Turn apt land into Parking Lot business, anyone?

Question

Dear BP community,

I welcome your constructive comments and suggestions to my crazy idea above.

Here is the background. My apt complex was burned down in a wildfire last year. I've been trying to rebuild it since Jan this year. However, the task just seems to overwhelming, esp. I'm remote (8 hours away) and have a full-time job.

So I came up with this genius idea as an interim solution. Maybe I can run it as a public parking lot for a while until I get comfortable on the learning curve and build a trustworthy network of local people who can do the jobs required (architect, engineer, GC, builders, etc.).

I figure that the parking lot business will take very small investment upfront and will generate some cash to cover annual property tax and then some. But I could be wrong.

Can anyone share some knowledge on how much to build the parking lot, automated payment collection (I saw a credit card machine in the middle of parking lot with solar panel on top of the pole), and cost to undo the parking lot and build back the apartments?

More details on the vacant land:

Location: A- minus location; three blocks away from the busiest street in downtown Gatlinburg; 10 minutes walk to the Space Needle, which is in the middle of Parkway. Over 10 million people visit the Smoky Mountain National Park each year and a lot of them will walk this main street.

Competition: Three public parking lots in between my land and the main street. They together host hundreds of cars and charge between $6-$10 a day. When I was there late March, two of them were full and one was half full. I can charge $5/day and hopefully get half full for the high seasons (Apr - Oct).

Capacity: My land is zoned R2, with a density of FAR 0.5. The total building area is around 9,000 SQF. Each parking space is about 162 SQF. So I can build 50 plus parking spaces if I use up all the 9,000 SQF. But I guess we need to build some spaces to allow cars to back up, etc. Let's say between 30-50 parking spaces in total.

Income: Assume $5/space/day, 30 spaces, 50% occupancy, 200 days rented, we are looking at $1,5000 annual income. This definitely covers property tax and insurance as well as minor repairs.

Cost: This is where I need help most. No idea how much it costs to get it ready, paint the stripes and install the solar powered credit card machine. I guess that's the bulk of the costs. Maybe later on, how much to get rid of the stuff and pour concrete for apt rebuild. Since I envision an automated operation so no labor costs for management here.

Regulation/permits: Need help as well. Do I need to change zoning from R2 to something else? How? Any special licenses/permits needed for a public parking lot business? Any special tax?

I look forward to your advice.

Josue Vargas · Answer

Special permits/taxes: This will depend highly on your local area. You need to contact the city for permits and an Storm Water Pollution Prevention Plan (known as a SWPPP) or something similar. Since your land to be disturbed is less than 0.5 acres, I don't think that the project need an extensive permit such as new construction or development, and maybe you can be just fine with a waiver... but obviously check this info for your area. Other local laws may be applicable.

Regarding the cost, is the land pretty much flat? Do you need to remove concrete or other old stuff from your previous property?

Ballpark cost regarding pavement itself (it depends on the design, your unique market, but for parking lots, assuming no big trucks or lots of scholar buses):

Compacted subgrade (at 95% compaction modified Proctor): $3/Suqare Yard

Aggregate base course: 6" @ $7/Square Yard

Asphalt: 3": $14/Square Yard

Pavement markings: $1.0 SF -- this usually runs on the lower $0.5 to 0.75/SF, but your project is so small, companies will charge you more. You maybe can negotiate less $ per SF, but pay them a mobilization cost.

This should cover for the overhead and profit of your contractor. My recommendation is to meet with GCs to have a better idea of what they really will charge you (after you provide them with a specific statement of work, with areas like 9,000 sqft of this type of pavement, and all the work required). Also, do a "Contractor's day", meet with three or four contractor at the same time, let them know that this is competitive, best offer/quality and verification of their work!!!

If its done with quality materials and quality workmanship, this material could be reused for the base of your new property (hint: do not disturbed the base layer as much as they can). Likely, the contractor will have some issues with the asphalt layer, but honestly, I've seen Starbucks constructed on asphalt parking lots.

Of course, demolition will cost you as well, so take that in mind, as much as $10 Square Yard, or maybe less if you find a contractor that can reuse the material on their won projects.

Note that this is ballpark numbers and will largely depend on your local markets ups-down and how busy the contractors are in your area.

This does not take in consideration the electrical utilities, mechanical, water, or stormwater!!!

Managing storm water could be very costly, for example just one inlet can cost you $2000, plus all the trenching, pipes, etc, for another 100-ft another $8000, so take that in consideration. As an alternative, you could be creative and do an impervious pavement, if the soil can handle the percolation rate... Not sure what type of soils is in your area, this will likely apply to sandy soils.

Hope this help.

Sean Walton · Answer

@Albert D. I agree with @Ray Thorsen it may not be a permitted use in R-2 so you would have to get a conditional use permit. You probably don't want to re-zone because of the time and money involved especially if you plan to rebuild apartments.

A parking spot may only be 113 to 180 SF depending on layout compact or standard but you also need circulation unless you plan to do a valet lot. You can hire an architect or parking consultant to give you the most efficient layout. If you knew the exact layout of your future building and you didn't want a basement it might be worth using the foundation as part of your parking surface but cars dripping oil on your future indoor space might cause issues with flooring adhesion later.

