National Post 2010.01.18. An article in Monday’s Post included a very short mention of the possibility of monetizing an operating contract for Toronto Parking Authority assets to raise money for a broke Toronto:
The city's wholly owned parking operations generate about $55-million in profit every year. The blue-ribbon panel provided estimates, still considered accurate, that say anywhere from $200-million to $500-million could be made if the operating contract was monetized over a period of time. There are also 150 parking lots, such as the City Hall garage or the Dundas Square garage, that could be sold.Chicago did this a short while ago. Raised an obscene amount of money for that city. What happened? The new operator (no fool, he), raised prices, extended hours and generally found a way to shorten his ROI, all the while shoveling Dave Driver’s doubled dough into his shareholder’s pockets.
The Toronto parking asset is worth much more to us who live in the city if left in the city’s hands and re-priced to market value: prices made variable, raised to hit 15% vacancy, hours extended to 70% vacancy, and spread the good cheer to all the streets that are unpriced, underpriced, abused, tire-marked, and only occasionally enforced.
If the City currently generates $55M net as this article claims, then the City’s gross revenue would be on the order of 150-160M given that municipal parking operations (when they are as badly underpriced as they are in Toronto) consume between 60% and 70% of revenue. If pricing were doubled (Toronto needs this to control congestion), and the operator kept hours and enforcement the same, the operating profit would be more like $210M – a far cry from 55M. Suddenly the asset would be worth between 800M and $2B, using the same multipliers as reported, since the new revenue all go to Toronto’s bottom line.
Either way Mary Motorist pays 50% of current garage fees instead of 25% (still a steal), but my way the city (and its citizens) get the benefit. The Chicago method that the Post’s article contemplates means that some company’s shareholders get your dough instead.
And all this because City Council does not understand markets and arrives at work without courage.
Folks, it’s our city. Parking is about to get more expensive. Where should the money go? To our starving, pot-holed, Metropolis or to somebody's rich uncle?
Keep GreenP, and raise prices to market value.