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Thursday, May 17, 2012
Special Report: May 2006
The Commute Debate
Tenants want parking; planners want fewer employees to drive to work
Story by Karen Dera
Few who punch the clock every day would deny that traffic and parking in the Capital Region need immediate attention. Congested roads and highways make for longer commutes and more auto accidents. Parking challenges include the stress of finding a parking spot, rushing to fill a meter, and discovering another ding on our car doors.
Nonetheless, commercial office leasing brokers say parking and transportation are not a priority for most tenants when negotiating a deal. But that may change.
Traffic congestion is a growing problem with consequences beyond disgruntled employees. The Environmental Protection Agency has listed Sacramento as the fifth worst city in the United States for air quality, which not only affects the health of Sacramento’s residents, but also puts millions of dollars in federal transportation funds at risk.
“We’ve got to be thinking about these things now,” says Paul Schmidt, executive director of the Capitol Area Development Authority and a proponent of transportation-management plans for the region. “Experts agree that we will run out of oil by 2030.”
What does that have to do with tenants looking for office space? “It’s absolutely prudent for an individual employer or tenant to advocate for its parking and transportation needs, but that employer or tenant needs to understand it is part of a larger community,” says Rebecca Garrison, executive director of the 50 Corridor Transportation Management Association.
“And that larger community has to concern itself with the greater issue of mobility,” Garrison continues. “It doesn’t do any good for an employer to have a parking space for each employee if the employee has to endure unbearable traffic congestion to get to that parking space.”
When relocation is considered, it’s management that makes decisions, not support staff. Garrison says managers may not be able to conceive of conducting business without cars at their disposal because they need their cars to meet clients and attend meetings, and because they cannot carpool due to late nights at the office. Garrison says these people are the exception.
“It’s my experience that at least 50 percent of the workforces would love to save time and money on their commute,” says Garrison. “If we could focus on that 50 percent and make alternative commutes work for them — whether it is telecommuting, carpooling, using regional transit or cycling — then we’d be well on our way to solving our transportation and air-quality problems.”
Some tenants have already implemented transportation-management plans in order to meet employee concerns.
Tom McCarthy, director of operations for the downtown Sacramento office of Downey Brand Attorneys LLP, helps to coordinate searches for office space and negotiate leases for the company, which has offices in downtown Sacramento, Roseville and Stockton.
“When looking for space, our first hope is that the landlord will have enough parking for all the employees,” says McCarthy. Downey Brand’s expectation is three parking spaces per 1,000 square feet of leased space. “When we can’t park everybody, it’s important to be near various other parking garages.”
Still, Downey Brand’s first consideration is being where they can best serve their clients. “We need to be near the courts and cannot stray too far away,” says McCarthy. “We also need to be near certain amenities that make us an attractive company. Recently, we decided to stay downtown, but it [parking] is always a part of the mix.”
With their Plaza Five Fifty Five lease up in a few years, Downey Brand has negotiated a new lease in David Taylor’s high-rise building at 621 Capitol Mall, which broke ground in March. “They will be able to meet our needs for parking,” says McCarthy, “but at some point, parking expense could become prohibitive, and it has become a consideration in previous site selections.”
Ten percent of Downey Brand employees turn in their parking cards in exchange for financial reimbursement from the company. Such benefits make sense in high-density areas, but are not on the mind of the average tenant.
“Ninety-five percent of the deals made do not make parking and transportation that big of an issue,” says John Frisch, a senior vice president with Cornish & Carey Commercial brokers. Frisch says top tenant concerns include a location’s convenience, image and prestige; then safety for employees; and then rent.
Yet transportation and parking is a priority for the Sacramento Area Council of Governments, which is collecting information from citizens via community meetings throughout the region. This information will help SACOG update the Metropolitan Transportation Plan (see story on page 40) required by the federal government.
“It doesn’t do any good to have a parking space for each employee
if the employee has to endure unbearable traffic congestion
to get to that parking space.”
— Rebecca Garrison, executive director,
50 Corridor Transportation
Management Association
SACOG is also educating the community about a new vision for the region that includes transportation nodes and density centers where people can live and work without getting in their cars.
Meanwhile, restless and rugged market forces are hollering for more roads, bridges and highways. “It’s the ‘ungreen,’ unpopular truth: What the public really wants is more lanes, more roads and more bridges to relieve traffic congestion,” says Frisch.
The market may solve the problem on its own. For example, Frisch says Cornish & Carey opened an office in Roseville because, “If our employees got tired of making the drive,” notes Frisch, “there are a lot of competitors in Roseville ready to hire a good broker.”
Frisch says zoning and development plans are contrary to market forces. “It’s impossible for my agents to conduct business without their cars.”
He believes commercial development in node areas will be hard to lease. “My personal feeling is that trying to force the market to do something it doesn’t want to do is risky,” he says.
But market unreadiness may have a price. “If we didn’t have to look at the bigger issue of desirability, we may be able to let the market forces dictate commercial development,” says Bill Swettenham, a senior vice president with CB Richard Ellis. “If we build bigger freeways, more lanes and more parking lots, the downtown areas would suffer and people would not want to live there; we need to find balance.”
Nonetheless, Swettenham acknowledges that tenants’ needs tend to supersede the bigger picture. “Whenever we list an office space in a building, one of the pieces of information that is needed is how many parking spaces does it have,” says Swettenham. “If there is not enough parking in the office location chosen, the company will not lease there.”
Garrison says tenants who need lots of parking should stick to suburban locations. “If a tenant absolutely has to have massive parking, then accept that it shouldn’t be looking for space near a light-rail station.”
Nor should such tenants be looking in Natomas. “Natomas is an example of an area that will lose companies looking for space to the suburban market,” says Swettenham, “but this was a conscious decision.”
Like several areas that could become transportation nodes, Natomas has formed a transportation-management association that encourages the use of public transportation and ride sharing.
Almost every project built in Natomas requires a transportation-management plan. The plan mandates that building owners demonstrate ways to reduce the number of cars coming to their building. Measures include enclosed bike lockers, showers, and incentives for tenants who develop vanpools or use public transportation.
Troy Estacio, a real estate-development manager for Buzz Oates Construction, is in charge of getting the company’s new developments through the entitlement process and mitigating transportation-management plans.
“There are competing interests,” says Estacio. “The city is trying to reduce the number of parking spaces, but the end-user tenant still wants to know that they will get X number of parking spaces. It’s a juggling act.”
Though building owners and leasing agents will need to think creatively to ensure parking and transportation satisfaction, tenants are invited to the table too. “Attitudes are changing, but unfortunately, we need almost everyone to be at the table to make the magic happen,” says Garrison. “It’s like a puzzle — every piece fits somewhere.”
Smooth operators
Parking companies are another piece of the puzzle in managing access to office buildings. “Sometimes, property managers will allow tenants to take more spaces than allotted without communicating that to the parking operator,” says Matt Griesheimer of Ace Parking, which managed a Capitol Mall garage for nine years and currently operates 35 garages in San Francisco.
“The parking operators need to be more aware of what’s going on with tenant leases so they can work closely with the property-management staff ... to efficiently manage parking,” says Griesheimer.
