Parking, September 2016
By: Lance Miller, CPP and Ted Anglyn, CRE, MAI, CCIM
Since 2010, the national real estate market, by most accounts, has experienced favorable economic trends, benefiting from low interest rates as well as improving supply and demand fundamentals. The corresponding result has been relatively stable rent and value increases. How long will the good times prevail, and will the six-year real estate recovery continue?
The first quarter 2016 Situs RERC econometric model forecasts continued growth for the next three years, albeit at much slower rates and decelerating from 1.89 percent growth in 2016 to less than 0.63 percent growth in 2018. Overall, this trend is positive, but the much slower economic growth should give pause to real estate investors who are thinking strong rent and value growth are guaranteed.
Real Estate Market Success Uncertain
The prevailing theme for the national commercial real estate market as of mid-2016 is uncertainty. The recent political upheaval Brexit has caused on major regulatory issues is giving concern to many investors.
While on a relative value basis, real estate as an asset class remains attractive as rates of return can quickly evaporate if the capital debt markets should contract. Debt market contraction may, in fact, be one of the biggest risk factors impacting real estate.
Commercial banks complying with new equity requirement hurdles, high volatility commercial real estate requirements, construction lending and the commercial mortgage bank securities (CMBS) market complying with new risk retention rules that take place in December 2016, all contribute to this. Of note, these two capital sources, commercial banks and the CMBS market, comprise roughly 62 percent of the $3.5 trillion commercial debt real estate market. They also represent the two largest sources of debt capital that finance commercial real estate.
National Property Type Overview
Per the Situs RERC first quarter 2016 investment conditions report, the strongest real estate sectors are:
The industrial warehouse segment benefits from the proliferation of online retail. According to a recently released study by commercial real estate services firm Colliers, there was 61 million feet of big box industrial space delivered in 2015. However, with net absorption taking up almost all of the new space, year-end occupancy was around 93 percent, with certain geographic areas like Orange County, Calif., seeing above 98 percent occupancy rates in industrial warehouse markets.
Neighborhood/ commercial retail
This space benefits from necessity retail. Neighborhood/commercial retail is more insulated from online shopping, with groceries representing the largest component.
Multi-family development including student housing has benefited from strong demographic growth factors tempered with low cost capital availability. However, a recent PwC real estate barometer indicates significant softening market conditions with increasing vacancy and slowing rental growth brought about by new supply entering the multi-family sector. The result is that many real estate investors fear overbuilding in the foreseeable future in many markets across the country.
The central business district office market has benefited from many corporations relocating offices to urban centers where millennials live. Overall, the national office market has advanced from the office sectors relatively slow recovery, which precluded product oversupply. Vacancy rates on a national level have been trending down for the past few years and are forecasted by the National Association of Realtors to be less than 13 percent by 2017. A significant positive trend for parking is office densification, with more employees per square feet, leading to overall more positive demand for parking.
Two of the aforementioned property types that have benefited from parking investments the most is the proliferation of many urban apartments with often less parking provided than resulting demand, (see sidebar for more detail) and new urban office development.
Another positive parking real estate component, but not in the top four sectors, is the resurgence of hotel development in many urban centers. A prevailing trend for many of these three noted property types (urban apartments, CBD office, and hotels) is that many of these structures have been constructed on what had been existing surface parking lots. The result is a double positive for parking: reduction in supply with parking lot elimination, and new overflow generated demand from development constructed with inadequate on-site parking.
LESS MANDATED PARKING MEANS MORE DEMAND FOR EXISTING SPACES
While many in the industry agree that parking real estate is becoming more difficult to acquire, once acquired, reduction in parking space requirements may be making the development of parking real estate easier.
Often, one of the largest barriers impacting development is complying with zoning codes related to parking space requirements. In many cities, however, these rules are changing rapidly. Development zoning rules are loosening across the nation, and they are, in turn, creating even more demand for the limited remaining parking spaces left behind.
Miami Developers Near Transit are Parking Decision Makers
In October 2015, commissioners in the city of Miami passed an amendment to allow developers of any new building under 10,000 square feet near a transit corridor to decide how much parking they want to build. This exemption shift is a game changer for small surface lot owners, who might not have been able to build or sell their land as a viable project under the older zoning rules.
The city of Miami has also completely waived parking requirements in its densest CBD areas within 1,000 feet of a Metromover or Metrorail station. Some major residential condominium projects have taken advantage of this waiver and are building without a single space of on-site parking.
