While Cincinnati leaders would like to see their parking system generate more in revenue than it costs to operate and maintain it, that is not the reality. It is, however, the reality across the river in Covington.
A review of Covington’s recently approved 2014-2015 budget estimates the parking system will bring in approximately $1.6 million in revenue, while costing only $1.1 million for operations, maintenance and upgrades.
One of the largest chunks of Covington’s annual parking revenue, however, comes from lease payments which total about $491,000 – or nearly one-third of the city’s annual parking revenues.
Had Cincinnati followed through with its parking lease agreement, it too would have realized these benefits by offloading expenses and locking in fixed lease payments. Under Cincinnati’s parking lease, the city would have received anywhere from $3-4 million in annual payments from the concessionaire.
In order just to break even, the City of Cincinnati has and continues to defer needed maintenance and upgrades, while also depleting its parking fund.
Covington will also benefit from increased parking rates, which will net the city an additional $68,500 in the first year. Those changes include a 10-cent per hour increase for on-street parking meters, and a $2 per day increase at the RiverCenter Parking Garage.
In addition to on-street parking meters throughout downtown, Covington has 818 parking spaces in 16 surface lots and another 1,574 spaces in three different parking garages.
There are far more parking spaces in America than there are cars. The total is so high, in fact, that there are even more than double the number of parking spaces in America than there are people. There is a parking glut, not a shortage, and this problem is getting worse as more and more people are choosing not to drive at all or at the very least drive less.
What this means is that parking garages need to be designed in a way that will allow them to be repurposed for other uses. In Cincinnati, this is playing out at the new dunnhumbyUSA Centre where its garage is being designed so that office space can be built in its place in the future. All parking garages, however, should be designed in such a way. More from NextCity about how leaders in Atlanta are working toward just that:
On Wednesday the school unveiled SCADpad, a series of three micro-housing units in a parking garage near its Midtown Atlanta campus. The idea is a novel yet simple one: Repurpose underused parking garages — about 40,000 parking structures in the U.S. operate at half capacity, according to the Urban Land Institute — for housing in dense areas that need it. The 135-square-foot micro-apartments each take up one parking space, with an additional space for use as a “terrace” (seriously!), and were designed by 75 current SCAD students, 37 alumni and 12 professors. A dozen students will move into the apartments on April 15.
“Think about it,” Sottile said. “Many of these 20th-century parking structures are on their way toward obsolescence, and we’re asking questions about how those can be reinvented for neighborhoods. There’s also a historic preservation side of this. And we want to see how can we get them back into higher usage.”
Broken and malfunctioning meters plague Cincinnati’s parking system. Photograph by Randy Simes for UrbanCincy.
We are continuing to look at opportunities inside City Hall that could help alleviate Cincinnati’s budget and pension liabilities, while also maintaining and improving service delivery.
In addition to the waste collection reforms that include a shift to a Pay As You Throw system, we will be making other specific policy recommendations that we feel will improve the quality of service delivery while also improving the City’s finances – ultimately working toward a long-term, structurally balanced budget.
Back in June 2010, UrbanCincy examined the finances of the city’s parking system. In this analysis, and comparison with cities from around the country, we discovered a broken system that was not performing the functions it needed to perform, and was not financially solvent.
As a result, we recommended a seven-year lease of all 5,700 of the city’s on-street parking meters. We estimated that such a deal could yield just over $3 million in annual payments, while also ridding the city of the associated financial liabilities. We did not estimate what an upfront payment could be due to the infinite number of variables that could affect that.
While much has changed politically since that time, the facts remain the same. Cincinnati’s parking system is broken, and is in need of immediate upgrades and reforms.
One of the first actions by the newly elected Mayor John Cranley (D), however, was to halt the signed Parking Lease & Modernization agreement, executed by former City Manager Milton Dohoney, which was structured to solve these exact problems. Under that deal the City would have leased four parking garages, one parking lot and all of the City’s on-street parking meters to the Port of Greater Cincinnati Development Authority.
The Port then agreed to work with Xerox to manage the system and implement comprehensive upgrades to the deteriorating and outdated system. This would have included electronic parking meters that accept credit cards, real-time parking availability data systems and the rehabilitation of existing lots and garages.
The deal would have also provided the City of Cincinnati with an upfront payment of $85 million, generated approximately $3 million in annual installment payments over the life of the agreement, and guaranteed approximately $98 million in capital investments into the system. For better or worse, that agreement has been jeopardized and we are essentially back at square one.
So where and what exactly is square one?
The City has been experiencing declining revenues from its parking assets for several years now. Revenue collections peaked years ago, but have been declining recently due to inadequate enforcement and the parking system’s poor state of repair. These assets require constant and expensive maintenance and upgrades, so virtually all of the money generated by the Parking System is spent maintaining the Parking System.
