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A 797-space parking garage plays an important role in paying for the proposed $45 million overhaul of the Plaza de Panama. If parking revenues lag more than expected, the city’s budget could be on the hook.
The City Council is scheduled to vote on a plan to remake the western entrance and traffic flow through Balboa Park next Monday. We’ve been looking at various pieces of the plan and the discussion it’s sparked over the last couple of years. Catch up with our reader’s guide if you’re just diving in.
We wanted to take a closer look at one of the biggest pieces of the plan — a new parking structure behind the Spreckels Organ Pavilion. Parking there would usually cost $5 for five hours, except for special occasions when the city might decide to charge $10 or $20.
The 797-space parking garage plays an important role in paying for the $45 million overhaul of the Plaza de Panama. The plan’s organizing committee, led by Qualcomm co-founder Irwin Jacobs, has pledged to privately fundraise most of the money. But Jacobs won’t pay for the parking structure. The committee is asking the city to borrow $16.5 million to finance its construction.
The underground garage, which will have green park space on its roof, would be built beneath what today is an asphalt parking lot. The parking structure costs about $16 million, but the city’s upfront contribution is capped at $14 million. Jacobs’ committee has said they’ll pay for any extra costs if they discover the structure or the whole plan will cost more than expected. They’ll also pay for the costs of designing and building the rooftop park.
The city would borrow $14 million to contribute to the project and about $2 million more to start a reserve fund.
The plan’s proponents count on enough money coming in through people paying for parking to cover those payments. They say the parking fees would also be enough to cover the staff to operate the structure and a proposed tram service to shuttle people around the park.
But if not, the cash-strapped city would have to dip into its day-to-day operating money to make that annual payment. The city’s Independent Budget Analyst asked serious questions about how much the parking structure would be used since there are free lots nearby and urged city officials to be conservative and cautious with agreeing to this kind of financing in a report last summer.
Jacobs’ Plaza de Panama committee has a few ways it says will guard against having to do that:
• The committee paid for two analyses to project how many people might pay to park in the structure each year. Parking revenues would be about $2.5 million annually, they found.
About $1.2 million would go to operating the parking structure and trams. Another $1.1 million would be used to repay the money the city borrowed. The remainder would go into a reserve fund or into city coffers.
They never count on the structure being 100 percent full. The fullest they expect it will be is 61 percent full on weekends during the day.
• The city would borrow $16.5 million but only $14 million would go toward construction costs at the outset. The committee plans to use $2.1 million to start a “Safety Fund,” which would make it possible to pay its borrowing costs in the years before the structure opens in February 2014. After that, any extra parking revenues could replenish the safety fund and then go to other city expenses if the city chooses.
Parking revenues are projected to jump in 2015 because of special events in the park, but any extra money that comes in that year would go to the reserve fund.
The committee set up the reserve fund idea in response to the city budget analyst’s concerns.
• In future years, if revenue wasn’t enough, the city could raise parking prices or try to reduce its operating expenses for the trams and the structure, leaving more money to cover the debt payment.
To learn more about what the parking garage would look like, revisit our post with photographs of the proposal from all angles. And here’s the city report containing parking analysis and more detail about the proposed financing plan.
Disclosure: Irwin Jacobs is a major supporter of Voice of San Diego.
I’m Kelly Bennett, reporter for Voice of San Diego. You can reach me directly at email@example.com or 619.325.0531.
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