Parking mogul Gary Spindler handed over control of one if his Far West Side parking lots to a developer from the west – the Midwest, that is.
Spindler signed a long-term ground lease on one of his parking lots at 622 West 51st Street to Barrington, Illinois-based LSC Development, property records filed with the city show.
Neither Spindler nor LSC principal Christopher Barry could be immediately reached for comment. Financial terms of the lease weren’t available, but the lease runs for 99 years through 2116.
The site is one of the many lots and parking garages Spindler and his father, Fred, own and operate through their company Park-it Management. Many of the parking properties are on the Far West Side, where for years property values were depressed and parking was the highest and best use.
Land owners and developers would often hire parking operators to park cars on vacant lots, simply to cover taxes and carrying costs until values appreciated. And with the Far West Side now a trendy destination, developers are looking to develop those properties.
The parking lot runs block-through between West 50th and 51st streets, and with a footprint of roughly 25,000 square feet, the site holds about 125,000 square feet of development rights. The property is zoned for manufacturing use, however, so a residential development is out of the question as-of-right.
The manufacturing zoning does allow for self-storage, hotel or office uses. Barry’s LSC Development specializes in industrial parks, office properties and self-storage spaces. The city recently put in place a special-permit requirement for self-storage facilities in Industrial Business Zones, but it doesn’t apply to the LSC property because it’s not in an IBZ.
Skyline Properties’ Robert Khodadadian, who was not involved in the deal but recently worked on a ground lease at 236 Fifth Avenue, said these kinds of long-term leases are beneficial for both sides.
“I think it’s a great solution for multigenerational owners who have assets that they’ve been protecting for a long time. When you do a ground lease, you’re technically not transferring title, so there’s no capital gains tax,” Khodadadian said.
“And [for the lessee], it’s not like you’re buying a building at a low cap rate and waiting for the upside. You get to invest and do capital improvements and increase cash flow,” he added.