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by Paul Bass | Jan 10, 2011 8:15 am

(22) Comments | Commenting has been closed | E-mail the Author

Posted to: City Hall, Transportation, City Budget

As New Haven tackles a budget crisis, it’s considering selling off garages and parking lots across town.

The DeStefano administration is reviewing the city’s portfolio of six garages and 22 surface lots to see which, if any, to unload. The city is scrambling to close $8 million projected budget deficit for the current year—and a projected $57 million gap for the upcoming one. It is putting up for sale whatever property it feels it doesn’t need (such as this old school).

“Everything’s on the table right now,” Mayor John DeStefano said in an interview. No decisions have been made yet about what if any facilities to sell, he said.

While budget woes have pressed the issue to the forefront, DeStefano said the portfolio review stems largely from policy concerns. The city’s budget crisis has presented an opportunity to rethink ways government has operated for decades—such as whether it belongs in the parking business.

“The only reason we have these garages is a public policy of the ‘50s and ‘60s,” he said. “They’re a legacy that doesn’t make sense.”

The city decided to build garages to support private development back then. It might make more sense now for private owners to pay for their parking, DeStefano argued. Also, the city has vowed to promote alternatives to car travel.

Thomas MacMillan Photo As an example, DeStefano cited the Air Rights Garage (pictured). It basically serves Yale-New Haven Hospital. Why shouldn’t the hospital own it and run it?

(Asked about the idea, hospital spokesman Vin Petrini responded, “We’re not aware of the city’s interest in selling off the garage, so we haven’t given it any consideration.” The city doesn’t actually own most of the Air Rights Garage; it has an ownership interest in conjunction with the hospital.)

In recent years the DeStefano administration’s development plans—such as for “Lot E,” a spin-off set of apartments, offices and stores near the new cancer hospital—have included private construction and management of parking.

The city’s mayorally-appointed parking authority still oversees 8,413 spaces at the 28 lots and garages, according to Executive Director William Kilpatrick. He said the authority doesn’t maintain a record of the estimated appraised value of the land and structures. He declined comment on the question of whether it makes sense to sell them.

The garages don’t lose money year to year, the mayor said. But that accounting doesn’t include liability and upkeep, he said. Some of the facilities—such as the Crown Street Garage—have years worth of deferred maintenance, requiring millions of dollars of needed repairs.

DeStefano also argued that private operators “who specialize in parking are able to maximize revenues” better than government can, not just through rate setting, but by managing better. That’s in part because some of the operators have broader experience, managing parking facilities nationwide.

The policy question—whether or not to keep owning garages and lots—matters because merely selling off city property to plug a budget hole is generally considered short-sighted. Bond rating agencies frown on the practice, for instance. It’s considered a way to fix a problem in the short term while eliminating the ability to make money or strengthen a community in the long term.

“One-time revenues are never great ways to balance the budget. But if this is part of a long-term agenda where we move away from controlling these types of services, I think that’s fine,” State Rep. Roland Lemar said of the idea of unloading the parking facilities. “I don’t see the need for municipalities to own parking garages. We should be encouraging folks to get on trains, get on buses, walk and bike.” In some cases, such as a train station garage, it may make sense to maintain public control in order to serve a public purpose like keeping rates low enough to encourage rail commuting, he argued.

Selling the surface lots especially makes sense, Lemar said. He said he’d like to see private builders put tax-generating, neighborhood-knitting homes or stores or businesses there instead.

He mentioned the Pulaski lot across from Goodfellas restaurant on State Street as an example.

“That’s an incredible development opportunity to really knit together State Street from downtown through to the CT Transit bus” building, Lemar said. “It serves as parking lot for some businesses. Its best use is as a mixed-use residential-commercial site, continuing foot traffic up and down the street and active bus runs.”

DeStefano said the city has previously looked into selling that lot. “It’s very narrow,” he said. The city couldn’t find a buyer.

Melinda Tuhus File Photo Matthew Nemerson (pictured), who chairs the parking authority board, disagreed with the idea that the question is whether public or private management works better at parking facilities. It has more to do with how high to set rates and the nitty-gritty of whether sales make long-term financial sense on balance, he argued. Can the city make more money taking cash from a sale and reinvesting it, for instance, than it could holding onto the facilities and continuing to take in parking fees?

“If you look around the country, you’ll see that parking authorities are looking at which garages to hold onto and how to develop the best revenue streams. So it’s totally logical to look at that,” Nemerson said.

“It is not a public-private issue. Our investigation around the country is that that’s simply not the issue at all. The real issue is parking rates and who should be setting them. In a town where you have public control of rates, where it has to go through the city council, rates tend to be lower. The real issue ultimately is rates.” Private operators set rates at the highest amounts they can receive in a specific spot. Cities like New Haven sometimes set standard rates for the whole system, whether or not certain facilities can command higher fees than others. Or they choose to keep rates lower than the market maximum for other reasons—like inducing people to come shop downtown.

Nemerson said the authority is about to begin $8 million in repairs at the Crown Street Garage.

