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November 28, 2022
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The Parking Economy - Too Late to Prepare?
Updated On: May 02, 2018

For the parking business, particularly in New York, the parking market has been generally reactive to the financial swings.  As financials markets domestic and abroad struggle to find their footing in consistency, the trickle down of this struggle affected many industries in stages. However, for New York parking, a period of anxiety prior to this financial unrest should have alerted owners to be equipped with a format that protects and maintains its revenue stream.  Where it was rare for some industries that had the foresight to prepare with anticipation of a trickle down effect, others suffered greatly, not excluding the New York parking market.  It would seem that a logical prudence to shield one’s company from an outside collapse should be a formulated tactic, it is however not always the case nor did anyone expect a collapse of this magnitude.  Preparation of this nature especially during strong financial times requires tough decisions, which may not be popular, can disrupt the status quo and may leave negative residuals that can hamper future progress. 

While there was a weary eye for the concerned proprietor and the work force behind it, it did not prompt an all out push to plan for a major down time. Both sides had much to lose in an industry where the declining volume of consumers can spell very big losses.  This decline was not immediate and was actually known about before the financial collapse. 

Adaption to this reality was not necessary prior to the Bloomberg administration where there was still a strong amount of vehicles entering the city and garage locales were being purchased or leased at a healthy pace.  But Mayor Bloomberg’s 2007 campaign to set congestion pricing, add bicycle lanes and build pedestrian plazas that cut through city streets ignited counter measures by parking companies and their lobbyists. A focal point of studies produced by the opponents of the Mayor’s congestion reduction plans have shown that traffic into the Manhattan had actually declined in recent decades negating the need to further implement congestion plans.  However this reaction by parking ownership came only after the threat of these traffic reduction efforts became serious.  If such an indication of a declining volume was evident than why the wait to start to prepare?

A strong consortium of industry insiders did not present itself prior to the announcement of congestion pricing and city traffic lane eliminations.  As the housing market imploded many were ill prepared to handle the aftermath but even fresh from their fight against Mayor Bloomberg’s plans, no clear strategy became evident to address the declining volume.  Had one been developed when the decline was identified, the housing bubble and the other snowballing factors could have curtailed the shortfall even if to a slight degree.    

There were measures to combat losses of revenues but none that appeared radical in application or approach.  These methods have included but not have been limited to requests for reductions or alterations to their leases, constant modulation of monthly rates, cuts in payroll and a scaling back of operational expenditures.  Some companies tried to tap into the green market, such as offering charging stations for electric vehicles and in some rare cases offering lower transient rates to electric and hybrid vehicles.

In a New York Times article in February 3rd, 2012, Vincent Petraro, executive director of the Metropolitan Parking Association, which is an industry group for New York Parking Operators, stated that “The industry faces the reality of fewer cars coming into Manhattan, a weaker economy as well as higher rents, higher real estate taxes, and higher insurance costs.  Because of this, it is becoming more and more difficult to maintain profitability.”  In 2012, the general pulse of the industry was as Mr. Petraro stated above. 

The inevitable solution lies in evolution.  Some companies are gradually shifting into corporations from private ownership.  Whether this is positive or negative step is a variable opinion.  What is fact is that in order to survive, changes must be accepted and dealt with.  How that will be done, only time will tell.

By Rolando Feliz, Local 272 Web Manager

Teamsters Local 272
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