For the past few weeks, I have been working with the Planning and Land Use Group (PLUG), which is a group of planners, architects, and activists living in the Ironbound and Newark, in a fight against the continued sprawl of parking in this city. As the 2012 Master Plan notes, there is over 20 acres of parking surrounding Penn Station, which happens to be the best connected transit hub in New Jersey as well as the primary entrance to downtown Newark from transit. Unfortunately this acreage is expanding like a cancer on the city. A new parking lot in the Ironbound was approved in 2012 (though that decision is under appeal) and the Zoning Board was hearing an application to convert an old industrial site into another surface parking lot.
As a part of the neighborhood opposition to the parking lot, I developed an analysis of the population density, employment density and tax revenue generated on the blocks adjacent to Edison Place and Ferry Street from Penn Station to the eastern intersection of Ferry Street and Market Street. I chose this study area because the Ferry Street corridor is one of the most vibrant commercial corridors in New Jersey. The street is lined with great Portuguese, Spanish and Brazilian restaurants, bakeries, and shops. The parcel that planned to be turned into a parking lot is on a block adjacent to Ferry Street and would benefit from its proximity to this corridor. Furthermore, the block is within 1.200 feet of Penn Station and thus is in a prime location for transit oriented development. The last thing this piece of land should be is a surface parking lot. The 2012 Master Plan recognizes this fact and in its land use element proposes that this land be used for Mid-Rise Multifamily Residential. Buildings in this classification have a maximum height of 8 stories, can have ground floor shops and offices and if within 1,200 feet of a rail transit hub such as Penn Station, are not required to have any parking for buildings with 50 or fewer units. Newark’s Master Plan is following modern planning principles and its recommendations for this land are absolutely correct. The question now is if the Zoning Board will follow the intent of the Master Plan.
Using data from the US Census Bureau’s 2010 Census, the population density of the Ferry Street Corridor ranges from a low of zero people per square mile to a high of 76,650 people per square mile. High population densities are clustered near Ferry and Wilson as well as around Ferry and Jefferson. Areas with the lowest population densities are located in two blocks north of Ferry between Prospect and Jefferson, at the shopping centers near Ferry and Niagara and at three blocks near Penn Station that are primarily used for parking. While the study area has a population density of 28,286 people per square mile, the blocks with parking only have 2,168 people per square mile. Newark is missing out on its potential to increase its population by allowing these blocks to be used for surface parking. If these blocks were developed at the average density of the study area, there would be an additional 400 people living there. The parcel in the Zoning Board application would have 20 people living on it if built to this density. This neighborhood would be 400 people more vibrant with development. There would be 400 more pairs of eyes watching the streets and deterring crime. 400 more people would be building their lives in this city and helping change the appearance of Newark from a parking lot wasteland to a great community to live in.
The employment density of the Ferry Street corridor ranges from a low of zero jobs per square mile to a high of 321,400 jobs per square mile. High employment densities are spread throughout the neighborhood, with a large cluster along Ferry, east of Wilson. Low employment densities are found north of Ferry between Polk and Van Buren,along Ferry between St. Francis and St. Charles, and at three blocks near Penn Station that are primarily used for parking. According to the US Census Bureau’s 2011 LODES data, the study area has an employment density of 24,127 jobs per square mile while the blocks with parking have an employment density of 2,867 jobs per square mile. Once again, allowing surface parking means that Newark is missing its potential, and in this case it is losing out on potential jobs. If these three blocks were developed at the same employment density of the study area, there would be 345 jobs on these blocks. These three blocks in 2011 employed 41 individuals; 1/8th the employment density of the neighborhood. If these blocks were developed in conformance with the Master Plan, the number of jobs in Newark would increase. This would bring further prosperity and an increased vibrancy to this great corridor.
Property Tax Revenue
Finally, I analyzed the property tax and parking tax revenues likely to be generated from this property. Unfortunately the Zoning Board is not allowed to take this information into account, but I do feel that it is important in analysis. While cities shouldn’t ban land uses simply because they do not generate the largest tax returns, I do feel that cities with major budget problems such as Newark should have the right to reserve their most valuable land (such as land near transit hubs) for higher value generating uses and relegate the lowest value creating uses to lower valued land. The tax revenue generated along the Ferry Street corridor ranges from a low of zero dollars per square foot of land (institutional and religious uses) to a high of $19.39 per square foot of land. High tax revenue densities are found between Market and Ferry near Penn Station and along Ferry Street between Jefferson and Merchant. Low tax revenue densities are found near the Eastern section of the Ferry Street corridor, including the shopping centers and at the three blocks near Penn Station that are primarily used for parking. Using property tax data from the Essex County Tax Board, I determined that the study area generates $2.83 in property tax revenue per square foot of land, but the blocks with parking only generate $1.81 in property taxes per square foot of land. Each square foot of surface parking costs Newark $1, and with the acres upon acres of surface parking, this adds up quickly. Furthermore, the buildings within the study area are typically low-rise buildings with many of them not having any major renovation for decades. Though it is a vibrant corridor, these buildings are not especially valuable from a tax assessors perspective. On additional aspect bringing down the tax revenue generated is the large amounts of institutional land that do not pay any property taxes, though this is compensated for by the benefit to safety, education and culture created by these institutional uses.
The city of Newark charges a 15% tax on all parking revenues. Creating a surface parking lot will bringin some revenue, though not as much as development. Assuming the parking lot’s 75 spaces are 90% occupied 5 days a week for a daily cost of $14.50, the parcel in the application before the Zoning Board would generate an additional $38,276 in parking tax revenue for a total tax bill of $59,059. If they charge $40 for event parking and achieve a 25% occupancy (something unlikely due to their distance from the Prudential Center) and do this 3 days a week, parking would generate $55,874 in taxes for a total tax bill of $76,657.
If this property was developed in a way that generated property tax values similar to existing buildings in the study area, it would generate a greater amount of property taxes. If the property was developed enough to generate $5.00 per square foot of land (similar to a newish building with 2 floors of residential units above a floor of parking), it would return $99,465 in property taxes. At $10 per square foot of land (similar to two newish buildings on Lafayette with 3 and 4 floors of office space respectively), the property would have a tax bill of $198,930. Finally, if built similar to a newish building with 4 floors of office space above a floor of parking near Penn Station, the property could generate $20 per square foot of land in property tax. Here the total tax bill would be $397,860: this is 5 times the tax revenue generated under the second parking tax revenue projection. Not one of these scenarios reach the density recommended for this parcel under the 2012 Master Plan, so tax revenue could hypothetically go even higher. Using this land for its intended purpose would generate more tax revenue to a city desperate for money.
If this land is allowed to be used as a surface parking lot, the City of Newark will be missing out on a great potential. The potential for increased population, additional jobs and increased tax revenues means that the 2012 Master Plan was correct. This land should be treated as some of the most valuable land in the City. Surface parking is an underutilization of this land and development should be encouraged to replace the parking lots within 1,200 feet of Penn Station. Newark needs development here, not another surface parking lot.