Wednesday, August 1, 2012

$7 billion for parking in Washington?

Matthew Yglesias wrote about the logic behind the new seven billion dollar remodeling of Washington Union Station and it's a bit puzzling.

First, of course, I should note that my earlier complaints about the Amtrak design were misguided on the basis of the Washington Post article. It isn't $7 billion for six new underground high speed rail tracks, it's $7 billion for no tracks, but rather widened platforms, some increased retail space, and a larger underground garage.

Reading through his article, it seems that most of the remodeling expense is due to the fact that, in order to widen the tracks before air rights development removes the potential for it, they'll need to get rid of the parking garage overhead. So far, so good, but then they decide to rebuild it, with significantly more spaces, underground and, since they're tunneling anyhow, create a few underground concourses and an "iconic" train shed.

What I'm missing is the purpose of rebuilding the garage underground and making it bigger in the process. There are outdoor parking lots within a reasonable proximity to Union Station; could they not have simply purchased one and built a parking garage with shuttle service to Union Station if retention of parking was needed? For that matter, given the costs of building sufficient underground parking in this particular location, why could they not have simply announced that they would do without their own parking and that the free market would provide whatever parking was required? At once, you achieve a bipartisan union that man previously not even dared to dream of: the support of both hipsters and Tea Partiers; the former for lack of parking and the latter for a prevention of government waste and increased reliance on the free market. If nothing else, it would have been worth it simply for the popcorn.

That said, the actual cost of the underground parking shouldn't be a major factor in the total price of the structure. Underground parking is only about $40,000 per spot, on its own that should only represent about $200 million or so. But the perceived necessity of providing underground parking was likely the lynchpin for scope creep which led to a ballooning cost. In a similar fashion, decades ago nuclear power for US Navy surface combatants often led to various other upgrades in design thanks to the capabilities, larger hulls, and higher prior cost associated with nuclear reactors. It made nothing but rational sense for a nuclear powered hull to have the most powerful radars it could mount, even if a lesser sized radar could do the same job and would be programmed for conventionally powered versions of the design. Just so, it makes nothing but rational sense to tunnel out an even larger area for underground concourses while you're already tunneling and to replace the train shed with something hideously ugly: The problem, as we appear to see, is that it results in a gross inflation of total costs and puts the program at risk.

1 comment:

  1. Part of the problem is that while there are other lots in DC, they're more or less already allocated to "other uses". For example, a number of buildings have parking...that is used by their workers. Further out, there's plenty of parking at Metro stations...but virtually none of that is "parkable" for more than a day or so. Ditto mall spaces (Crystal City, for example). This basically leaves Washington National (and potentially Dulles once the Metro gets there, though that's a /long/ commute into town) as options.

    Union Station needs parking, and indeed it probably needs additional parking if there's going to be a major expansion (to say nothing of longer-term ridership projections on the NEC, which seem to be trending up steadily, as well as the potential for a boost if additional routes/corridors keep growing to the south). However, I'm definitely open to hearing criticism of how this might be handled.

    One other point: For every space filled at $22/day (the going rate at last check) on each day of the year, you have $8030 in revenue from that space. Thus, if an average of 1000 spaces are filled, that's $8.03 million in revenue; at 2500 spaces, that's $20.08 million/year. Knowing DC, I think 50% average occupancy would be pretty low. Moreover, the fee schedule means that it is /very/ possible for the station to turn over substantially more on parking for part of a workday, meaning that they can hope to bring in money from other businesses.

    It seems likely that the parking lot will be a major boon, as odd as it sounds...it could easily turn into a cash machine for the station generating $25-30 million per year in 2012 dollars, particularly if parking fees rise faster than inflation.

    As to the rest of the project...well, I think the more important question is who pays for it. If Akridge kicks in a good bit (either in cash or in securing financing) since it is their air rights project driving this, and if some more can be secured with those likely parking revenues, this probably won't be as much of an immediate financial hit to Amtrak et al as it sounds like.

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