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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
Air Rights garage.
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.
Air Rights garage.
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.”
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.