Driving around Manhattan can be a hazardous sport. Cabbies signal lane changes by changing lanes. Brazen bike messengers yield for few things, and stop for fewer. Congested pedestrian groups form walls as they cross the street, stymieing cars attempting to make right-hand turns. The harrowing journey often ends in an expensive parking garage, awash in the smell of burning rubber as an attendant peels off in your car. Comparatively, it can seem like a privilege to sit idly for a $2 subway ride.
Some car-owning city residents do have a reprieve, however, if they live in a co-op or condo building with a parking facility. Not only do they have a guaranteed parking spot that's close to home and sometimes discounted below market rates, but they also benefit as shareholders in a corporation for which a garage can generate significant income.
"A parking garage is usually the largest source of income - other than shareholder maintenance - that a co-op or condo has," says Donald Levy, director of management at Lawrence Properties, a building management company based in Manhattan.
In fact, a commercial garage can be a significant enough source of revenue to tip the so-called "80/20 Rule" out of a co-op's favor by generating more than 20 percent of the building's income. By law, a residential co-op must get at least 80 percent of its total revenue from shareholders' monthly maintenance payments, or forfeit valuable tax exemptions and abatements; a successful garage operation could very easily disqualify its parent building by simply making too much money.
That's not the final word, however. In many cases, the sticky wicket posed by the 80/20 rule can be skirted by establishing an adjacent garage as a cooperative entity in and of itself, or by leasing the space to a wholly owned subsidiary that acts as a shield. In any case, Levy sees it as a happy problem.