This is important. The Parking System does not generate any excess revenue for the city to use on other basic services.
In most years the Parking System is revenue neutral, meaning that the revenues it generates cover its expenses. This is acceptable, unless you are deferring maintenance costs in order to make the numbers match. This has been the case in Cincinnati for years, and has left the Parking System in terrible condition.
The situation has gotten worse in recent years as council has worked to balance the budget without laying off employees. In both 2010 and 2011, the city spent considerably more on the Parking System than it collected in an effort to keep it up to snuff. We are talking $3.6 million more in 2010 and $1.1 million more in 2011. This stopped in 2012 when the city cut its annual investments in the Parking System by several million dollars.
For reference, investments in the Parking System today are approximately 38% lower than they were when the City invested $13.3 million into the Parking System in 2010. Over that same period, the parking fund balance has dropped from $12.5 million to $7.8 million.
Simply put: revenues are down, maintenance is being deferred and the parking fund is being depleted. This is not sustainable.
The recent proposal from the Cranley Administration, which was immediately and thoroughly rejected by just about everyone except five council members, does not address what the problems are, and therefore does not propose appropriate solutions for those problems.
The situation and trajectory is dire and UrbanCincy recommends that the City of Cincinnati move forward with upgrades to its Parking System immediately. Absent the previously agreed upon Parking Lease & Modernization deal or some other public-private partnership; here is how we suggest doing so:
Issue bonds to upgrade all parking meters in the city to use the latest electronic payment collection and occupancy tracking technology. This would include pay-by-phone capabilities.
Utilize the new technology to implement variable pricing structures that reflect real-time market demand. If there is a Bengals game downtown and meters near the stadium are packed, then the rates on those meters would increase, while meters further away would maintain lower rates. In neighborhood business districts the same would be true. When demand is high so should be prices. When demand is low, prices should drop accordingly to make it a more attractive option for those visiting our neighborhood business districts.
Release a new application, website and text alert system that notifies drivers of parking space availability and informs them of the associated rates.
Sell the city-owned parking lot at Third Street and Central Avenue so that it can be repurposed into a tax-producing property.
Create a special lease agreement for city-owned parking garages and lots, so that the separate authority could manage advertising at these locations. The Ohio Revised Code currently does not grant cities authority to sell advertising in such a manner, but not allowing for advertisements is unnecessarily cutting off much-needed revenue. Let’s get creative so that we can maximize revenues without burdening our residents, businesses or visitors.
Tear down the Garfield Garage, which is in greatest need of repair, and market the site to developers interested in building on it. Such a development agreement could include the provision of the same or greater number of parking spaces to be replaced – similar to the deal signed for the new residential tower to be built at Fourth and Race Streets in the place of the Pogue’s Garage. This will free the city from a major capital expense that would further deplete the parking fund in the near future.
Tear down the Seventh & Sycamore Garage, which is the only thing blocking the construction of a $14.2 million, 115-room hotel and 725-space garage from being built in its place. The existing 450-space garage is also in poor condition and its removal would be another major liability coming off the City’s books.
Conduct a citywide study to determine appropriate adjustments to the hours of operation for on-street parking meters on a neighborhood-by-neighborhood level.
Following through on these eight recommendations will allow the city to maintain ownership and control of its Parking System while also allowing it to make the necessary upgrades and improve the balance sheets for this portion of the budget. These changes will make the Parking System a revenue generating asset not just in rhetoric, but in reality.
The increased revenues will allow for the City to replenish the parking fund, make its upgrades and take additional revenue and use it to support other essential but non-revenue generating public services.
5th Street Exterior - Image Provided by ImageFiction.
During the month of August, UrbanCincy covered several new developments and events in the city’s urban core. We also published two editorials that generated much response from our readers and the local community. Our top 5 most popular stories for August 2013 were:
Cincinnati has seen a wealth of private real estate investment over the past decade. The problem, however, is that almost all of that investment is oriented toward those residents and workers using cars to get there. But in Miami, a city known for its flashy cars, a new development is looking to change that mindset. More from The Atlantic:
Miami and cars. They go together like piña and colada, right? Well, maybe so. But one new luxury condo in the heart of downtown is making what is, for this Florida city, a bold move. The building in many ways fits the profile of recent development in Miami’s reviving core: It has 36 stories, 352 units, and 10-foot ceilings.
But as for parking? Zero of that. Not for private motor vehicles, anyway. The Centro, as it’s called, will have a five-car Car2Go auto share station featuring the city-backed service’s distinctive, blue-and-white Smart cars; covered bike parking; and, if Miami gets bike share, maybe one of those stations as well.
The project breaks ground this fall, and the parking-garage-free tower was made possible by city zoning that allows no parking garages in buildings that are close to transit in densely developed areas.
