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I'm missing something here. 5 gallons of primer ($75 of kilz or zinser) will cover 400-600sf. Paint is the same coverage. I use Glidden white semigloss from Lowes. $48 for 5 gallons. That's pretty cheap and you'll have a lot more light.

It sounds like you have an older garage. Tar paper is used whenever you want to stop moisture going thru, I have put siding on sleepers to allow airflow behind the siding. You don't have to do this. I would sprayfoam with open cell foam if I was going to condition the space. Closed cell if...

Use 12' 2x6 fir studs if you want straight. You may have to call a place or two to find stud grade. It's out there. I live in the pine belt. I just order extra and return my culls. If you don't need 10' doors, frame at 10' and raise the ceiling above the lift. Or vault the ceiling.

I've used spray foam extensively since 2010. Other than the initials cost, there are very few drawbacks. It will pay for itself if you heat and cool the space. ROI varies with size, climate and usage. If you have smells inside a foam sprayed building, it's gonna take air flow to remove...