Land swap could provide Port Authority immediate economic development opportunity

Hamilton County Commissioner Chris Monzel (R) has repeatedly stated that the county should not be in the parking business. In doing so, Monzel has suggested that Hamilton County sell off its parking assets at The Banks and elsewhere in downtown Cincinnati.

An exclusive UrbanCincy analysis shows that Hamilton County currently has approximately $38.7 million worth of parking assets at The Banks sitting on land valued by the Hamilton County Auditor at $10.4 million.

At the same time, Hamilton County and leaders from the City of Cincinnati keep working to find ways to work together. One of those strategies has led to the increased investment, by both the city and county, in the Cincinnati Port Authority. The idea, officials say, is that the Port Authority could become a Cincinnati Center City Development Corporation (3CDC) equivalent at the county level.

As leaders work with the Port Authority’s new CEO, Laura Brunner, they should explore selling or trading these parking assets to parking management companies that control potentially developable land elsewhere. Five unique locations come to mind throughout downtown Cincinnati.

4th & Plum:
This lot has long sat vacant, and had been speculated for a mid-rise condominium tower within the past decade. Nothing has happened, but UrbanCincy has previously opined that this collection of two parcels would be ideal for a small dog park and residential mid-rise, or even a small park designed to accommodate public debate. The 1.71-acre piece of land is valued at $6.1 million.

View Hamilton County Land Bank Proposal in a larger map.

7th & Vine:
Two small parking lots occupy this eastern portion of Vine Street at the edge of Piatt Park, and just north of Fountain Square. The property sits within a stretch of several blocks that include restaurants, nightclubs, bars and local shops.

A residential high-rise with street-level retail would seem to be an ideal candidate for this .6-acre plot of land in the heart of the city center. Previously, UrbanCincy has suggested that this street-level space might be a perfect, and centrally located, spot for a small urban grocery store. In total, the land and its improvements are valued at approximately $2.8 million.

Central & Walnut:
This particular site is chopped up into eight different parcels with various owners, but it is also located adjacent to the Hamilton County Administrative Offices, Hamilton County Courthouse, and sits immediately on the phase one route of the Cincinnati Streetcar.

In total, the .8-acre piece of land is valued at $2.3 million and would make an ideal site for an 8-10 story structure housing either offices or residences.

Court & Walnut:
Located immediately south of the previous site, this .9-acre location is valued at $2.3 million and will also be a prime location along the new modern streetcar line connecting the central riverfront with the northern reaches of historic Over-the-Rhine.

Similar to the 9th & Walnut site, this location includes seven different parcels owned by more than one entity, and would be well-suited for the same type of development.

9th & Main:
This .28-acre site is the smallest of all those identified, but has a total value of $904,000. While the site is relatively small, it also sits right on phase one of the Cincinnati Streetcar route, and would serve as an attractive residential infill site.

In total all of the sites would account for just over one-third of the total appraised value of Hamilton County’s parking assets at The Banks. UrbanCincy proposes that the county either sell off those assets at The Banks, and use the proceeds to purchase these non-county-owned sites, or trade those assets to parking management companies for their property downtown.

This endeavor would rid the county of the parking facilities it does not wish to maintain, while also seeding the Cincinnati Port Authority with new capital and resources to use for economic development activities. The end result would also create more tax generating properties on the region’s most valuable real estate.

  • Matthew Hall

    This is exactly the kind of win/win deals we need in Cincinnati to show people that local politics doesn’t have to be a fight to the death between competing tribes bent on each other’s destruction. I’m more hopeful about such possibilities in Cincinnati than I’ve been in many years.

  • Jord

    The problem with selling the Banks garages is how reliant the city is upon their maintenance. Not only is a city neighborhood being built on top of the garages, but they serve as flood protection.

    It puts private garage owners and the city/county in a precarious situation where the garages are basically “too big to fail” as far as the city/county is concerned, and subjects the private owner to the needs and demands of the governments who have more interest in the asset than a typical privately owned space.

    Maybe it can be worked out, but this is no simple transfer.

  • Jon

    ^ Great points.

    Also, the majority of parking revenue in the garages on game days goes to the teams (part of their leases). I doubt a private owner would be interested in those kinds of restrictions.

    Additionally, if you own a .2 acre lot, do you get .2 acres of value in the garage if land is swapped? It sounds like a nice idea, but with many different operators, etc, it seems a bit like a pie in the sky idea.

    The actual sale/purchase concept is more feasible, but is losing (probably at a value well below market rate) an entirely publicly funded asset that serves many municipal purposes worth it? (park, banks, flood wall, etc. all rely on the condition of the garage).

    The simpler option is to place a tax on surface lot spaces near the streetcar line. This has been talked about in other American cities and would incentivize development over letting prime real-estate continue to sit as a blank surface lot.
    However it would likely be highly unpopular.

  • Jon

    Also, just curious. Was there a reason the large 7th & Sycamore lot was left off? With a new city owned garage planned to replace the empty Red Cross building, this also seems like a perfect lot for high-rise development.

  • Matt Jacob

    I’d tend to agree with Jord that selling off the Banks garages would be much too complicated and way too political to realistically be accomplished. It’s something better left in public hands at the very least until the second half is finished.

    That being said, I think a reevaluation of both city and county surface parking would fit very well into the mission of the Port Authority to “enhance the use of the land resources throughout the area resulting in the retention and generation of jobs and the generation of additional tax revenues.” as their website puts it. Especially at a time when so many new spaces are coming online to the south, the county would do well to take existing northern spaces offline through redevelopment and force other parking companies to build vertical in that area. It would certainly increase the value of the land in that area(and tax revenue). That space on Central and Walnut or Main looks like a pretty good spot for a hotel close to the casino.