Land Size, Shape Often Determine Parking Feasibility
Most developers admit that figuring out how much parking to build alongside a residential project can be an art form. The decision often depends on the size and shape of the land. One downtown Miami developer is completing a 40-story structure with 352 units on a slender lot, measuring only 22,000 square feet. The developer recently disclosed that the only way the project was feasible was constructing the project without parking.
Close by, the cities of Miami Beach and Coral Gables also have similar exceptions, where small buildings under a certain square footage are exempt from typical parking requirements.
These zoning changes are happening now. In city council meetings across the nation, it’s common to have discussions about overhauling or totally eliminating outdated parking requirements. Time will tell if these trends benefit the parking real estate market as an investment class.
Lance Miller, CPP, is co-founder of JNL Parking. Email him at firstname.lastname@example.org. Ted Anglyn, CRE, MAI, CCIM, is founder of Parking Property Advisors and an NPA Parking Consultants Council member. Email him at email@example.com.
Few years late, but they now want a seat. Tracking this to see how this turns out.
Yield Search: Parking Lots
By Sonia Talati
In the search for higher yield, alternative assets like infrastructure and real estate are drawing ever more scrutiny. But Todd Briddell, CEO and CIO of CenterSquare, the real asset management arm of BNY Mellon, says real estate investors should, at this point in the cycle, consider the most overlooked property assets, such as parking lots.
They are, Briddell says, a sweet addition to the property portfolio that can help maximize returns, particularly when the lots are sold down-the-line. Those actively investing in parking-lot properties, either directly or via funds, can make returns in the 12% to 18% range.
How so? Many companies have outgrown the office parking lots that were originally cut out for them, causing parking demand to increase dramatically, Briddell says. “It used to be enough to have 3.5 to 4 parking spaces per 1,000 square feet on average to accommodate the number of tenants expected to park in a building. But now, the requirement has doubled—and most parking structures haven’t caught up.”
That’s an opportunity, and a few real-estate moguls and quick-witted investors are reshaping and renovating parking lots for more effective uses. Briddell says, keep an eye out for suburban properties needing parking-lot improvements. He found, for example, a building in the outskirts of Dallas, Texas, which was overflowing with call center employees. They desperately needed more parking spots. Briddell noticed an adjacent warehouse that was unused, bought it through CenterSquare’s fund, and converted it into a parking lot, offering to double the parking available to the call center’s employees. With the renovation of the warehouse, he was able to sell an interest and secure a 12-year lease with the company running the call center. That handsomely benefited the CenterSquare clients who had invested in the fund.
The opposite thing happened in Harbor Island, Fla., where a former call center slowly became an upscale business hub with top-notch law firms and consulting services. As a result, “hundreds of parking spaces were available in our building,” says Briddell. He started scouting for better use of the space. Briddell discovered a development going up in the neighborhood—zoned for multifamily residents—that could benefit from the available parking spots. He told the residential developers he could dedicate hundreds of parking spots to residents of the new building and offered to build a bridge connecting the two buildings. In the end, both sides won: the developers didn’t have to construct a parking lot of their own, and Briddell ultimately sold them his parking-lot property for $10 million more than the price he acquired it for.
No surprise, then, that some wealth management firms are jumping in on the parking-lot trend or other such plays, and that includes Tishman Speyer/Citigroup Alternative Investments Real Estate Venture funds and J.P. Morgan Asset Management’s array or U.S. value-added real estate strategies funds.
Briddell’s CenterSquare runs Urdang Value-Added Fund and CenterSquare Value Added Fund, both of which comprise of real estate investments that capitalize on building improvements, leasing and other revenue enhancements, and increasing operating efficiencies. The returns over the last ten years were above 10%. Briddell says direct investors in his firm’s real estate projects, which are offered besides the funds, are institutions, endowments, foundations, and some high-net-worth individuals. There’s a $7.5 million minimum investment in the direct projects.
The underlying principle in all of these niche real estate plays, whether at the fund or directly: find parking structures where supply does not meet demand and figure out a creative way to bridge the two.
Great article in the February 2016 edition of Parking from JNL's own John Roy:
In the summer of 1993, Donald Trump landed in Tokyo and was chauffeured to Tokyo Imperial Hotel to have dinner with wealthy Japanese hotelier Hideki Yokoi. The purpose of the visit was to enlist Trump to help Yokoi in dealing with a common business enemy–Leona Helmsley.
