Constructing a Parking Garage

The city is considering two ways of developing a downtown block which is owned by the city government. One option is for the city to build and operate a parking garage. The other is to sell the site to a private firm which would construct a parking garage. Proponents of a municipally built garage argue that it would be less expensive for the city to build the facility than for a private operator. They claim that, since the city already owns the land, the only costs under this option would be for construction and operations. Since a private firm would have to buy the land, it would need to charge higher fees in order to recover its costs. Evaluate the proponent's argument.