  • Aaron Watkins

    I think the worst example (or best I suppose) is all of the parking lots around City Hall.

  • King Kevin

    Surface level parking is such a waste of space, and in my opinion they are death to a city. I hope that something cool can happen with these lots. It will be long overdue.

  • Jake Mecklenborg

    What’s amazing is that most people don’t understand that buildings used to be where the lots are.

  • As others have noted, this is a complicated and possibly unworkable scenario, but I certainly agree with the underlying premise. Governments should NOT be interested in parking revenue of garages and surface lots, but SHOULD be doing things to promote development.

    IF the county can sell off the Banks garages while still retaining some control over them as necessitated by flooding issues, structural/safety issues, etc., and IF they can get fair value for the cash flows they’re currently getting now, then they should. But meeting those two requirements before selling will be difficult. A more interesting possibility may be one where private investors put forth maintenance money in exchange for the parking garage’s cash flows, while the city maintains ownership of the structure itself. It’d be like selling the spaces without selling the actual garage.

    Also, I like the land bank idea, but it’s certainly more appropriate for 3CDC to try than the Port Authority. We’ve had plenty of problems when the county has messed with projects at the city- or even neighborhood-scale (the stadiums being an obvious example). Let the city (and private-public relationships via the city) control its own development.

  • While this particular scenario may prove to be “unworkable”, I would not be surprised if the Hamilton County Commissioners attempt to sell the Hamilton County-owned parking garages at The Banks in 2012.

    Whether this is the right approach or not, what I am suggesting is that those funds be leveraged for economic development purposes elsewhere in the central business district. As of now, Hamilton County’s administrative offices and courthouse are surrounded by underperforming surface parking lots that sit immediately on phase one of the Cincinnati Streetcar route.

    While 3CDC may seem like the logical choice, Hamilton County is really looking for a way to empower the Port Authority. I’m not sure how they intend to do this without continuously providing a massive line item in the county budget, but activities such as what I proposed here might be a way to bolster the economic development organization.

  • Nathan Strieter

    The Banks garages are likely to become privatized whether or not the City wants them to or not. And despite voiced concerns about privatization of this infrastructural piece, the County seems to have made up their mind on the matter.
    As for the timing it isn’t like the garage’s structure is going to fail in the next few years (at least 3 decades). But to address some of the points made above the county does not own the city land on top of the garages, so the suggestion that the park or any of the land in the Banks neighborhood would be somehow separately privatized is incorrect. Also the main flooding overflow tanks are a part of the transit center complex and would/could not be included in a sale (*The term sale is used to describe what would actually be an extended lease & management agreement between the county/port authority and the private company. The terms of such leases can be structured to include infrastructural/maintenance reviews by the County/PA and could be terminated immediately upon negligence to the leased property. Such deals are not uncommon in cities like New York where the 99 year lease of the WTC among other properties comes to mind.)

    What the article is suggesting is that we should think so as to take a seeming inevitability and turn it into a win. Thinking this way could ensure the future viability of the newly empowered Port Authority. While a straight “swap” might appear challenging but a two stage or “inevitable” swap might be able to be achieved. Involving the owners of the current lots into the negotiations for partial ownership of The Banks garage could actually act to lubricate the transition of the sites. In effect it would be a sale/lease and then a purchase, but the process would be approached in a way that expedited the second transaction considering it a foregone conclusion.

    To put it in fun terms:
    Such a “trade” or lease and sale… would be like swapping North Carolina Ave and Pacific Ave for a monopoly from Virginia Ave to St Charles place. It is a good trade for the parking people and it would seem a loss for the city because they collect less on the individual properties directly BUT and here is the kicker. The Port Authority has money to leverage those sites and their air rights. Like in the game of Monopoly this could rake in cash, as it creates new residential and commercial tax flows for the City & County.

    IMO this is the type of thinking that needs to be encouraged on a regional level.

  • Jord

    I did not mean to sound like a naysayer on the plan. It would obviously be great to reduce and consolidate parking facilities in the city. The Banks garage is a perfect spot for this, being an underground facility, at the periphery of downtown, at the end of the streetcar loop, etc. — perfect location.

    I said “maybe it can be worked out,” and putting terms in a lease of the garage making sure the lessees comply with the needs of the city/county could well be a way of solving the problems I outlined. Maybe if Randy had used the term “lease”, the problems would not have appeared so insurmountable.

    The plan, as articulated by Nathan Strieter, does sound appealing. Perhaps enough so that the county would consider it, as it seems a much smoother operation than finding a way to leverage the cash into a new subdivision in Green Township. (After all, current downtown parking facilities operators would seem a natural fit for taking over the new garage.) I wouldn’t put it past the commissioners to figure the subdivision scheme out, however (or something like it).

  • @Randy and Nathan: Great points. Makes it seem much for feasible.

    I guess I still have ideological issues with the county handling development at the neighborhood scale. Maybe the Port Authority should use its power to enable neighborhood development groups to get off the ground? No group has anywhere near the support 3CDC does, and I’m sure the Port Authority could play a major role in changing that.

  • Zachary Schunn

    FYI Randy: I am working with the owner of several parcels (0.52 AC) at the Court & Walnut site. He is very, very interested in a sale. I will keep your (and others’) comments in mind, and am optimistic given the slew of announced development downtown that developers will be interested in the site… likely for a mid-rise residential tower as you suggested.

    Oh, and I’m sure you know this, but be careful using the auditor’s “values” as market values. Their algorithm is rarely as accurate of some comps research or a cash flow model. It is nearly every day I am baffled by the auditor’s tax “values.”