This morning Juan Gonzalez of the New York Daily News writes:
The firm that built and manages the new Yankee Stadium parking garages can’t repay $237 million in tax-exempt bonds the Bloomberg administration arranged for it four years ago, new financial records show.
Bronx Parking Development Company LLC is running perilously low on cash reserves and faces a looming default by the end of the year, according to a report filed Friday by a trustee for the firm’s bondholders.
Time is running out, in other words, to avoid one of the biggest failures in decades of bonds issued by a New York City agency.
The simple fact is that Bloomberg and his aides made a costly mistake when they succumbed back in 2005 to the Yankees’ demand for a 9,000-space garage system. It was all part of the deal for the team to build a new stadium in the Bronx.
But Yankees fans have shunned the garages, where gameday self-parking rates soared last year to $35 — up from $23 previously and more than double the original $14 charge. Valet parking now goes for $48.
Gonzalez also notes that Mayor Bloomberg’s aides say any losses will have to be borne by the bondholders, and deny pledging to back the bonds through the Mayor’s office or through the city’s Industrial Development Agency. This tune rings all too familiar. Economic development deals that seem “too good to be true” often are. However, there is a kernel of optimism in that the Mayor’s office is considering leveraging additional city parking assets that actually would create value for residents and motorists.
This past spring, the New York Economic Development Corporation issued a request for expressions of interest asking for ideas on how “to develop new sources of revenue (and restrain costs).” Marc LaVorgna, a spokesman for the Mayor, explains, “We’re seeking a partner to help us reduce the costs or bring in revenue and one area is parking meters.” Bloomberg News Service also found that last year the city earned over $140 million in revenue from its 49,989 parking meters and 48,854 ticket issuing muni-meters, while collecting $575 million in parking violation fines.
Bloomberg clarified his interest in privatization during a February appearance on WOR 710 AM saying “We’re not going to turn over the right to set parking rates or set the fines or that sort of thing, but installing and maintaining equipment, there’s nothing magical about that.” The city is also considering privatizing six city-owned vacant lots.
The botched sweetheart deal for parking lots by Yankees Stadium was a mistake, and indeed it serves as a cautionary tale. However, Bloomberg’s new approach to managing parking assets has been done effectively around the world and should not be lumped in with the Yankees Stadium deal.
Take Vancouver, whose officials are effectively leveraging both dynamic pricing and public-private partnerships to improve parking infrastructure. Donald Shoup, parking guru and professor of urban planning at the University of California at Los Angeles, recently described Vancouver’s parking to Jeff Lee of The Vancouver Sun saying:
“The reason for getting the right price is that the wrong price does so much harm. Nothing is so poorly managed as parking. Vancouver and Canadian parking companies are at the forefront of [accurate pricing for parking].”
Lee also interviewed Neil Podmore, vice-presdient of business development for Vancouver-based PayByPhone, Podmore described Vancouver’s parking saying:
“I think Vancouver has actually been ahead of San Francisco and L.A. for a long time. They realized that on-street parking was a valuable commodity, that it ought to be broadly market-based and they haven’t thrown a lot of money into technology…”
“There is a big question in the industry as to whether you need to invest $10,000 per parking space in order to get near-real-time-based parking. Vancouver hasn’t gone that way so they’ve been efficient with the money they spend for the money they get.”
While policymakers in cities like Vancouver, San Francisco, Chicago, and Indianapolis are implementing innovative improvements to their parking infrastructure, policymakers in New York City and elsewhere would be wise to catch up before it’s too late.