Parking Clauses, Parking Clauses, Everywhere, But Not An Answer To Be Found

Seek and ye shall find isn’t always true. An example will be today’s blog posting. We’ll raise some issues but offer no solutions. Today is audience participation day. If so inclined to publically offer some thoughts, the comment feature at the bottom will be your ultimate destination.

We’ve been in a number of parking lots lately – schools, churches, public, airports, shopping centers, and more. Many have been far emptier than we’re remembering and we’ve been seeing changes. We have been seeing the tell-tale logos of “Transportation Network Companies,” a/k/a Uber, Lyft, Taxify, etc. We’ve been doing the slaloms around motorized scooters from some of those providers and many others, mostly with four-letter names. A number of times already, we’ve expressed our sense that these and other non-owned transportation alternatives will reduce the need for shopping center parking. So, we’re not going to say those things again. If you are interested in those thoughts, use the Ruminations’ search feature.

A by-product of the Transportation Network Company disruption is that landlords (and others) are now designating curb space as pick-up and drop off areas, and setting aside areas within the parking lot as staging or waiting areas. We’ve also sensed, though our sensors may be a little “off,” that landlords (and others) are increasingly setting aside parts of their parking lots for valet services, most often those who charge for the service and pay rent or a percentage of the receipts to that landlord. [By “others,” we include landlords of other than shopping centers and even self-users.] In some areas, and increasingly so with a very slow, but relentless, governmental and societal push for public transportation, curb space and some staging areas increasingly are being set aside for buses and light rail use.

Just as shopping cart corrals are common at supermarket or discount store-focused shopping centers, look for corrals for motorized scooters and bicycles. They are coming to your neighborhood.

Electric car charging stations are sprouting. That’s a good thing (we think). How the revenue is applied could be a matter for contention, but such dedicated parking spaces are a customer-oriented feature. On the other hand, these dedicated parking spaces, added to those set aside for handicapped parking and for staging areas and waiting areas, reduce the total available parking at a property. That’s because, though they may be empty at any given time, they are not available except for the designated use.

Some landlords have even instituted paid parking, ostensibly to chase away students at nearby schools and to chase away workers in office buildings where parking is not free. Merchants can “validate” parking. Whether the validation time is sufficient (an hour, two or three) or whether this will ultimately become another cost center for tenants is to be seen.

Tenants with strong bargaining power have been successful in getting some protection for what they consider their prime parking. By example, they typically get a “protected” parking area for spaces proximate to their store’s customer entrance. They will also get protection for critical entrances and exits and for critical drive lanes. Some (wiser ones) will also get protection for routes to and from their loading docks.

Tenants with some bargaining power, but not at the strongest level, will often bargain for a minimum parking ratio. Typically, that minimum will be stated to be that set by local law. Wiser tenants negotiate for that ratio without regard to “variances” because they realize that merely stating “no less than that permitted by zoning laws” allows for variances that reduce what “code” calls for (absent a variance). Thus, they’ve negotiated for no better than what their landlord must already abide by because a landlord could get a ratio-reducing variance.

There’s more coming. Parking apps make it easy to turn all or part of a parking lot into restricted, paid parking. Also, we just saw a parking lot where additional handicapped parking spaces were “activated” only on certain days. Imagine what we could image about future developments in the wonderful world of parking lots?

Have you looked lately at the way your form lease handles these developments in “parking”? Have you rethought your long-developed, never rethought, negotiating approaches to parking issues in light of the changing environment? What will you be doing to take advantage of these changes (and those yet to come), each useful new tools to attract customers looking for a better shopping experience? What will you do to balance the overall benefit to the shopping center against possible negative effects on your leased space? What about the revenue implications of these changes? How should the revenue be allocated? How should additional costs be handled?

Ruminations has reviewed a ton of leases. From what we’ve seen, very few answer more than a couple of those questions; most answer none. How about your leases?