 million share no matter what.

The Paid Parking Premise

The city’s prepared to seek up to $50 million in bonds to bankroll its portion of the project. It’ll rely on paid parking in the garage to cover its annual debt payments over the next 30 years.

The project has gotten more expensive since it was first proposed in 2012, so the city is now planning to charge more for parking to cover the increase. For example, visitors will now pay as much as $12 for more than two hours on weekends and holidays and as much as $8 on weekdays, compared with the $5 capped charge proposed in 2012.

The city relied on analyses by consulting firm Parking Concepts Inc. to calculate those charges. The company, which was hired by the Plaza de Panama Committee in 2011, did an in-depth analysis of parking demand in Balboa Park five years ago and worked with city staffers on a simpler survey this fall.

That more recent study showed demand for parking in Balboa Park’s core had increased slightly, Johnston said.

Based on that work, the consultant assumed the garage would see occupancies between 36 percent and 61 percent and thus could bring in $4 million annually starting in 2020.

If that total’s accurate, it would likely more than cover both the cost of operating it and the city’s annual debt for the project.

But experts urge caution.

Patrick Siegman, a San Francisco-based parking and transportation planner said paid parking garages surrounded by other free parking options – as in Balboa Park – can face challenges.

“The danger in pricing one parking facility while leaving all the others around it free is you wind up with the free lots full and the pay parking structure underutilized,” said Siegman, who did not review the city’s estimates.

Jeff Kawar, deputy director of the city’s independent budget analyst’s office, also keyed in on that point in his review of the city’s financing plans.

He noted the difficulty of predicting parking needs in 2020 and offered this takeaway: “The accuracy of PCI’s parking demand projections will ultimately determine whether this is a financially self-sufficient project, or a project that will potentially require contributions from the city’s general fund in the future.”

If those assumptions are off by more than 17 percent, Kawar said, the city would be forced to dip into its general fund for the annual debt payment.

A separate IBA report also pointed to a handful of new costs that could fall to the city’s general fund, including an estimated $366,000 annually to maintain the new park space atop the parking garage and the potential need for additional security for the garage.

Johnston said she’s confident the city won’t have to tap the general fund.

She said the consultant’s projections don’t incorporate special events that might draw more revenue and were developed with the assumption some nearby lots would be full before visitors tried the garage.

“We think these are very conservative demand assumptions for the garage,” Johnston said.

She also emphasized cautionary steps the city’s taking to shield the general fund.

If the City Council approves the financing agreement, the city will set up an internal safety fund to hold excess parking revenues that can be used to cover the annual debt payment if the garage pulls in less cash in any given year. The city estimates that funding stream would be available as a backstop four years after the garage opens.

The city will also set aside about $44,000 a year in parking revenue for capital improvements in the garage.

“I don’t think there’s any potential to have negative impact on the general fund,” Johnston said.

A Worthwhile Investment?

The cost of the Plaza de Panama project has ballooned since 2012 due to increased construction cost estimates and regulatory changes.

Jacobs, Faulconer and the leaders of many Balboa Park institutions still want to move forward.

Others, including many who opposed the project back in 2012, aren’t so sure.

They point to the long needs list for Balboa Park’s iconic and crumbling buildings and the city’s limited ability to address those, plus changes following the opening of a 650-car garage for zoo employees and ex-Mayor Bob Filner’s move to mostly shutter the Plaza de Panama to cars.  They also question the proposed location of the garage, construction impacts and whether more parking is even needed.

“This is a tremendous amount of money for very little gain,” said Bruce Coons, whose nonprofit Save Our Heritage Organisation’s lawsuit stalled the project for years.

Supporters of the project, however, see Plaza de Panama Committee’s commitment as a rare opportunity to reclaim spaces now dominated by cars for pedestrians and to at least chip away at the park’s longtime parking woes.

Many, including Air & Space Museum CEO Jim Kidrick, also predict the potential success story could draw more philanthropy in Balboa Park.

“I think approval of project will put spotlight on the park like never before and will remind people of this park’s importance and ultimately provide the necessary attention that is needed to garner future city investment and future private investment,” said Kidrick, who chairs a group of Balboa Park institutions that back the project.

Faulconer and his staff have decided the investment is more than worthwhile.

If you incorporate the $14 million Jacobs has already sunk into the project, philanthropists will be nearly matching the city’s stake in the project, Johnston said.

“They’re taking on a tremendous amount of risk for private individuals. This is a public park and this is a City Council-adopted master plan,” Johnston said. “It’s incredible that almost every single public dollar will be matched with a private dollar.”