Two years earlier, Prudential Insurance Company secretly sold the Empire State Building to Yokoi for $41 million. At the time, most people believed that the building could command a price of more than a billion dollars, but Leona Helmsley inherited a 114-year lease that her late husband had negotiated with Prudential in 1961, and she refused to break the lease at any price.
Since Yokoi’s building could be worth 25 to 30 times more without Helmsley’s lease, he enlisted the help of Trump to find a way to terminate the lease. In exchange, Trump negotiated a 50 percent ownership of the building for nothing more than $100,000 in legal fees.
As parking investors and owners, the value of our parking assets are perfectly correlated to the leases that encumber real estate.
Your reaction may be to question how Prudential could possibly make such a foolish business decision as to enter into a 114-year lease.
When you dig into the details, you see Prudential’s mistakes, and learn what owners of parking assets can do to protect themselves from entering into similar bad leases.
Everything Starts With the Lease
Parking brokers throughout the country review and negotiate leases for clients. Before negotiating a deal, good parking brokers will always begin with the lease, as owners are not always aware of all of the points and nuances in them.
In some cases, brokers can uncover value of which the seller was not aware, allowing brokers to value assets at higher prices than the current asking or market rate.
In other cases, time is wasted throughout numerous hours of negotiation to find out that the deal was not what the owner had represented. The following outline gives investors an idea of some of the most important aspects of a lease.
Take a Close Look at Lease Terms
What is the term of the parking lease? I have seen brokers market a parking asset as a secure 15-year passive parking investment.
The real truth of the security lies in the termination clauses. What “outs,” or ability to cancel the parking lease does the lease document contain? Most operators have “demand generator” clauses that allow the operator, as a lessee, to terminate the lease if revenues fall below a certain percentage. In some cases, what the owner thought was a long term lease can actually be a very short lease that destroys the overall value of the property.
Avoid Opting for Automatic Extensions
In the case of Prudential, they originally signed a 30-year lease at 100 basis points above the prime interest rate in 1961. At the time, as a risk-averse insurance company, it was considered a decent lease. The problem was that the lease contained four, 21-year extensions at the termination of the original 30 years without the lessor having any ability to terminate the lease over the next 114 years.
I recently advised a large parking company to change the terms of their operator leases to include “mutual” extensions to their leases instead of automatic extensions. Under mutual extensions, both the lessee and lessor must agree on an extension past the original term.
Most operators include language that give them an “option,” which is the right but not the obligation to extend the lease past the original termination date. Since parking rates and revenues historically continue to increase, owners want the flexibility of shorter term leases with mutual extensions beyond the initial term.
Allow Termination of Leases Upon Facility Sales
Owners must include language in leases that allows the seller to terminate the lease upon sale or for development. I recently negotiated a lease in Northern California where the owner gave an operator an option for a 10-year extension without any “outs” in the lease. The property’s value based upon a multiple of the current lease is approximately $4 million.
I submitted the seller a cash offer on behalf of my client for $11 million contingent upon the operator not extending the lease. This operator controls the future sale of the property and has all of the power.
Another client purchased a portfolio of surface lots and signed 15-year leases with a national operator. He sold the portfolio two years later for more than $13 million, nearly doubling his original investment because he had termination clauses upon sale that allowed the new owner to sign significantly higher leases on the portfolio.
Negotiate Annual Increases
Parking rates and revenues tend to increase yearly. It is important to negotiate annual consumer price index increases and/or participation. Participation is a lease clause that allows owners to collect a certain percentage of every dollar generated on their lot beyond a certain threshold or benchmark.
As the site’s revenues increase, owners should be able to participate in the increased revenue along with the operator. This allows the owners’ parking asset to continue to appreciate in value during the term of the lease instead of essentially turning their parking asset into a fixed income bond or coupon clipper.
By increasing revenue on an annual basis, a buyer will pay the owner a set multiple for every dollar of additional revenue. In Houston, a client is on pace to collect approximately $120,000 in additional rent in the form of participation on a garage. Assuming he sold his garage at a 15-times multiple, the extra revenue stream makes his garage worth an extra $1.8 million.
Whether it’s the Empire State Building, a large parking garage or a small surface lot, there is power in a good lease with the right business clauses negotiated. In parking, shorter-term leases with revenue participation are best, with the ability to terminate leases upon sale or development.
John Roy is co-founder of JNL Parking. Email him at firstname.lastname@example.org
The “Grave Dancer” has added a new move, selling a River North parking garage for more than twice what he bought it for in 2013.
