Opinion: Another perspective on church parking structure

By John Thomas

If a parking structure is to be built, build it on city-owned land. This makes far more financial sense than what the City Council seems to have agreed to: paying to build it, paying rent for 53 years, and eventually giving the parking structure to the property owners. In the face of that overwhelming financial logic, the City Council puzzled a lot of people when it voted to continue to investigate a proposal to build a parking structure on land leased from the Presbyterian Church.

Whether to build a parking structure is a different issue. The issue here is only whether it is in the community’s best interest for the people elected to represent the residents of Laguna Beach spend nearly twice as much to build a parking structure on land leased from someone else when the City owns ample land that is at least as suitable for a parking structure as the site in question.

Plus, under the terms of the proposed lease, after the City pays off the millions it would borrow to build the structure, at the end of the 53-year lease, the structure is given free and clear to the church. Spend millions, end up with nothing at the end. That’s baffling.

You can walk a block or two down the street and build the identical 92 space structure on city land next to City Hall, get the same public benefit, in a better location, for half the price, and keep the structure for continued public benefit forever.

How is paying twice as much for what is virtually the exact same structure prudent management of public funds?

If the City builds on the church site, at the end of the lease, the city has spent $22,393,004 and owns nothing. That’s $243,000 per space. On city-owned land there is no lease, there is no rent, the city spends half as much—$11,750,500—and owns the structure forever.

Because of land rent, the same structure costs twice as much on the leased land as it would on city-owned land.

It looks like the City has invented the “one-for-two” sale. In the more common two-for-one sale, a buyer gets two for the price of one. In this case, a “one-for-two sale”, the City gets one parking structure for the price of two. This is, in many ways, backward thinking. And it’s our residents’ money being spent.

According to staff, the project will lose money immediately, and by the end of year 12 will have accumulated over $3.7 million of losses. It will take 30 years for the project to recover its investment.

If the purpose is to help the church, the City may be able to help the church with tax-exempt financing without costing the citizens of Laguna Beach millions of dollars. This is not about whether the church can build a parking structure. The church could do that without the proposed city subsidies.

And remember, after eight years of work, the City just adopted the updated Downtown Specific Plan, that actually reduced the amount of parking that is required of commercial developers—who should be the ones providing the parking to mitigate the impacts of their developments—because the consultants told the City that it already has more than enough parking in the downtown. How can we reconcile a decision to pursue the construction of a parking structure just weeks after adopting a plan based on having more than enough parking available?

Rather than waste staff time and taxpayers’ money to further investigate this, why not spend the funds this would cost on the neighborhoods where it is needed?

In 2017, a City Council subcommittee agreed there is an imbalance between the amount of revenue the City receives from visitors and the additional costs the City incurs due to those visitors. The shortage was estimated to exceed $20 million per year. Other than the Church, who will benefit most from the proposed parking structure? The next largest beneficiaries are visitors and the downtown businesses that cater to those visitors. And until the City figures out how to correct that visitor cost-revenue imbalance, the losses incurred on this project will simply further add to the huge amount that residents subsidize visitor costs.

With losses like this, what important city services do the residents of Laguna Beach want cut back to make up the shortage: police, fire, or public works? And don’t buy the argument that parking revenue is just for parking. Parking revenue is one of three meaningful sources of revenue from visitors and the City regularly transfers parking revenue to the General Fund to cover some of those costs.

The choices are: 1. build on church land, pay $22,393,004, own nothing at the end; 2. build on city-owned land, pay $11,750,500, no lease, no rent, own the structure forever; or 3. believe the consultants that we have more than enough parking downtown and “just say no.” There are better ways to use those public funds.

John is a board member of the South Laguna Civic Association and Laguna Beach Audit Review & Measure LL Oversight Committee.