We’ve all learned that car collections quickly become storage problems. It is easy to fall into the spiral of having bought so many cars that more space is needed. So a new garage is constructed, but that leads to buying more cars, which makes it necessary to build an even bigger garage. And on and on.
Everyone’s holy grail becomes a large, dedicated storage facility that can not only shelter our cars but also serve as a living area and social space where we can pursue our automotive passion. A place to store cars, work on them, decorate the place, pursue our artistic tendencies, relax and entertain guests — it’s every car collector’s dream.
Neighbor backlash
Your neighbors may feel otherwise. Several readers recently sent me links to an interesting article in The Wall Street Journal, “Garage Mahals are Driving Neighbors Nuts.” Written by Joe Barrett, it reports that some Minnesota car enthusiasts are getting pushback over their large car-storage facilities.
One collector in Victoria, MN, planned to build a 6,000-square-foot garage until it was challenged by his neighbors. Local rules restrict the size of free-standing garages and storage buildings, but his was going to be attached to the house, which would allow a much larger footprint. The means of attachment — a covered walkway — was decried by opponents as a way to circumvent the law. The planning commission, however, did not agree.
Another homeowner in the Twin Cities area built an $18 million subterranean garage that could hold a full-sized RV. The neighbors, who could only see the garage door, didn’t like it. They sued and lost, although an appeal may be in the works.
Home alone
In many areas, legal restrictions on the size of storage buildings have been sidestepped simply by adding living space. Doing so allows these garages to technically become houses. These properties have become popular in many parts of the country, acquiring nicknames such as “barndominium” and “shouse” (for shop-house).
Whether you can build one of these depends on your specific local land-use rules. Here in Oregon (which is no slouch when it comes to rigid zoning laws, I might add), there is nothing wrong with having a covered walkway to convert a detached garage to an attached one. However, we have more-rigid requirements on barndominiums, which are viewed suspiciously and discouraged.
What you can legitimately build is entirely a local issue to be analyzed by your attorney. It’s impossible to generalize about this.
Uncertain economics
Even if you can build your dream garage, it might be prudent to ask whether you should. I contacted a longtime friend, Mark Scholz, to ask about the economics of all this. Scholz is a successful real-estate broker who has specialized in selling homes with large garages in the Portland area since 2006 (portlandhomesforcars.com).
“It’s just like remodeling your kitchen,” he said. “You do it because you want a better kitchen. But it doesn’t add as much value to the house as it costs.”
Scholz explains that national appraisal standards aren’t very hospitable to large garages. “National appraisal standards allow $10,000 to $15,000 of value per additional parking space over whatever would be the ‘norm’ for the property,” he said. “Detached structures generate lower values, as they are frequently built to lower standards than the house or can be classified as agricultural buildings.”
Large garages do add to the desirability of a property. Scholz sees $20,000 per stall for added capacity as pretty easy to justify. If the space is finished to a higher standard — with plumbing, epoxy floors, high ceilings to allow lifts, etc. — that can easily be $25,000 per additional stall. A high-quality, free-standing building, built to match the look of the house and with all the usual garage-mahal features, can add value to the tune of 60% to 70% of its construction cost.
Yet this calls into question the pure investment value of garage mahals. What you’re fighting is that the next owner of your property may not value that car storage space as much as you do. And even if the next owner is a car enthusiast, they still have to think about to whom they are going to ultimately resell the property. Thus, there is always a discount to construction cost.
Garage developments
If building your own garage mahal isn’t in the cards, there are numerous developments around the country that will happily sell or lease one to you. These developments range across a wide spectrum. At one end sit pole barns or steel buildings with few amenities other than pure storage. At the other are the fully developed garage communities that cater to automotive enthusiasts.
Barrett mentions such developments in his article, including AutoMotorPlex in Medina, MN, the brainchild of Bruno Silikowski. He spent about 15 years studying the idea before breaking ground on the project in 2006. The 20-acre AutoMotorPlex comprises a dozen buildings, each divided into individual garages. It is sold out, with about 170 owners and just under 250,000 square feet of garage space. Silikowski has since expanded into nearby Chanhassen, MN, as well as Indianapolis, IN. He also has an active consulting practice advising developers of similar projects.
AutoMotorPlex is legally structured as a condominium — you buy individual garage space and can resell it as and when you wish. Pricing generally falls into the $300-per-square-foot range for the base unit, which comes with electrical, plumbing, security, HVAC and a mezzanine. But then you get to add as much to the final design as you choose. Silikowski says that some owners spend $100,000 on extra buildouts, while others can spend a million.
Silikowski eschewed standardized sizing and instead focused on identifying the uses to which his buyers would put their space and designing appropriate spaces to fit those uses. His smallest unit is about 800 square feet, which was ideal for the owner who wanted to house a motorcycle collection. His largest is about 8,000 square feet. The “average” is probably in the 1,200- to 1,400-square-foot range.
The “secret sauce” is that these facilities are not just about storage, but very intentionally about lifestyle. “We put great effort into making AutoMotorPlex an event venue,” Silikowski said. “For example, we have monthly car shows seven months out of the year where our owners open up their garages and show their roughly 1,200 cars. But we also open it up to the surrounding community and can get another 1,200 cars to show. We add food vendors, artist booths and other vendor booths to make each show a true car event.”
To facilitate all of this, Silikowski designed a campus where the free-standing buildings are spread around the property in a non-uniform manner. That creates space in between the buildings for events, as well as parking space for cars and trailers, and other temporary uses.
Silikowski is pleased to report that a number of his owners have resold their garages at a profit — exactly what real-estate broker Scholz says is tough to do when you build on your own property.
The right fit
For me, the choice for car storage was pretty easy. My wife and I moved to a 30-acre property outside Portland that came with a free-standing, 2,000-square-foot building that was built to match the house. That became my car barn, and the convenience of having everything I need and want right at my home is tough to beat. There was some additional build-out cost, of course, but it was on the low end of what Silikowski reports.
Replicating that building now would be an expensive undertaking. Not only are construction costs higher, but land-use rules can be troublesome. Agricultural buildings are easy to permit, but as soon as you start adding electrical and plumbing, the county starts suspecting that you’re trying to sneak in a second dwelling, which is illegal.
Renting pure storage elsewhere is an obvious option, but that has its own drawbacks. If all your cars are not right at home and your stuff is divided between two locations, frequently, what you want is at the other place.
Many car-storage facilities rent individual stalls, with a lot of cars stored in a large warehouse-style space. Their costs can be lower, but this adds potential security issues, as access might not be as controlled as you want. With other renters and their guests able to walk among the cars, there is potential for unexpected accidents.
The AutoMotorPlexes of the world are certainly the premium option. You not only have the total security of your own space, but also the lifestyle and camaraderie advantages of being part of a car community.
My advice to any car enthusiast is to pick what works best for you and go for it. Life is too short to have too few cars!
John Draneas is an attorney in Oregon and has been SCM’s “Legal Files” columnist since 2003. His recently published book The Best of Legal Files can be purchased on our website. John can be contacted at john@draneaslaw.com. His comments are general in nature and are not intended to substitute for consultation with an attorney.