A fund led by Chicago real estate billionaire Sam Zell, whose colorful nickname describes his knack for buying distressed assets at low prices, sold the 366-space garage at 33 W. Ontario St. for $16.9 million to Jones Lang LaSalle Income Property Trust, Cook County property records show. The Zell Credit Opportunities Master Fund paid $7.2 million in June 2013 for the garage at Ontario and Ohio streets, when it was tied up in foreclosure, saddled with $13.7 million in debt.
Impark, the operator of the parking garage, “did a good job increasing the net operating income and the brokers did a good job of selling the story,” said John Hammerschlag, president of Chicago-based parking investor Hammerschlag & Co., who was not involved in the deal. “That kind of number was far too rich for my taste.”
The sale illustrates the rewards distressed investors like Zell are reaping after buying overleveraged properties and turning them around. In Chicago, it has worked for Zell on a Wacker Drive office tower and a failed West Loop condominium project.
Prices of all property types in Chicago are rising amid an improving economy, low interest rates and sky-high prices on the coasts, which have made Chicago, where prices have not jumped as much, more appealing to investors. Parking garages are no exception.
A fund led by Sam Zell sold the parking garage in this condominium building for $16.9 million. Photo: CoStar Group Inc.
“There's huge interest right now,” Hammerschlag said. “There are definitely funds out there looking to acquire parking assets. You're buying cash flow, so it's like buying a hotel without the expenses of running a hotel.”
Matthew Berres, a senior vice president at Chicago-based Jones Lang LaSalle who brokered the sale, and a spokeswoman for Zell declined to comment. A spokeswoman for LaSalle Investment Management, JLL's investment arm, which oversees Jones Lang LaSalle Income Property Trust, did not return a call.
In a marketing flier, JLL emphasized the garage's proximity to River North's growing technology sector, population base, restaurants and night life, as well as the garage's potential upside on future parking rates. The facility, built in 2003, is connected to a 60-story condominium tower and is next to a 367-room Embassy Suites.
Since buying the garage, Zell spent more than $110,000 on improvements, boosting its 2015 projected net income to $1.2 million, according to the JLL flier.
How Landon Cohen went from parking cars to making Super Bowl roster in less than a month
Over the years someone would see Landon Cohen in the newspaper, or maybe even on television, and think, "That guy … wait … is that the valet?"
Yes, sometimes Landon Cohen parks cars. And sometimes he plays in the NFL.
Cohen, amazingly, did both this month. And now he's one win from parallel parking a Super Bowl ring between his knuckles.
As most fantasies go, Cohen's January has been the definition of awesome. Four weeks ago, he and two lifelong friends were running their valet service in Spartanburg, S.C. One workout and a few phone calls later, the journeyman defensive tackle landed with the Seattle Seahawks, despite not having been on an NFL roster the entire regular season.
Seahawks tackle Jordan Hill went down with a knee injury on Jan. 4, and Cohen got a sleepy, midnight call from Seattle the next day.
"Landon was a very active player," Seahawks coach Pete Carroll said after bringing Cohen aboard. "We had our eye on him."
Cohen, 28, was inactive in the Seahawks' first playoff game against the Carolina Panthers, but played a healthy role (14 snaps) in their wild NFC Championship win over the Green Bay Packers. That included two crucial goal-line stands early in the game. And he even got in a lick on Packers quarterback Aaron Rodgers.
"It's been a nice little ride," Cohen said with a chuckle this week.
That's an understatement, but that's also Cohen: 6-foot-1, 300 pounds, even-keeled and pragmatic. He quotes the laid-back life wisdom of Bob Marley and says the Super Bowl is "big," but adds that he wants to do something "even bigger" in his life.
Cohen has learned to try to keep his emotions grounded. This is what happens when you get drafted out of Ohio (University, not State) in the seventh round by the Detroit Lions in 2008 and go through your rookie season on the first 0-16 team in NFL history. Or when you get signed and released by eight different teams in seven years – a career that has included stops with both the New England Patriots (2010 and 2011) and Seahawks (2011 and now). Or when you live your mornings in the YMCA, alternating between weight training and yoga and boxing.