The solar payment centers are great but you still need someone to patrol every few hours to make sure people are paying. And also keep someone posing as an attendant and taking people's cash. This happens a lot in San Francisco not sure about your area?

It might be better to joint venture with an experienced builder to get rebuilt sooner in exchange for giving them a cut of monthly rents or some other deal. The opportunity cost of not having your property at its highest and best use for 2 or 3 years while you educate yourself can add up. And no better way to learn than shadowing the people doing it on your project with skin in the game.

Josue Vargas · Answer

@Albert D.

In regards of reusing the parking lot materials to construct the concrete foundation of your future building, it is likely that you need additional material and other separation layers (such as base course) to support the loads of the building (depends on how many stories, dead loads, live loads, snow load, etc.) to build-up the foundation concrete lab or other type of foundation.

In other words it will like like this from top to bottom:

1) __" Concrete Foundation

2) Over __" Aggregate base course

3) Over 3" of HMA (Hot-Mix Asphalt)

4) Over __" of Aggregate base Course

5) Over compacted (95% Modified-or not Proctor)

An engineer will likely in consideration the existing good quality and compacted materials, if he has some proof that the parking lot was constructed with quality (well compacted subgrade, base course, etc). It may save you money to excavate and dispose the material to build the foundation of your building and replace with other materials.

I would recommend that grading of the parking lot, as well as grading of the future building is taken in consideration. The parking lot should have good drainage (usually as 1-1.5% min. slope), but the grading of the building slab should be relatively flat (0% to 0.5% depending on what are the foundations (exterior for drainage 1-2% slope, interior definitely 0% slope).

Hope this help! Good luck!

Josue Vargas · Answer

@Albert D.

As a civil engineer, I see a lot of these costs for my projects, and they vary greatly depending on the volume of the project, the area, the type of pavement, if its a general contractor or individual small contractors and you manage them, type of facility (Governmental, individual--private owners--you in this case--, commercial, industrial, etc.,, parking lots, rural roadways, highways, tollways, airfields, etc.) At the end of the day, is just an estimate and we want to be as close as possible from the final number.

I would be careful figuring these costs by just calling the "Joe's Asphalt Co." and "Joe's Earthwork Co." I assure you, that the asphalt plant prices/square yard is not the actual cost of the asphalt layer placed in the project. Cost associated with subcontractors (a general contractor subcontract the asphalt and earthwork job, and they charge 10% of the subcontractor price), plus compaction equipment and personnel, overhead and profit of the general contractor, insurances, etc.

I would recommend taking in consideration adding costs such as permitting, storm water pollution prevention plan (fees, silt fence, straw bales, and such things), Engineering Services, any City or County fees for the projects, inspection and material testing costs?, any connection to utilities (check with your local utility companies).

Josue Vargas · Answer

@Albert D.

The cost of the asphalt layers I provided are just estimates (only for the materials itself) for a simple/typical design of parking lots for cars. You can estimate pavement cost using two methods, cost/volume or cost/area. I use cost/area assuming some thicknesses. Yes, you have to add all layers, plus other costs if you want a complete number for your project. I'll talk more about this... I'll be breaking this into several posts...

The engineer would likely have to perform soil studies (soil borings) to determine the actual strength of the subsurface and from there the thicknesses of asphalt layer, aggregate base course, OR other base courses that may be required. This study is usually performed by a geotechnical engineer, which also may or not be the engineer performing the actual design. Some do include the required layers, while other just say consult a civil engineer for design. Take that in consideration when calling for estimates.

Usually, asphalt and aggregate base course with a good compacted and graded subgrade will be enough. So this ball park cost for a 1,000 Square Yards (1 Square Yard = 9 Square Feet), will be $24,000 only for the asphalt portion itself (asphalt layer, aggregate base course, etc). This cost includes the labor, materials, overhead and profit. Now note that this is a very very small project for most good and big contractors and they will likely charge you more, just because they don't have time or it just not worth it for their business.

Albert D. · Answer

@Josue Vargas; @Andrew Johnson; @Sean Walton; @Ray Thorsen:

Thank you all. Great great advice.

Looks like the permit could be an issue if the city views me as a competition. Otherwise, it'll be a matter of processing. Not a big deal. I need to clear that first.

Cost to build still seems unclear to me. Yes, this is a flat ground, no concrete left (sadly the demo guys damaged the slab and footings and removed them although engineer deemed they are sound for rebuilding).

@Josue Vargas, when I think about the total cost to build, should I add up all the layers (subgrade, base course, asphalt) together to get a total cost? How do I determine the depth/heights of each layer to get to the SY?

Rebuild costs: not quite clear if I can reuse the parking lot build as foundation to rebuild apt on OR if I have to demolition the parking lots and lay concrete foundation to rebuild.

Hope someone can clarify a bit.

Many thanks.

Ray Thorsen · Answer

I would start with talking to the town and see if they would allow it. You would be competing against them for revenue during off peak but if on peak times result in full lots they may be open to it. If they would allow you I would then ask them who did there lots and who else bid on it. I would also ask who the civil engineering firms they use as they will be familiar with your style of proposed project and more importantly the town people and politics. These contractors will most likely be the highest price but they will also be arguably some of the most qualified. From there you should get quite an education and then can shop more competently for bids.

Turn apt land into Parking Lot business, anyone?

Turn apt land into Parking Lot business, anyone?

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