Big Bucks and Blacktops

Parking lots are not a very sexy business--especially when they're of the ugly, downtown variety. Despite what downtown boosters and local media say, proposed regulations to "beautify" those lots won't help--as long as landowners think they're going to hi

D Magazine , October 2006

Michael Anderson is a monomaniacal downtown booster. He serves on the Inside the Loop Committee. He heads a task force on the homeless. He decorates his office with large, nostalgic photos of downtown in the 1940s. He even does his shopping downtown, boycotting Home Depot's gardening department in favor of the Farmers Market.

As general counsel for Chavez Properties, Anderson has been buying downtown real estate since the mid-1980s. The company is now the largest private landowner in downtown, with 26 acres waiting for the right deals to come along. When the Adam's Mark needed space for a ballroom, when the city wanted to expand the Dallas World Aquarium, and when Chase Tower decided to add a parking garage, they all turned to Chavez Properties for land.

While waiting for its land to appreciate--a wait that can easily run a decade--the company earns a steady return using the property as parking lots, under the Star Parking name. (It runs lots and garages for other owners as well.) So Anderson, it turns out, is not only a downtown booster. He's also a parking lot magnate--which, he admits, "is not a very sexy business."

Nor is it popular with Dallas opinion leaders. The Powers That Be consider parking lots blights on the grandeur that could be downtown Dallas. The Dallas Morning News has opined that street-side parking would be preferable, because drivers struggling to parallel park or back out of slant parking would slow traffic (as if driving in downtown weren't confusing and stressful enough). The Inside the Loop Committee and the Central Dallas Association want a new ordinance to require fences (wrought iron and at least 42 inches high) and landscaping on all surface lots. And they want to prohibit new lots altogether.

Dallas needs more parking lot regulation, says CDA head Larry Fonts. "We're confronted with the situation where we have some very good lots indeed, some not-so-good lots, and some that are very, very ugly."

Michael Anderson hates the ugly parking lots. But he hates the idea of new regulations more. "I don't like to be pulled by a choker chain by somebody who doesn't know what they're doing," Anderson says.

To make his point, he takes me on a tour of some of downtown's ugliest, most pothole-ridden lots, including one 50-cent lot whose highlight is a battered Coke machine wrapped in a rusty chain. The asphalt of another lot has crumbled into the sidewalk, leaving a giant bite of missing blacktop. "Idn't this great?" Anderson says sarcastically, his accent making him sound like Ross Perot. "It's just gross."

We don't dare enter the lot at Main and Field streets because the potholes are so huge. Overhead wires are everywhere, the signs clash with each other, and, to complete the eyesore, there's a long-closed Bo's Chicken Shack in the corner. "You know that show Extreme Makeover?" Anderson says. "You've got the poster child for 'before.'"

Star Parking lots, by contrast, aren't so bad--buried power lines, attractive lighting, good drainage, smooth pavement, brightly painted numbers--and they're getting better. Anderson is planting trees and bushes in the dead corners of his lots and, in some cases, around the perimeters. He spent $20,000 to fence and landscape the 168-space lot at old Griffin Street and McKinney Avenue. Each corner features an array of colorful plants, including yuccas and Chinese pistachios, and the landscaping continues along the sidewalks next to the two main streets.

"I know that nobody's going to say, 'I come downtown so I can park on Michael Anderson's real clean lots,'" he admits. But he hopes that over time, better parking lots will make coming downtown more pleasant and, in turn, raise the value of Chavez Properties' land.

Mandates, however, won't work. Requiring specific, expensive improvements for every downtown parking lot--even those that might be soon sold--ignores the realities of the market. If parking lot owners have to spend more on their properties, they'll try to pass along the cost to customers.

Parking is as sensitive to changes in supply and demand as any economist's blackboard diagram. For instance, Anderson says, when SBC turned a downtown garage into employee parking, taking 250 spaces off the public market, parking rates shot up by a third in adjacent blocks. "Even modest tweaks in the marketplace are like dropping bowling balls in the bathtub," he says.