    This article relates to: Balboa Park, Government, Must Reads

    Written by Lisa Halverstadt

    Lisa writes about nonprofits and local progress in addressing causes like homelessness and Balboa Park’s needs. She welcomes story tips and questions. Contact her directly at lisa@vosd.org or 619.325.0528.

    20 comments
    David Lynn
    David Lynn subscribermember

    With "$14 million Jacobs has already sunk into the project" prior to even a Council approval let alone a groundbreaking, sounds like the consultants and lawyers are likely to benefit far more than the people of San Diego.

    Don Wood
    Don Wood subscriber

    Are the city hall politicians violating the city charter, which requires that the park remain available to local citizens in a free manner?  Does making people pay to park in Balboa Park violate the city charter? What does the city attorney have to say about this? The city should make sure it has the $30 million promised by the project boosters in hand and in a lockbox account BEFORE any construction is begun. The city has a sad history of depending on contributions from private groups, only to see their efforts crash and burn, and having to replace the promised money out of the city's general fund. Let's not repeat that mistake this time.

    Stephen Hon
    Stephen Hon subscribermember

    It is a sad day for those who want Balboa Park to retain it's historical integrity especially for the Cabrillo Bridge. Cal Trans spent millions to ensure the structural integrity of the bridge and insisted that it be done correctly because of the historical nature of the bridge. Any rational assessment of the project shows it to be the most intrusive and expensive way to address the issues it is supposed to solve. Revenue estimates for the garage are unrealistic given the availability of free parking near by. When that happens we are most likely to see paid parking in the rest of the park as opposed to using General Funds. Certain City Council Members have already stated that. Then the zoo will exercise it right to charge for parking in their lot. I would not mind them charging for parking if the revenue was used to maintain the Park but it will go toward a horrible white elephant of a project.

    Janet Shelton
    Janet Shelton subscriber

    I predict an article during construction that explains the reasons parking fees will be more than planned.  And then another after it's built explaining why money will need to come out of the general fund to pay for the garage.  Yes, some will park there, but most will use the free parking.  The main function of the garage will be to make the free parking easier to find.


    But those issues aside this is an awful plan and the money would be better spent on repairs.  But repairs aren't sexy, are they?

    Scott Garner
    Scott Garner

    @Janet Shelton I predict that once the garage starts missing revenue projections, the city will be quick to put in meters at the two lots closest to the garage and eventually turn all of the lots around the park into paid parking. 



    Brian Edmonston
    Brian Edmonston

    I know that the people involved with this have the best of intentions, but it really does seem like the cost of this project outweighs the benefits. 

    If you look at the dollars per sq ft of additional area it seems way out of whack with other improvements that could be make to the park with the same money.

    Also, it is worth considering that the Trump administration is planning to allocate additional federal money for domestic infrastructure.  We should considering trying to use this local money as a match for federal dollars at the typical 10:1 (or higher) ratio, rather than on a project that only uses local funds.

    David Crossley
    David Crossley subscriber

    I find it interesting that just a few yards away from the super-imposed artist rendering of the green space above the parking structure in the picture above, sit dozens of empty--free--parking spaces.

    merlot4251
    merlot4251 subscriber

    Absurd to spend this much money on traffic flow and parking.  For a fraction of the cost, the city should close Cabrillo Bridge to all traffic (except emergency vehicles) and redirect traffic around to Park Blvd where the parking lots are.  Take a little of that $78M and extend the Balboa Park Tram service to the west side of the park and extend its operating hours.  Let pedestrians and cyclists enjoy the magnificent views of the city from the bridge. Spend the rest of the $78M on badly needed repairs and upgrades in the park.  Too bad this issue was not on last week's ballot. 

    Bill Bradshaw
    Bill Bradshaw subscribermember

    @merlot4251 Amen.  Now that our brain dead council has approved this turkey, better use the place soon because its going to get really screwed up.  The annual pass is a great bargain; use it now!   

    Rick Smith
    Rick Smith subscriber

    Twp points. Underground parking is expensive, add in the bridge and tunnel and road improvements and it gets more expensive.  The downtown condos recoup that expense via condo sales, a public park can't do that.

    And with nearby free parking, for most people parking in a pay lot will be parking of last resort.  No way will the financial projections work unless parking is banned in the free lots until the pay lot is full.  Like calling the free lots "backup parking"  Not going to happen.


