Here’s one piece of Boise real estate whose price hasn’t gone up: 207 underground parking spaces beneath The Grove Hotel in Downtown Boise. In fact, the Capitol and Front garage’s asking price has gone down.
Capital City Development Corp., Boise’s urban renewal agency and the garage’s owner, put the garage up for sale this spring, asking $6.8 million. But even as prices for housing soared, CCDC couldn’t get an offer. So the agency lowered the price this summer to $5.3 million. Still, no bids.
Now CCDC is negotiating directly with potential buyers, Executive Director John Brunelle said. He wouldn’t name them. The price range they’re discussing is “well over half” the last asking price, Brunelle said.
Accessibility is a major reason CCDC wants to sell the garage, Brunelle said.
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“Unlike other parking garages in our system, it’s not as user-friendly to the general public,” he said.
Also, “the intent right now, at least by conversation, is that we would help facilitate the success of the new library by putting this money toward a parking structure,” Brunelle said.
The city hopes to build a new main library in the next three years. It is working with a developer to buy parking levels in a new building proposed for the northeast corner of River and Eighth streets, across from the library.
The 20-year-old Capitol and Front garage, formerly known as Boulevard Garage, is the worst performer of seven owned by CCDC, said Max Clark, the agency’s director of parking and mobility. During peak hours — 10 a.m. to 2 p.m. on weekdays — it averages 30 percent occupancy, Clark said. The most popular garage, Capitol Terrace, averages 78 percent occupancy during the same periods.
In August, about 2,000 drivers without monthly passes parked in Capitol and Front. That number was 10 times as much in Capitol Terrace, Clark said.
The agency’s difficulty selling it is no reason to doubt demand for places to stash cars in Downtown Boise, Brunelle said.
That’s despite the cost of covered parking — about $25,000 per space — and predictions that the rise of driverless cars, combined with increased reliance on walking, biking and public transportation, will someday render garages irrelevant.
“There’s no question that the parking is necessary — in fact, critical — for the success of Downtown enterprise,” Brunelle said. “The reality is that structured parking is the most efficient.”
Clay Carley agreed. Carley, a longtime Downtown developer who helped turn historic buildings around 6th and Main streets into a business center called Old Boise, plans to build a hotel with a parking garage on the north side of Front Street between 5th and 6th streets.
Parking profitability is based on the same fundamentals as any property type, Carley said.
“If you have a great location, and you can manage your costs based on your revenues, and the customer has a good experience, you’re going to succeed,” he said.
So does Carley have any interest in buying the Capitol and Front garage? No, he said, because it doesn’t check his boxes for successful real estate investment. He said the entrance to the underground structure is too hard for people to find and has a bad layout.
Clark said many drivers avoid Capitol and Front because they don’t like parking underground or they assume it is reserved for hotel guests.
Carley said the garage would work best as a private asset to The Grove Hotel above it.
CCDC bought the garage in 1998 for $5.3 million — the cost of its construction, Brunelle said. Selling it wouldn’t be a first.
In 2007, CCDC sold the garage under the Wells Fargo building northwest of The Grove to Oppenheimer Development Corp., the building’s owner, for $2.4 million, Brunelle said. The agency bought the structure in 1989 for $2.65 million as part of a development agreement that outlined terms for construction of the Wells Fargo building and included a formula to determine the garage’s price, he said.