“The conventional thinking is that the public sector doesn’t have to make a profit [so it would] put more of its money” into structural repairs, he said. “These are concrete boxes which have cars in them which leak oil and salt and are part of the New England weather cycle. They look strong. But as we know, they’re very fragile. As we saw with the Coliseum garage, maintenance and design are hugely important.”

Comments

posted by: anon on January 10, 2011 8:33am

Removing the redundant and useless Exit 3 off-ramp onto Trumbull Street, which dramatically devalues the entire neighborhood, would make that State Street lot more than wide enough for massive new development.

The removal of the ramp, even just the off ramp section coming from I-91 south, would more than pay for itself in terms of new revenue and real estate development in that area.

Rather than focus on massive, overwhelmingly costly downtown projects like Route 34, this is a good illustration of how the city could take a smaller scale approach to urban redevelopment.

posted by: Question? on January 10, 2011 8:49am

What will DeStefano sell in 2012 to balance the budget after he’s re-elected?

posted by: answer on January 10, 2011 9:23am

The answer: New Haven’s middle class.

posted by: Idea!! on January 10, 2011 9:44am

How @ we just sell off DeStefano instead??!!

posted by: robn on January 10, 2011 10:45am

The city could just bond the revenue stream of the parking garages and not the asset itself.

Then again, it might make sense for the city to get out of the parking business so that private market can set rates at what the market will bear (and thus incentivize bicycling, carpooling and public transportation.) However, that could backfire if one company gained an effective monopoly, price gouged and dampened downtown business.

In any event I agree with Roland. The city should relook at strategic sites where parking lots can be developed as habitated property. Its a shame that the Landino project across from COOP never went forward. Theres a tremendous amount of potential there.

posted by: Cedarhillresident on January 10, 2011 11:00am

can I get it for $1.00?

posted by: Pedro Soto on January 10, 2011 11:45am

Robn, I agree that it’s a shame that the Centerplan/Landino project never went anywhere. i think the project overall was a sign of an overblown property market (luxury boutique hotel plus luxury condos in a titanic building). The downside of that was the loss 5 local businesses and the best dive bar in the city (ok, maybe that one wasn’t a huge loss).

I also agree that selling off the smaller lots (especially State street HINT HINT) would be a great move for the city. I know that several lots have been available for interested parties but haven’t attracted much in terms of appropriate proposals. The smaller lots however I think longer term will eventually sell once the market starts moving again.
Right now it makes little sense to build new when buildings are a relative bargain, so it might be a while for these lots to be filled in.

Anon, I agree with you on the I91 state street entrance. Not only is it useless, it’s also incredibly dangerous. There are an incredible number of accidents due to it’s illogical layout and poor sight lines.

I don’t think that removing exit 3 in its entirety is ever going to happen, since as it stands now it’s a major exit for the city. The problem is that exit 2 only serves I95 South and 91 South, and not 91 north. The problem is that as designed, Trumbull street is the major funnel for northbound traffic for the morning commute. All of the other exits along the way are short and jam up easily except for Trumbull st. Getting rid of 3 would be very difficult without redesigning the other exits.

However, I think that getting rid of the northbound entrance has a ton of merit and should be looked into. The state would save money and the city would gain a developable lot. It doesn’t solve the problem with the overpass and ramp that divides state street, but it would definitely start to knit together the two sections.

posted by: Jeffrey Kerekes on January 10, 2011 11:51am

If we consider selling assets, it should ONLY be to pay off debt and/or liabilities only, not to close budget shortfalls.

posted by: robn on January 10, 2011 12:56pm

JK,

Ditto

posted by: kevin on January 10, 2011 5:43pm

Pedro, you misread anon’s post. He proposes to remove “the redundant and useless Exit 3 off-ramp onto Trumbull Street.” This is a seriously bad proposal, since it would require drivers going south on I-91 to make lengthy detours through East Rock via exit 6 or 4 to get to the southern half of the neighborhood or to Yale. Your proposal makes more sense, although it would lengthen my commute and those of others who live on Bradley and Pearl Streets.

posted by: Brainiac Patrol on January 10, 2011 7:36pm

These guys are brilliant.

First they announce a new storm water authority that will be specifically targeting parking garages for the highest charges.

Then after the announcement of the storm water authority they try to sell a bunch of garages.

posted by: Cedarhillresident on January 10, 2011 9:48pm

Pedro the only issue with that is it is one of the most busy entrances at 5:00

And I am guessing once the downtown ones are closed….(because they are building on it) all of the ones you harve mention will see a major increase in traffic.
but I totally agree about the state street entrance ramp being dangerous..I have been in a crash there with my father. They need to tweak the orange street ramp signals so that there is a gap for people on that ramp to get on.

posted by: Brain Surgeon on January 10, 2011 11:47pm

Brainiac Patrol

You forgot to mention that Executive Director William Kilpatrick acknowledged in the story that the parking garages have “.... years of deferred maintenance, requiring millions of dollars of needed repairs”. So the city’s parking garages are probably worth nothing as they are about to collapse. Good time to sell them off to some private company who will be so stupid they’ll pay top dollar for them.