And after all that? Then you spend the larger part of the past three years parking cars. That's what makes Cohen a fun NFL story this week: His existence on a Super Bowl roster is more a matter of sheer determination rather than blessed talent. Ask any NFL player, and they will say this is the truly admirable grind – having the mental strength to see a roster need and fill it. Maybe only for a week, or a month … or, if fortune smiles on you, an entire season. And when it ends? You work a normal job, like running a valet service.
There are a lot of NFL guys like this – annually blending in with mortals while awaiting the next opportunity to put on that NFL cape. In the rarest of opportunities, they get to step out of the phone booth and onto the Super Bowl stage.
"It's crazy," said Jeffrey Dawkins, Cohen's childhood friend and a co-owner of their Spartanburg valet business, The Valet, LLC. "A couple weeks ago, he was parking cars. Now he's in a three-point stance. Crazy."
It's crazy because Cohen has actually managed to juggle both pursuits. Unsure if he'd get another NFL shot after signing and getting cut by the Philadelphia Eagles in less than one day in 2012, Cohen started his own business. Sitting out the entire 2012 regular season, he launched an events-based car-parking service in his hometown of Spartanburg with Jeffrey and another childhood friend, Terence Dawkins.
Called "The Valet, LLC", the trio started out by soliciting partnerships and parking cars themselves. The ground-up venture eventually launched a website and began packing the schedule with anything and everything – parties, weddings, city events and private contracts. A little more than three years later, they've added nine employees and built a thriving business out of a hustling mantra: "We run fast and drive slow."
Cohen has been getting NFL work in bits and pieces, too, including nearly an entire 2013 season divided between the Dallas Cowboys and Chicago Bears. He even signed on with the Buffalo Bills in 2014 but was ultimately cut before the regular-season opener.
Each time the NFL work ended, he headed back to Spartanburg to a focused existence: train in the morning and run the valet business in the evening, which included doing plenty of the work himself. That is, if he can actually get inside your car.
"Some cars I can't even fit in," Cohen said with a laugh.
Occasionally he'll get noticed or asked about the NFL, but it has never been something he'd flaunt or obsess over.
"I don't talk about football unless I'm playing," Cohen said. "If I'm valeting, nobody knows I play football until it comes out in the paper or something like that.
"If I'm valeting, I'm valeting. If I'm volunteering, I'm volunteering. I don't set myself up for disappointment. I kind of stay right there in the middle. Never get too excited, never get too down. It's been years of practicing living that way. But you get 100 percent of me in whatever I do. If I'm valeting, you got 100 percent of me, not 50 percent of me thinking about football."
And this week? It's all football. With the Patriots leaning heavily on a physical running game with LeGarrette Blount, defensive line depth should be at a premium. That gives Cohen a high percentage chance of being on the active roster Sunday night, in a similar rotation to the NFC championship.
That's as far ahead as Cohen is thinking. There are no preparations for bringing home a Super Bowl ring. And even beyond Sunday, there is no thought of whether this moment might be a foothold to a more stable NFL career.
"I just live my life, man," Cohen said. "Taking care of my little dog, Beyoncé."
See a need and fill it. Big or small. Parking cars or playing in the Super Bowl, that's what Cohen plans on doing. That said, his mantra might get a little tweak this week.
Run fast on Sunday. Drive slow on Monday.
Great read on automated parking spaces being a main driver for sales.
JNL's own John Roy was interviewed by the Valet Spot about parking investing (of course). It's a candid interview that any new or experienced parking lot investor will benefit from hearing.
Today, we are excited to have on the show, John Roy of JNL Parking, a company that provides parking lot broker services. He’s also an investor, a certified parking professional, and an operator in the parking industry.
On this episode of The Valet Spot, John shares his expertise in the field of investing and increasing the value of parking lots.
Tune into to find out detailed information about which parking lot features and services have the best return on investment. You’ll also find out how to communicate effectively with a parking lot owner so that the doors of opportunity may open and start you on your parking lot investment journey.
Listen to This Interview to Learn:
This is the kind of news you want to read if you are a parking investor. It confirms once again that parking is a scarce resource and when developers are hungry for land it's the first place they turn to fill the need. Here are two recent articles that highlight that this trend is not going anywhere in the near future:
Sayonara Parking Garage, Hello Ubiquitous Luxury Housing
April 9, 2014, by Zoe Rosenberg
It seems the Post has also caught onto the trend that parking lot parcels are being snatched up and converted to luxury condos. This time, talk centers around an Upper West Side garage on West 77th Street between Broadway and Amsterdam Avenue. The for-sale lot is being marketed as a residential teardown that can be expanded from its current 7,700-square-feet to 77,000-square-feet. The Post expects the lot will fetch in the ballpark of $61 million, or $800 per square-foot, thanks to its neighbor, the luxury rental development The Larstrand.