If parking rates go up, commercial rents will have to go down. Dallas has plenty of alternatives to downtown. The real estate market, including that for tiny plots called parking spaces, tells us something through its prices: people value visiting or working downtown only so much, and not a penny more.

I suspect, in fact, that downtown has so many parking lots because its boosters overestimate the value of downtown land and because they constantly concoct grand improvement plans that crowd out immediate, smaller-scale commercial investment.

Land in central Dallas sells for $50 to $100 a square foot, compared to $25 to $30 in the suburbs and no more than $50 in the booming neighborhoods north of downtown, says real estate appraiser Chuck Dannis, president of Crosson Dannis. Many downtown landowners are hoping the real estate bubble of the early 1980s will re-inflate. "People are waiting for the $300 per square foot to come back," Dannis says.

Feeding those hopes, the city's downtown improvement schemes often involve lucrative land deals. Because there's always a new scheme afoot, property owners are encouraged to wait for a windfall. Anderson himself hopes to cash in on plans for a subsidized convention center hotel. Chavez Properties owns most of the logical sites.

Anderson, of course, would never say downtown land is going undeveloped because owners are holding out for too much money. Nor would he admit that he sometimes prefers to ignore market signals. He has a different, equally valid objection to the parking lot regulations: they disregard all the hard-won knowledge that distinguishes parking lot professionals from bureaucratic amateurs. Landscaping parking lots isn't as easy (or as cheap) as would-be regulators seem to think. A one-size-fits-all solution is no solution at all.

Editorialists and planners act as if passing a law is the same as fixing a problem. But enduring progress occurs incrementally, through trial and error. "I'm taking [things] little by little, bite-size," Anderson says of his aesthetic improvements. That way, he spends his cash slowly and, more important, has a chance to learn from experience.

Take fences. Would-be regulators like them tall and painted. That does indeed look attractive--at least at first. But if a fence is too high or opaque, it can turn a lot into a crime zone. And many fences that look good new, including the wrought-iron models favored by the proposed code, can't take the bumps that a certain sort of Texas driver tends to inflict.

"Sometimes you get the nice, new Mercedes, where the guy comes and parks it just right. Other times, you end up with a double pickup with a big old hitch that will just wreak havoc," Anderson says. He points to a huge truck: "You can't be dainty with him."

To look good over the long term, fences have to be durable and replaceable. Star Parking went through about 20 different kinds of fencing before finding a system that strings heavy-duty wire between springs. The fence is unobtrusive. It bounces back from most encounters with Suburbans, and, if necessary, a damaged section can be replaced without taking down the entire structure.

Most irritating to Anderson, downtown's "very, very ugly" lots don't meet the code that's already on the books. Under current law, parking operators are required to have good lighting, smooth pavement, and clear lines and numbers. Instead of forcing new rules on responsible operators, he argues, the city ought to enforce existing laws. And it ought to start with the lots it owns.

Consider the lot with the broken-down Coke machine. Anderson says he sold it to the city in 1985 for the widening of Routh Street. He got $107 a square foot for land he'd bought five years earlier at $20--one of those windfalls that encourage downtown property owners to dream big. Eighteen years later, the land is still a parking lot, owned by the city and growing uglier by the day.

The proposed parking code is the typical political "solution," a grand gesture that ignores nitty-gritty operational details and assumes distant authorities know more than the people who deal with the problem every day. In a city that supposedly believes in free markets, it's another example of how little the Powers That Be actually appreciate what the market does: tap the dispersed knowledge, gained through experience, of specialized entrepreneurs like Anderson.

Remember that ugly old Chicken Shack? Shortly after our tour, Chavez Properties won a contract to operate the parking lot, and one of the first things Anderson did was spend $4,000 to tear down the dilapidated building. Downtown is now a little less blighted. But tearing down the defunct restaurant would be illegal under the proposed code, because that ordinance would ban demolitions that create additional parking spaces.

Regulations, by their very nature, miss the nuances. To be fair, they can't make exceptions. So they wind up being stupid.