A 450-space parking garage at the pink Pelican Walk shopping center would lose money for at least a decade, requiring $272,025 to $710,734 in annual city subsidies to break even, according to a new study.
The analysis, submitted this month by Philadelphia-based Chance Management Advisors, Inc., contradicts a city report last May determining the $7.6-million project on N Mandalay Avenue financially feasible.
The problem boils down to location and demand: essentially, the new study found, beachgoers have more attractive parking options, both free and closer to the water.
On Monday, Mayor Brian Aungst said more parking is essential to future development on the beach. He backed a proposal allowing the city to lease 180 spaces in a smaller garage built by Pelican Walk owner Louie Anastasopoulos.
"I think people would get used to it," said Aungst, adding later: "I don't think it's too far to the beach. I would park there."
Commissioner Frank Hibbard questioned the validity of the study, which was conducted in August and September.
"My concern is that the numbers are wrong," he said. "That's what we're basing everything on."
The study examined existing public and private parking in the area, along with the city's parking revenue history and estimated future demand.
One option required everyone to pay full price, while the other included free parking for Pelican Walk customers. Neither proposal showed the garage breaking even, with annual losses estimated at $454,327 and $710,734 through at least 2013.
The study estimated construction costs at $14,883 per space, a figure city officials believe is too high. Dropping the price tag to $10,000 a space reduced annual losses in both scenarios to $272,025 and $528,432, respectively.
City staff also outlined proposals to lease or buy spaces in a garage built by Anastasopoulos. On Monday, he told commissioners he has no plans to build a garage without some form of city involvement.
For several years, city officials have considered buying Pelican Walk's lot for about $1-million and building a public garage there. A previous commission promised to add 400 spaces on the beach by the time the new Clearwater Memorial Causeway bridge opens next year.
A five-story Pelican Walk garage would mean a net gain of about 300 parking spaces. The figure takes into account existing parking spaces at Pelican Walk that would become part of the new garage and spaces removed on the east side of Mandalay Avenue as part of the street beautification project.
City Manager Bill Horne said Monday that retail development in the area will eventually trigger increased demand.
"We may have to carry that garage for three or four years," he said. "The real question becomes, do you want to spend the money to take the risk?"
Commissioners will discuss the matter Thursday during a 6 p.m. meeting at City Hall.
_ Jennifer Farrell can be reached at 445-4160 or farrellsptimes.com.