On the Record: Parking on (realized) potential
The potential for parking lots, Hy-Vee and Gateway Market, Justin Bieber and business leasing from the Beatles
Friday, February 21, 2014 7:00 AM
Parking on (realized) potential
The flurry of development activity in Des Moines, particularly the proposals for the 2.3 acres of parking right beside our building at 420 Court Ave., has me reading an old story by the late Jim Pollock, former Business Record editor. The story, actually the last one he wrote before passing away in April 2012, took a look at what he described as “vast surface parking lots surrounding the core like a besieging army.” To write like Jim, right?
At any rate, the story focused on what the city of Des Moines and businesses that owned surface parking lots planned to do with all that prime downtown real estate. For the city, he said, it’s simple: Turning surface parking lots into a building pays off in property taxes - eventually.
Jim used the property where the Vine Street Lofts development now sits as an example of what the city stood to gain. In 2000, the city was collecting less than $6,000 in annual property taxes for what at the time was a parking lot. With Vine Street Lofts in place, the building was valued at $8.4 million in 2012 when the story was written.
Jim wrote that when the project’s property tax abatement expires at the end of 2014, and, assuming current commercial property tax rates, the property owners - Sherman Associates Inc. of Minneapolis - will start paying $395,000 per year. Obviously, tax rates have changed, but the point is well taken.
I know we’ll be curious to see what types of incentives will be given for the project at 420 Court and what amount of tax revenue the city expects to make - eventually of course.
Jim’s story was before this current downtown development upturn, but I think he identified key areas to watch for potential developments into the future. In fact Matt Anderson, Des Moines assistant city manager, said in the story that redeveloping parking lots was the “low-hanging fruit,” but he cautioned that we’re not exactly back to boom times, and “the future uses of parking lots will be market-driven.”
The final paragraphs of Jim’s story I think are telling of what’s to come.
Jim wrote that “someday, if Central Iowa continues to attract residents and companies, the balance could shift. ‘We truly have a lot of land that can be developed,’ Glenn Lyons said. ‘I’d say every other block could be redeveloped. I think we’re going to get infill, but the way the market is now, we’re not seeing a lot of development anywhere. When the market changes, and the vacant (office) spaces have gone away, then builders can get serious about filling in parking lots.’”
Go to here, to see a map of downtown parking and read the full story, which also included thoughts on the reasons businesses are holding their surface parking lots for future flexibility.
So, in the future where do we park?
I’m sure the issue of having adequate parking will be solved if the “besieging army” of surface lots is conquered by developments. But, there was a prevalent concern about parking that we heard over and over in the responses to our survey on the development at 420 Court. The developers each had parking figured into their plans in some fashion, but how much and whether it was public or not was definitely a concern expressed by respondents. Nothing quite riles up the public like a perceived lack of parking. That’s something I’d keep in mind if I were proposing a development downtown. See the survey results here.
Gateway Market’s future
I also can’t help to wonder what the proposed downtown Hy-Vee Inc. store would mean for the health of Gateway Market. Specifically, I remember a quote from Gateway Market founder Paul Rottenberg in a 2012 Business Record story (bit.ly/1j4ZjhQ) looking at the impact of Whole Foods Market Inc. on the grocery industry. In that article he said that Gateway was seeing a decline in sales because of Whole Foods, but he believed Gateway would be fine at the point because the population had reached a point that it could absorb more retailers. But, he cautioned, “It would be a different conversation entirely if Whole Foods was down the street.” Hy-Vee isn’t Whole Foods, but it has expanded its speciality selections and it could be right down the street. Rottenberg told The Des Moines Register he was “surprised” to see Hy-Vee propose a store that large. We’ll check in with Rottenberg here soon to get his full thoughts. Me, personally... I live right next to Gateway Market. My wife and I frequently use it as a midweek supplement to our major grocery shopping trips to the Hy-Vee on Fleur Drive. I’d guess, our spending at Gateway won’t change.
The music record
Whisper words of (business) wisdom
I was on a nice long Sunday drive back from snowboarding at Chestnut Mountain in Galena, Ill., and I happened to stumble on to a nice musical treat. The radio station, in honor of the 50th anniversary of the Beatles’ appearance on “The Ed Sullivan Show,” was playing the top 40 Beatles songs of all time. I can’t say I was alive during Beatlemania, and though I’m a fan, I’m far from a hardcore follower. I will say that beyond the music helping me to hate Justin Bieber even more, I couldn’t help marveling at the way the Beatles have transcended half a century. I started thinking about what businesses could learn from the Beatles, promptly came up with a dozen or so great lessons for a book, was all set to write, then decided I better Google “business lessons from the Beatles.” Turns out I’m a few years late. The book “Come Together: Business Lessons from the Beatles” was written back in 2011. Check out this New York Times article that has a few examples of the 100 business lessons from the Beatles. Guess I’ll just have to let it be.
The threat of agriculture espionage
I recently had the opportunity to meet with Dean Cheng, a senior research fellow at The Heritage Foundation’s Asian Studies Center, and a small group of business leaders for a conversation about doing business in China. Cheng, who was in town from Washington, D.C., to speak at an event for the Des Moines Committee on Foreign Relations, provided some tips and words of caution for those curious about doing business in China. It was a fascinating conversation but my general takeaway was there is money to be made there, but you need to be wary of some very real pitfalls. DuPont Pioneer has been a target of espionage - the Chinese man responsible for stealing patented seeds appeared in federal court earlier this month - and according to a New York Times article, “the agriculture sector is becoming a greater target, something that industry analysts fear could hurt the competitive advantage of farmers and big agriculture alike.” I hope to bring this topic around in a future article with some of Cheng’s advice for what we know is a growing interest in Iowa. Alas, not enough room this week.
So you think you are one in a million?
During my chat with Cheng, there was a moment of levity when he quipped, “If you are 1 in a million, there are 1,300 of you in China.” My immediate thought? Dear God, there are 1,300 Justin Biebers running around China - now that’s something to be truly wary of.
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