Parking garage or parking lot?
When I moved my family to Southern California in 2005, we spent a lot of time at Disneyland, with a couple of side trips to Universal Studios Hollywood. At both locations, we always parked in very large, clean, and well lit parking structures. When we moved next to Six Flags Magic Mountain, we started spending lots of time there and parking in their giant asphalt parking lot. After a couple of very long walks from the car to the tram pickup, or worse, all the way to the main gate, I started to wonder why they didn’t have a parking garage like everyone else. After doing a little research, I soon discovered that Disney and Universal Studios were the exceptions and that everyone else actually uses parking lots. I had just gotten spoiled.
I know parking garages cost a lot more money than a parking lot, but the advantages seem to outweigh the disadvantages, at least in my mind. A parking garage takes up less real estate, freeing up more land for new attractions. A garage is easier to secure, patrol, clean, and provides increased protection for guest’s cars. And lastly, a garage is more convenient for guests, typically providing a shorter walk to a single tram pickup area. Overall, most people feel that parking garage is a much better experience than a massive parking lot.
When I found out how much parking garages cost to build, my jaw hit the ground. A flat, asphalt parking lot can cost anywhere from $1,500-4,000 per space to install from scratch. For a lot that holds 5,000 cars, like my local park, that’s around $10M, give or take a few million. This explains why you see some lots that are not paved, but rather a fine gravel. An above-ground, free-standing parking garage costs anywhere from $15,000-40,000 per stall to build. For 5,000 cars, you’r talking a whopping $75M, minimum!
At first, I immediately dismissed the idea of these parks ever putting in garages at those prices. However, when I started to pencil it out, it wasn’t that outrageous. My local Six Flags has roughly 5,000 parking spaces and it’s open year-round, which equates to 220 days for 2011, based on their published operating calendar. The lot is almost always full during the regular season and usually about half-full during the off-season days that they are open. Being conservative, I’m going to say they average 2,500 cars per day for the entire year. After talking to several of the folks that work the toll booths, a very un-scientific method for sure, it appears that roughly 75% of the people pay for daily parking and the rest use parking passes. Again, being conservative, I’m going to say that 50% of the guests pay the daily fee. At $15 per car, which is what they currently charge, this is what it looks like:
x .5 1/2 Pay Cash
1,250 cash Cars/Day
x $15 Daily Parking Fee
$18,750 Daily Cash Intake
x 220 Days Open/Year
= $4.125M Annual Cash Intake
Keep in mind that I’m being very conservative on these numbers, so the actual intake is likely much higher. I also didn’t count the revenue from the season parking passes or the uplift for busses and RVs, so that will take it even higher.
I know absolutely nothing about commercial construction financing, but I can’t imagine that you wouldn’t be able to finance a $75M project over 20 years. Servicing that debt would run $3.75M per year, plus taxes and insurance. There would also be some maintenance costs thrown in each year as well, but the money they charge for parking appears to be more than enough to cover it. If they raise their parking fees to $20 per day, like they already have at a couple of other parks, they would be taking in at least $5.5M per year.
They don’t disclose it in their annual reports, but I’m sure the money they make on parking goes to subsidize other programs. There is no way they are spending over $4M per year on maintaining their existing parking lot. Even the trams they use are original to the park, from 1971, so there’s not much of an expense there. I don’t mind paying a bit more for parking as long as I’m getting to park in a nice facility. Paying $15 to park in a large lot, far away from a tram stop, walking through deep puddles when it rains, only to get on an old, rough tram is not a good deal for me. However, I’d gladly pay $20 to park in a clean, well lit parking garage.
Let’s hear from you. Would you rather park in a large parking lot or a nice parking garage? Would you be willing to pay a few bucks more to park in a nicer garage? Other than the cost, what are some of the downsides to building a garage?