New York City is giving private operators until July 31 to show their interest in running the biggest U.S. municipal parking system.
In a request for qualifications issued today, the Department of Transportation offered an opportunity to compete for “a potential private management agreement” to oversee almost 90,000 parking spaces across five boroughs.
New York officials have set up the competition as they confront a deficit of at least $3 billion in a projected $72.4 billion fiscal 2013 budget. Cities around the U.S. have begun to view their street curbs as assets. They’re installing meters, sometimes equipped with devices that adjust rates higher during times of peak demand, to deal with rising labor costs and insufficient revenue.
Since the idea of private meter operation arose last year, New York officials have said they want to avoid repeating the experience of Chicago, where motorists may pay a Morgan Stanley- led partnership at least $11.6 billion to park at city meters over the next 75 years, 10 times what former Mayor Richard Daley got when he leased the system in 2008.
“We are taking a careful and deliberate approach to avoid mistakes others have made,” Wood said. New York would retain “full control” of rates and violations enforcement, she said.
Metered parking in Manhattan below 96th Street costs $3 per hour, according to rates posted on the Transportation Department’s website. Fees are higher for commercial vehicles and in some congested neighborhoods such as Greenwich Village, where motorists pay $5 for 60 minutes from 6 a.m. to 10 p.m.
The city’s parking revenue increased 6.3 percent to $156 million in 2011 compared with 2010, from traditional meters and Muni-Meters, which accept credit cards and issue a receipt to be placed on the dashboard, according to the city’s request for qualifications. Net earnings, after expenses, increased 12.8 percent to $93 million in that period.
Officials expect the system’s revenue to increase 22.8 percent this year as the city raises rates and moves from mechanical meters to Muni-Meters, allowing for more parking spaces, the city document said. Next year, transportation officials predict another 6.3 percent increase, with revenue reaching $204 million, the request states.
The city will also collect about $518 million in parking fines this year, the budget office estimates.
Minimum qualifications for operators include running systems of at least 100,000 spaces, 20,000 of which must be on- street, and the financial capacity to post a $100 million letter of credit or cash collateral, enough to guarantee at least one year of net revenue for the system, according to the city request, which was posted on the Internet today. Responses are due July 31.
Technology-based amenities such as pay-by-phone may be part of the system, Wood said.
The idea was first proposed more than a year ago, when the city requested bids from financial advisers, and selected Greenhill & Co. (GHL) in July.
Indianapolis approved a 50-year agreement in November 2010 placing Xerox Corp.’s (XRX) Affiliated Computer Services in charge of managing and collecting revenue from its 3,600 parking meters. The Indiana city agreed to accept a smaller upfront payment so that it could retain a 30 percent stake in future revenue and also has the right to buy out the private operator, Michael Huber, deputy mayor for economic development, said in an interview last year.
New York’s mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.
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