The garage at 219-233 West 77th Street is not the only lot to grace the market with development aspirations. There have been quite a few before it; a few of which we mapped. The Post notes that Finance Department statistics declare a loss of five parking garages in Manhattan in the last two tax years. In the past, Brooklyn has seen a loss of 40 garages, the Bronx has given up 30 garages, and Staten Island has lost three garages. The trend extends most heavily in Queens, where 44 garages have been snatched up for development in years past. The trend accompanies a privatization of parking spaces—found increasingly under new luxury rental and condo buildings—making it even more of a challenge and a privilege to have and park a car in the city.
Upper West Side Garage to Turn into Cushy Condos
April 8, 2014, By Lois Weiss
Another Manhattan garage building will bite the dust to be reincarnated as a place to park people.
The Upper West Side garage at 219-223 W. 77th St. is on a plot of 7,700 square feet. Sources said it is being marketed as a residential tear-down that can be redeveloped to 77,000 square feet.
Located on the north side of the street between Broadway and Amsterdam Avenue, and next to the new 20-story Larstrand rental, it would not surprise us to see bids rising to or above $800 per square foot — more than $61 million.
Calls to the Avison Young marketing team of Vincent Carrega, Neil Helman, Jon Epstein and Charles Kingsley were not returned.
Like other brokerages, this group has been active in the garage-sale market. Finance Department statistics show Manhattan had 865 garages in the tax year 2012-2013, but 860 in 2013-2014 — a loss of five garages and an untold number of spaces.
It also seems more are being marketed every day.
Brooklyn, the land of the hipster bikester, is losing even more — so far, 40 have bitten the dust.
Thirty are gone in the Bronx and three in Staten Island.
Queens is the biggest auto-space loser, however, as 44 went down for the count.
The good news is that the city’s tax rolls will increase as expensive luxury apartments take the place of these lower-valued garages. The bad news is that finding a place to park a car is getting a lot harder.
While a few parking spots have already been sold as a condo development perk, we predict that some entrepreneur will buy or take their current garage building, split it up, and sell all the spaces as car condos.
As the New Year is upon us, we like to reflect upon the deals from year past that were made, lost, and the great opportunities in parking investing for 2014.
No other story reflects the optimism, spirit, and entrepreneurship of the parking industry more than the story of “Nick Antonelli”.
Nick was the son of Italian immigrants that settled in Washington DC. His father sold Olive oil on the streets and his mother died at a very young age. After returning from WWII, Mr. Antonelli got a job as a valet attendant and was so poor that he survived on nothing more than cornflakes and water. The boarding house where he lived was so bad, that he spent week-ends killing rats and bugs with Kerosene. This however, did not deter Mr. Antonelli from his ultimate dream of one day buying a parking lot.
Read his full story as written by Emma Brown from the Washington Post:
D.C. real estate, parking-lot magnate Dominic F. 'Nick' Antonelli Jr. dies at 88
By Emma Brown
Washington Post Staff Writer
Dominic F. "Nick" Antonelli Jr. grew up so poor that he survived at times on nothing but cornflakes and water. After dropping out of high school, he made a living as a carhop in a parking lot across from the plush Mayflower hotel in downtown Washington. He lived in a boarding house nearby, where he spent Saturdays ridding his room of bugs and rats with the careful use of kerosene.
From those beginnings, Mr. Antonelli used determination, shrewdness and connections with the District's elite to build one of the city's largest and most powerful business empires, a conglomerate of parking lots and sprawling real estate investments that gave him a key role in shaping the development of the city and its suburbs.
Mr. Antonelli, 88, who became part-owner of the Mayflower before the collapse of his businesses forced him to declare bankruptcy in 1991, died July 19 at his home in Potomac. He had cancer.
Mr. Antonelli went into the parking-lot business in 1946 when, using carefully scrounged savings, he leased and then bought the lot where he had worked as an attendant. He eventually built a nine-floor corporate headquarters there for Parking Management Inc., the firm he founded with railroad heir Kingdon Gould Jr. By the mid-1960s, PMI operated 90 lots in the city, and the company's logo is still ubiquitous on garages in the District.
