Mayor Jerry Dyer and others marked the start of construction during a ceremony.
The seven-story garage is the latest project in the city's years-long downtown transformation.
"These garages will not only add to the experience of downtown residents, but also our guests, and actually give us a more affordable downtown," said Councilmember Miguel Arias.
City officials highlighted several other projects planned or underway downtown.
An eight-story high-rise will bring 160 housing units at the end of Fulton Street, while additional housing is planned in the historic Helm Building.
A Marriott Courtyard hotel is also under construction near the Convention Center.
City leaders are also discussing a sports complex in Chinatown.
"We have more construction in the downtown area today than we've ever had in our history," Dyer said.
Dyer said the city's transformation efforts will continue with $100 million from the state following Gov. Gavin Newsom's signing of the state budget Monday.
"We have a plan for all those funds. We have a linear park that will be developed. We have some street and road maintenance," Dyer told Action News.
The city will use part of the $100 million as a revolving loan fund for developers to encourage additional housing construction downtown.
"Investors are now willing to come in, maybe step up and continue to do some of the housing development we need," Dyer said.
The parking garage is expected to open in September 2027.
Located directly across from the baseball park, local business owners said they are excited the project is moving forward.
City officials said additional projects include an entertainment district, a new communications center, and a new police headquarters.
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