City parking ramp at Walker Art Gallery a loser for taxpayers

  • Article by: MAYA RAO , Star Tribune
  • Updated: September 2, 2014 - 2:42 PM

After a decade, the ramp at Walker Art Center is not meeting projections.

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A rare crowded time in the parking garage was in 2013, when people at the Rock the Garden concert listened to the first act there because of rain.

Photo: Anna Reed, Special To The Star Tribune

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A decade after opening, a $25 million parking ramp at Walker Art Center is a money loser for Minneapolis.

City leaders promised that taking on debt for the 675-stall underground garage would be worth it, based on projections showing that the expanded Walker would experience a surge in visitors. They said the garage would turn a profit of close to $100,000 a year even after the Guthrie Theater moved to the riverfront.

Instead, records show, the structure lost that much last year alone — and more than $3.6 million total.

“It just seemed from our experience, the number of parking spaces they had was totally out of line with what we felt the demand was,” said Don Siggelkow, a former longtime administrator for the Minneapolis Park and Recreation Board who questioned the deal at the time. The park system owns a nearby parking lot that competes with the Walker ramp.

“The demand they were forecasting was unrealistic,” he said.

Whether the city, which has owned parking ramps since the 1970s, should be in the business at all was once a long-running debate.

Minneapolis continued building parking facilities to support new development in the 1990s, only to have the economy slide. By 2007, the city sold a handful of poorly performing ramps for $65 million after its parking fund sunk into the red. An agreement the city had with the Walker made it more difficult to sell that ramp with the others, according to a former city official.

Minneapolis’ network of 13 parking ramps is profitable overall, making more than $10 million in the last three years. That money pays not only for parking ramp upkeep but is also used to cover other city expenses. Minneapolis also has a surface parking lot and runs four other ramps that it does not own.

The only other troubled city parking ramp is at the federal courthouse downtown. It lost $789,201 in the last three years, but officials say the shortfall is largely due to the public overlooking its obscure location. Minneapolis’ parking chief said the ramp is finally full after a recent change to have city employees park there instead of at the highly profitable Haaf ramp.

City traffic and parking services director Jon Wertjes compared the Walker ramp’s position to that of a store where not everything on the shelves makes money: Some products do, some don’t, and there’s “that balancing aspect going on.”

Yet the lack of success at the Walker’s garage, on which Minneapolis still owes more than $20 million, has not presented any clear solution.

“We wish more people would park with us, but they don’t seem to do that,” Wertjes said.

In 2001, the Walker lobbied the city to pay for parking to accommodate what would be a $90 million expansion. The ramp opened in December 2003, more than a year ahead of the refurbished art museum, providing parking not only for patrons of the Guthrie Theater, but also the nearby churches, the Sculpture Garden and community events.

A study commissioned by the Walker from SRF, a Minneapolis consulting group, projected that the parking facility would turn a profit of nearly $700,000 in its first year, almost six times more than the Park Board’s 350-space lot at nearby Parade Stadium. After the Guthrie’s move in 2005, the report predicted, profits would sink to about $100,000 but then rise throughout the bonds’ 25-year term.

The first year it opened, the ramp lost $583,667, with losses ballooning to more than $800,000 during the first two years of the recession. Since then, losses have gradually diminished, but the ramp has never been profitable. Wertjes noted that since 2009, expenses have stayed about flat while the parking fees coming in have increased.

“I think pretty quickly after it opened, it became clear to the city that the forecast was not likely to have been met,” said Patrick Born, who championed the project at the time as the city’s finance officer.

‘Only in hindsight’

“The Walker is a vibrant part of Minneapolis and having adequate parking in that location is important,” said Born, now regional administrator for the Met Council. “Only in hindsight can you say that the ramp was oversized given the market. And in hindsight, it would have been better to build a smaller ramp.”

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