    Rachel Laing
    Rachel Laing subscribermember

    @Rick Smith The way the traffic flows in the project, everyone entering from the west will be routed through the Alcazar lot for (a) disabled parking; (b) dropoff; or (c) valet parking. If they want none of those options, they'll go on to park. The first lot they'll encounter will be the paid structure. Tourists, who make up a sizable portion of BP visitors, will see this first and probably will not be aware of the free parking options. They'll probably be accustomed to paying for parking, because that's common at most tourist attractions and in most urban areas. In addition, many residents find paying a few bucks to not have to hunt is well worth it. If you're a typical resident, it's not uncommon to go to the park for an hour or two. Plenty of people will pay $2 or $4 or $6 for the ease and convenience of the closest parking to the center. Not all San Diegans feel entitled to free parking, but for those who can't or won't pay for parking, there will be free options.

    Rick Smith
    Rick Smith subscriber

    @Rachel Laing @Rick Smith I'd like to see a traffic study.  I would venture most tourist enter the park via Park Blvd., not from the west.  Also, there is this thing called the Internet, they would learn about the free parking options very fast.

    Kevin Swanson
    Kevin Swanson subscriber

    @Rachel Laing @Rick Smith The additional 267 parking spaces, the added traffic, and a roadway that creates a barrier between the International Cottages and the Spreckels Organ Pavilion, together with a bridge that encourages more - not less automobile use, costs the Public over $300,000 each. That is significantly more than $12/day. Those additional parking spaces go to being reserved for Valet Parking and the Institution Employees.

    That is a high price for the Public to pay for benefitting those who can afford Valet Parking or work for an institution Leasing Space at a minimal cost from the City.

    At the same time, there is a Guarantee of funding cuts facing the City.

    To move forward with an individual project with such a significant change to the Park for a group that is not representative of the Public is a mistake.

    bgetzel
    bgetzel subscriber

    The inherent assumption here is that if the philanthropists cannot raise the required amount of money, the project would not go forward. However, the timing of the design and engineering, which could take some 9 months, is not mentioned in the article. If the city proceeds with the design and engineering, while the fund raising effort is going on, and if, in the end, the fund raising is inadequate, the city would likely be stuck with the D & E bill.  That bill could be several millions of dollars. That is a risk that should be addressed.

    Rachel Laing
    Rachel Laing subscribermember

    @bgetzel The private philanthropists are footing the bill for nearly all pre-construction costs. They've paid $14 million for the design, engineering, EIR and then the code updates and cost of estimates. The city will be out some staff time, but that's about it.  

    Kevin Swanson
    Kevin Swanson subscriber

    #FaulconersFolly This project, led primarily by white men of wealth and power, serves their goals and not those of the Public. The Public recognizes the need for a comprehensive Parking Plan for Balboa Park that includes Zoo Promenade Parking and shuttle systems without the Plaza de Panama Project as presented. The "leadership " of the Museum Lessees ar selected by their Boards. They purportedly represent their Members, yet do not have signatures from those Members in support of This Project. The Project spends funds that the City could use more effectively elsewhere. It leaves Naming approval with Mayor Faulconer alone. The added parking spaces end up costing over $300,000 eaoand are reserved for valet parking and institute parking.

    This Project is a clear example of what is wrong with the Politics in the City of San Diego, where the Public is ignored in favor of the rich political supporters.

    bgetzel
    bgetzel subscriber

    @Kevin Swanson Villifying people who do not agree with you is happening all too much in our country these days. It is OK to civilly diasgree with the philanthropists, or "the rich and powerful", as you say. But to impune their motives without any evidence is  reprehensible. I cannot see how contributors would personally gain (naming rights? - oh please). i personally agree that the project is not a good idea, based on the facts at hand. Let's stick to the facts. Let's debate the issue on the merits, not innuendo.

    Kevin Swanson
    Kevin Swanson subscriber

    @bgetzel @Kevin Swanson Debating the project on what merits? Charging the Public over $300,000 each for additional spaces that are reserved for Valet and Institution use? Changing Balboa Park's landscape for more auto use without implementing either a parking plan or alternatives such as the Zoo Promenade Parking which have been incorporated into the Central Mesa Plan?

    Having a mainly white male elite spend money on their favorite project that does not benefit a significantly different demographic, culturally and income-wise, that use Balboa Park?

    Handing over the power to name structures within a Public Park to a Private Group with nominal veto power by one individual - with no checks and balances to determine the value or length of that naming right?

    This Project does not really have any merits. Park land could easily be reclaimed by moving the Parking to structures such as the Zoo Promenade or a new structure on Inspiration Point.

    Janet Shelton
    Janet Shelton subscriber

    @bgetzel @Kevin Swanson Is speaking the truth vilifying them?  We are getting this design shoved down our throats because the rich and powerful want it.  Is this the best design, the best use of private and public dollars?  And what of the historic value of the bridge.  Next we knock down the Museum of Man because it doesn't look good with the Timken.  That old bridge and those old buildings are, well, old and useless.