The businesses that are imploring the City Council of Los Angeles not to turn over city-owned parking garages to a private-sector operator are making a sound case.
I mean, they’ve gotten my attention. I was a sell-all-parking-garages-ASAP guy. Now I’m a fence-sitter. But I’m listening to the side that’s complaining.
I wrote in this column last February that the city should get out of the parking business. The city loses lots of money running garages, even in such busy places as Hollywood and Westwood. Why? Because the city intentionally gives customers a break, charging them, say, $3 or $4 to park for a few hours while the market rate would be two or three times that.
That’s fundamentally immoral, I wrote back then. “The city is subsidizing those who park in city garages at the same time it is looking to lop off a thousand or more employees and chop services.”
By selling long-term leases to a handful of garages, as the city now seems poised to do, the city could get up-front money. What’s more, it would stop the constant drain of dollars by operating the garages at a loss. Taxpayers would benefit.
Beyond that, it would be good to stop forcing taxpayers to subsidize favored districts with low-cost parking. For that matter, the subsidized lots have likely inhibited the creation of new parking space. Would you open a garage anywhere near a city-owned one that offered $3 parking?
I still believe all those arguments. Like I said, I’m a fence-sitter, not a full convert.
However, the businesses and business districts that oppose what amounts to the sell-off of city garages have made several excellent points that hit home in a real-world way, as you can see in the article on Page 1 of this issue and in the LABJ Forum below.
A main argument is that any private-sector operator will have to boost parking rates, perhaps dramatically, which may well sour shoppers. It could throttle some businesses.
Who can deny that parking rates have a profound effect on consumer choices? I will, for example, choose a restaurant with $2 parking over one with $20 parking, even if I know the dinner bill will be $30 more.
Competing shopping areas such as Santa Monica and Beverly Hills have subsidized parking, so any shocking increase in rates could hurt Westwood and Hollywood.
Leron Gubler, the chief executive of the Hollywood Chamber of Commerce, wrote in an op-ed in the Business Journal last month that when the Hollywood & Highland center opened in 2001, “the $10 parking rates discouraged visitors and nearly killed the center.”
But now that thriving center, along with the many retailers in that area of resurgent Hollywood, have greatly helped Los Angeles recoup tourist appeal. And that revival has been fueled in large part by cheap parking.
Indeed, a kind of compact has developed between the city and the business community over the years. The city agreed to provide cheap parking, which helped businesses, particularly retailers, by encouraging foot traffic. The low-cost parking was taken for granted by businesses; that assumption flowed through the local communities in all manner of ways – lease rates, business sales, pricing decisions. To end that compact now is cruel; it yanks the rug from under the businesses that grew up around the city’s parking garages.
From City Hall’s perspective, the sale of garage leases may be a penny-wise move that could become pound foolish if it causes economic distress in business districts – including some of the city’s most important ones. A sale of the leases could end up costing the city more than it takes in.
Look, the city needs money and in my opinion it should find the exit from the garage business. So a sale of some kind makes sense. But at the same time, I recognize that lots of businesses – and some important districts – have come to depend on low-cost garages.
So let me ask what any dedicated fence-sitter would: Isn’t there a compromise here?
Charles Crumpley is editor of the Business Journal. He can be reached at email@example.com.
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