He gave generously to politicians, including Rep. John L. McMillan (D-S.C.), the longtime chairman of the House District Committee, to prevent the creation of a municipal parking authority. But he realized early on that land, rather than parking, was the key to wealth.
Working 18-hour days, the entrepreneur made millions of dollars in the post-World War II real estate boom of the 1950s and '60s. He bought and demolished hundreds of old buildings, turning the sites into parking lots until he was ready to build office buildings, apartments other profitable developments -- many of which included PMI garages.
Mr. Antonelli's real estate holdings extended into Washington's suburbs and as far afield as Panama, where he owned more than half a million acres of land, a coconut-oil refining business and a Coca-Cola bottling company. He also owned interests in a range of businesses, including tomato and cucumber farms in the Bahamas, an auto-parts manufacturer in Maine and a ship-salvaging outfit in Texas. He lived on a 22-acre estate in Potomac and occasionally spent time on his 103-foot yacht.
The key to his success, he said, was his willingness to work harder than anyone else. His first big business deal came in 1947, when he bought a pair of binoculars and rented a room on the top floor of the Willard Hotel. Camped there for several days, he counted the cars going in and out of the Great Plaza, a giant government-owned parking lot at 14th Street and Pennsylvania Avenue NW.
When the Great Plaza came up for lease, the information Mr. Antonelli had collected gave him an edge. He submitted the winning bid and went on to operate the lucrative lot for more than 30 years.
After a rise, a fall
Decades after Mr. Antonelli's rise, however, his business empire began to falter. By the early 1960s, he had co-founded Madison National Bank and Mortgage Investors of Washington. The bank financed real estate ventures in the region and came under scrutiny for lending heavily to Mr. Antonelli and other insiders.
In 1978, Mr. Antonelli was indicted on charges of bribery. Prosecutors said that he had landed a $20 million contract to lease office space to the D.C. government in return for providing financial help to mayoral aide Joseph Yeldell, who owned a struggling travel business and was unable to repay his loans from Madison National Bank on time.
Mr. Antonelli and Yeldell were convicted by a Washington jury, but the case was retried in Philadelphia after it came to light that the father of one of the jurors had worked for -- and been fired by -- Mr. Antonelli. The second time around, the two men were acquitted.
Mr. Antonelli, an intensely private man who rarely spoke to the media, stayed largely out of the news until the early 1990s. He was forced to seek Chapter 11 protection in 1991 when Madison National Bank failed, a recession slowed the real estate market and several loans that he had guaranteed for other developers went bad, leaving him with more than $250 million in debt that he couldn't repay.
In one of Washington's largest and most complicated personal bankruptcy cases, the same financiers who had courted Mr. Antonelli's business for decades were now creditors who examined his business records and convoluted partnerships in a years-long search for assets.
In 1993, Antonelli reached a settlement that required him to turn over his considerable business and interests and sell his estate. He repaid creditors about 35 cents on the dollar; in return, he was allowed to keep $4 million, which he used to live on after buying a modest home in Potomac.
Children of immigrants
Dominic Frank Antonelli Jr. was born April 8, 1922, to Italian immigrant parents in McAlester, Okla. His mother died when he was young, and the family moved to Washington, where his father sold olive oil and his grandfather worked as a marble carver -- six of his statues adorn the Union Station entrance downtown.
Mr. Antonelli was an Army veteran of World War II. At one time, he worked in the circulation department of The Washington Post, whose former offices on E Street NW he eventually bought and leveled to create a parking lot.
His marriage to Dorothy Lee Jones ended in divorce. Survivors include his wife of 42 years, Judith Gwenn Dolan Antonelli of Potomac; two children from his first marriage, Lee Antonelli of Jupiter, Fla., and John Antonelli of Deerfield Beach, Fla.; and three grandchildren.
Mr. Antonelli was friends and investment partners with big names in Washington real estate, such as steakhouse entrepreneur Ulysses G. "Blackie" Augur. But even with his allies, he could be less than forthcoming during business negotiations. He once asked 10 businessmen to join a venture that required each participant to pitch in $100,000. According to the Washingtonian magazine, one of the men asked Mr. Antonelli what he planned to use the money for.
"If I have to answer all those questions, I don't want you in the deal," Mr. Antonelli reportedly said.
He was a founding member of the National Italian American Foundation and helped establish the Casa Italiana Language School adjoining Holy Rosary Church in Washington. He played at least two games of gin rummy each week: one at the University Club, where he was a member, and another at the Touchdown Club, once housed downtown in a building he owned.
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