Nothing I can add to this story…the writer has covered it all. But it’s always worth fossicking around in the property database to see how that parcel has progressed.
If there is a clearer illustration of how land increases in value with no effort on the part of the owner, I can’t imagine it — a 10 fold increase in value over 20 years for a parking lot.
It’s only 1/6 of an acre…if we apply the Mercer metric™ of $1M/acre per year, that’s about $160,000/year in ground rent/land value tax…as of 2021, that parcel only generates $38,190.82/year. If the parking racket doesn’t generate $160k/year, maybe it’s time to develop the land into something more remunerative — you know, the highest and best use. All I see now is someone making a 10x gain for nothing, while that land is wasted on car storage. That looks like a 12% annual return over 20 years: not bad for no effort or as the man said “Landlords grow rich in their sleep.”
What’s especially frustrating is that everyone in the real estate game, from developers to the local school district, understands the value of land, as an asset to hold onto or to develop under a ground lease — except the city of Seattle itself. It sells surplus land that investors add to their portfolios with no incentive to develop it. The city has even turned down lucrative lease offers, opting for a fee simple sale that represented a fraction (15%, in the case of the Mercer life sciences campus) of the offered revenue for that project. That left almost $1B on the table, a revenue stream that could have been used to borrow against (does no one in the city’s finance office know the future value function in Excel?): $1B over 99 years annualizes to $12 million per year. And that’s for one property, one development, one acre of the almost 500 Seattle has set aside as downtown/commercial real estate.