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There is no such thing as a business having too many quality parking spaces, just like there is no such thing as being “too rich or too thin”.  Right of way takings often result in a loss of parking spaces, leaving the remaining property less valuable. This loss in value constitutes a damage which is recoverable as part of full compensation for the taking. However, quantifying damages due to loss of parking is often disputed in takings cases.

In quantifying damages for lost parking spaces, it is critical to understand not only how the parking spaces are used, but also how the entire site functions. Specifically one needs to know exactly how the site is utilized by the business and its customers.  For a business to be successful, it must provide its customers with enough parking spaces that are available, convenient and safe. If it does not, this business is at a competitive disadvantage and its customers will go elsewhere. In addition, there must also be sufficient parking to accommodate the future growth of the business.

The three most important things about any property are location, location and location. The same can be said of parking spaces.  The spaces close to the main entrance, typically at the front of the building, are the most valuable.  Front spaces are more convenient for the customer than those located to the side and rear of the building and may be considered too remote and inconvenient.  Properties with limited front parking have lower rental rates when compared to those with ample front parking.

Some real estate appraisers will attempt to limit damages for lost parking by focusing on the total number of spaces for the overall property without regard to the location of the spaces.  For example, if the remaining number of parking spaces after a taking is greater than the number of vehicles observed on the site on any given day, the appraiser may conclude that there is no loss in value and therefore no damage. Such a position ignores the fact that many customers will not use parking spaces they perceive to be inconvenient or too remote from the front entrance of a business. It also ignores the fact that when there is a loss of parking, the ability for a business to grow at that location is lost.  In short, loss of desirable parking results in a loss in value and damages. Because of the taking and loss of parking, rental rates can drop and the remaining property may no longer be suitable for the owner or business after the taking has occurred.

In summary, damages related to loss of parking spaces must take into account the location of the remaining parking and the customers’ perception of the quality parking available at the business.

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