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City revamping management of parking operations

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New parking meters—and higher fees—are likely as a result of Indianapolis' efforts to revamp management of its parking operations to generate additional revenue for street and sidewalk repairs.

The city is set to release requests for qualifications from private operators interested in entering a long-term agreement to manage parking. The final deal should net the city tens of millions of dollars, said Michael Huber, director of the Mayor’s Office of Enterprise Development.

Huber declined to provide an exact date for the release of the proposals but said it would be “soon.”

“We’re trying to create a more efficient parking system that manages all of the downtown parking assets,” he said. “Many of the garages, lots and certainly the meters could be more efficiently managed by one team.”

Indianapolis currently operates a hybrid model, in which locally based Denison Parking handles meter enforcement, while city employees handle meter maintenance and coin collection.

The Indianapolis Capital Improvement Board operates the Virginia Avenue parking garage and the surface lots where Market Square Arena once stood. And REI Investments runs the Circle Block garage near the Conrad Indianapolis hotel.

Under the proposal, management of the city's 4,000 metered parking spaces and 10,000 off-street spaces would be wrapped into a single, long-term lease.

Huber also declined to divulge the expected length of a lease said it would be long enough for the chosen operator to recoup its investment in new parking meters it would install as part of the agreement.

Multi-space meters that accept credit-card payments and a variable rate structure likely will be part of the deal, which makes sense to Michael Simmons, co-founder and CEO of Indianapolis-based T2 Systems. The company makes software to manage the enforcement and collection of parking violations, including in Indianapolis. 

“The city’s meter infrastructure is in need of a significant upgrade,” he said. “Finding an outside entity who is willing to provide that upgrade, for a concession, is similar to what a number of cities are looking at right now."

Indeed, Chicago netted more than $1 billion in 2008 by leasing its 36,000 parking meters to a private firm for 75 years.

IBJ reported in July that the city was considering several options for modernizing its parking meters and generating more revenue from parking. At the time, city leaders were evaluating proposals from firms interested in handling parking meter management.

Parking meters already add more than $3 million per year to city coffers. One potential bidder told the city this summer that it could double or triple that—or generate a lump sum payment of at least $100 million through a long-term lease.

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  • Giving Up Long-Term Profits for Short-term Gain
    There's no such thing as a free lunch, but it sounds like Indianapolis officials think there is.

    What can private firms do that the city itself can't do? The answer is: Nothing.

    They can borrow to get new parking meters. So can the city.
    They can maintain parking meters. So can the city.
    They can do parking enforcement. So can the city.
    They can raise rates. So can the city.

    So why look to an outside contractor? Two answers:
    (1) A one-time payment. The city could get the same thing issuing revenue bonds backed by parking meter/lot revenue.
    (2) Avoiding heat for local politicians by letting the private firm raise rates, while the local politicos are able to say, "We have no control over the rates ..."

    The problem, as another commentator has noted, is that the private contractor is going to have to make a significant profit on the deal.

    So the city will make less than it would otherwise, and people parking downtown will pay a lot more than they would otherwise.

    It's a bad deal for the city, and a bad deal for the citizens. It should be scrapped.
  • Another City Rip Off
    Parking? What's this new company to do when the government shuts down the street meeters for politicos? I have driven past closed city lots many times trying to find a parking spot, but the city doesn't open lots on the weekends. Any company that takes that bid is going to loose money, the city won't be able to take their hands off all those spots and let the private opperator make anything. I wouldn't do business with those theiving scoundrels in the capital building.
  • Beware of third-party parking mgmt.
    Watch out, Indianapolis. Chicago did indeed net a one-time windfall from leasing their meters to a private company, but the firm has jacked up rates (twice), and now one hour of street parking can cost as much as $4.25 in Chicago! Check out this article for details: http://www.chicagotribune.com/news/chi-parking-meter-rates-increasedec31,0,3044979.story

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