It’s now time City Hall put all its top talent on working out how much taxes will need to go up instead of making up stories like this to trick the voters into believing there’s an easy way out.

I reckon property taxes will need to go up 25% to 33% this June to pay for City Hall’s follies. If it gets put back till after the mayor is re-elected a 40% to 45% hike can be expected in 2012.

posted by: NHTaxpayingDemocrat on January 11, 2011 8:18am

Creating sustainable jobs is the most crucial element affecting New Haven at present. Why trade off a fiscally viable, recurring revenue stream for a short term fix? Who is to gain? Let’s ask the patrons who park regularly in the facilities. Will they appreciate the rates that have increased at the properties transferred into private ownership (see Chapel Square Garage underneath the Omni, compare Coliseum rates with Union Station)?
Will the employees be New Haven residents and earn a wage decent enough to feed their family? Check the standard attendant wages of ProPark and Central Parking. Can one foresee tax revenues exceeding the millions of dollars per year being asked by the Parking Authority being paid to the City via private ownership?

posted by: Don't Do it! on January 11, 2011 11:32am

this is insane and the Board of Aldermen better not approve this! Take a look at the Parking Authority’s finances—these parking lots actually make money for the city every year. They’re not a burden—they produce cash. they could produce more if the rates were raised, which will certainly be the case if they are privatized like the Mayor wants. The Parking Authority is actually pretty well run these days—not like in the old days when it was run by hacks. Selling these garages for a short-term injection of money is short sighted and robs the city of a pretty lucrative revenue stream given that these lots are paid for. This is another example of DeStefano taking a short term view because he won’t be around to deal with the aftermath.

posted by: Not True! on January 11, 2011 11:42am

Brain Surgeon:

Maintenance costs are another false issue. While Crown Street does need maintenance, that money is coming from Parking Authority revenues becuase they budget for it! All the other garages are in good shape becuase the maintenance is budgeted for on an annual basis. If the city ran these garages, you could bet your ass that no money would go into maintenance and they would be crumbling becuase they city would be putting it off every year until something happened—like a falling chunk of concrete. That’s not the case now,the garages are in relatively good shape. Look around the garages, there is maintenance going on throuhgout the year. Nemerson is right that this whole question comes down to rates and and what level they are set.

posted by: anon on January 11, 2011 1:36pm

Kevin: there are costs to any proposal. In this case, the benefits of removing Exit 3 greatly outweigh the costs. If you just drive through you might disagree, but any reasonable analysis of the increased land values and new land created by Exit 3 would show that the current configuration is a massive drain on city coffers with limited benefit. Exits 1, 2, and 4 have more than enough capacity to handle the changes that would result, particularly if the city paid increased attention to neighborhood traffic calming and demand management strategies.

You may like the status quo, but the current system was the result of a hugely damaging 1950s urban renewal strategy that killed our city. It is time to take back our future, not leave it in the hands of those who are content with an unsustainable death spiral.

posted by: anon on January 11, 2011 2:20pm

Brain Surgeon,

A 40% tax hike is not even remotely possible because renters and owners in New Haven simply could not afford it.

A better solution would be a massive, across the board cut of salaries and benefits for city staff, combined with some layoffs and even elimination of certain services (some of which could be privatized). City workers who actually live here could receive a homeowners or renters benefit to make up for some of the lost salary. This would help encourage employees to live here and firm up the real estate market (like what Yale does), thereby reducing future tax increases.

posted by: someoneelse on January 11, 2011 4:20pm

anon - are you a traffic engineer? your offhand suggestion that exits 1,2 and 4 have the capacity to handle traffic increases with exit 3 removed would suggest not. ... Did you not notice the traffic chaos throughout east rock (particularly on orange st, a heavily pedestrian and cycle transit route) when exit 3 was backed up by the bridge repair at Trumbull and Prospect?
...

posted by: Paul Martin on January 11, 2011 6:41pm

If this sale happened, would the buyers be able to eventually knock the garages down and put in residential-retail buildings?

There have to be better uses for these spaces than parking garages - as Rep. Lamar points out.

posted by: anon on January 12, 2011 11:24am

Someone, there was chaos at first, but drivers quickly adapted (as they have everywhere else that exits, or even entire highways, have been closed). The minor chaos is a small price to pay for millions of dollars per year in increased tax revenue for our city.

By the way, if you want a traffic engineer to decide the fate of the city, take a step back and read the ConnDOT op-eds in the NHRegister from when they were beginning construction on the East Rock Park connector, which, like Exit 3, destroyed a large section of the city and has resulted in plummeting tax receipts in that area (luckily, only a portion of that connector, at Exit 6, was built- the part that would have completely destroyed the park was stopped by non-traffic-engineers).

posted by: Very True on January 12, 2011 1:20pm

Not True!

You are correct. The question does come down to rates and what level they are set. If maintenance has not been done then rates will go up to pay for it and business will flee. The management at United Illuminating are not stupid. They saw this coming. With a local sales tax being talked about I’m sure IKEA are considering their options right now. New Haven must compete with surrounding towns. With sky high taxes a few good restaurants and pretty old buildings won’t cut it.

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