New York City officials are calling on investment bankers to help find ways to extract more revenue from city assets, including its parking meters and garages, real estate and infrastructure, while reducing costs.
In a request for expressions of interest on its website, the city Economic Development Corp. seeks ideas on how “to develop new sources of revenue” and restrain costs, as officials confront a projected deficit of almost $5 billion, or 6.8 percent, of an estimated $71.6 billion fiscal 2013 budget.
“We’re seeking a partner to help us reduce costs or bring in revenue and one area is parking meters,” said Marc LaVorgna, a spokesman for New York Mayor Michael Bloomberg.
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 the pressure of rising labor costs and insufficient revenue.
New York City’s treasury reaped more than $140 million in 2010 from its 49,989 parking meters and 48,854 “muni-meters,” which issue a receipt to be placed on the dashboard, according to the city’s Management and Budget office. The city collected about $575 million in parking violation fines last year, the budget office estimated.
“We are not going to sell assets in return for money that we spend on balancing the budget,” Bloomberg said today during his weekly appearance on WOR radio. “We’re not going to turn over the right to set parking rates or set the fines or that sort of thing, but installing and maintaining equipment, there’s nothing magical about that.”
Bloomberg’s budget for 2012 includes increased rates of $3 an hour from $2.50 in commercial zones, and $1 an hour from 75-cents in residential areas above 86th Street in Manhattan and the city’s four other boroughs. The plan calls for generating revenue by converting six city-owned vacant lots into “privately run parking lots.”
Parking in most parts of Chicago costs $1.50 an hour, with the exception of the central business district outside the Loop, where motorists pay $3 an hour and inside the Loop where it costs $5 per hour from 8 a.m. to 9 p.m., and $2.50 at other hours.
LaVorgna said New York City officials want to avoid repeating the experience of Chicago, where drivers will pay a Morgan Stanley-led partnership at least $11.6 billion to park at city meters over the next 75 years, 10 times what Mayor Richard Daley got when he leased the system to investors in 2008. The city gave up billions of dollars in revenue when it leased its 36,000 meters, the third-largest U.S. system, for $1.15 billion, Alderman Scott Waguespack said in an August interview.
In its request, New York says it wants bankers and financial firms to offer ideas “to enhance the efficiency of services the city provides” and to “develop new sources of revenue and/or relief for the city from future operating and capital obligations.”
The document cites “city parking assets including on-street meters and off-street lots and garages,” real estate, “including management, revenue generation and use proposals for new construction and existing city assets,” and infrastructure such as transportation facilities.
The request is “deliberately vague” to attract the widest variety of proposals, LaVorgna said.
The document gives applicants until March 2 to request more information. Proposals must be submitted by March 11.
The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.