April 20, 2014

Columbia officials weigh privatizing city parking garages

Columbia city government is looking into privatizing its 10 parking garages and the two the city is contracted to build for the Bull Street neighborhood.

Columbia city government is looking into privatizing its 10 parking garages and the two the city is contracted to build for the Bull Street neighborhood.

City officials are preparing to seek proposals from private partners, including for the Bull Street garages, within a couple of months, Mayor Steve Benjamin and assistant city manager Missy Gentry said. The garages for the vast Bull Street neighborhood are projected to cost taxpayers between $24 million and $26 million together, according to estimates from the city’s chief financial officer.

“The goal is to have a system that easily pays for itself and also helps facilitate business growth,” Benjamin said of privatization. “Let’s ask folks, ‘Are you interested in partnering with us this way?’ ”

City Council would have to approve such a major change in parking practices. Benjamin said he and city staffers have been discussing privatization for a couple of years.

Columbia’s 10 garages have been revenue producers for the city during the past three fiscal years, according to figures supplied by its Parking Services Department. The net revenue after expenses totals $1.3 million for 2011-2013, the figures show.

But the city’s certified annual reports for those three years disagree with those figures. The reports show deficits totaling almost $2 million in the Parking Facilities Fund in fiscal 2011 and 2012. The shortfall in 2011 was $813,977, while the deficit in 2012 was $1,173,699, according to the certified reports.

Chief financial officer Jeff Palen said the larger of the deficits is attributable to a loss the city incurred when it sold property to the University of South Carolina’s Alumni Association for its new center in the Vista. The city kept a portion of the land for the city parking garage that serves the Columbia Metropolitan Convention Center. But the city still lost almost $2.7 million on the sale, according to figures released by parking services director John Spade.

Another difference between the department’s figures and the certified figures is that the latter are adjusted for debt payments on money borrowed to construct garages, Spade said.

The city has two garages yet to be built.

City Hall’s contract with Hughes Development Corp. of Greenville calls for two 800-space garages on the 165-acre site of the proposed Bull Street neighborhood. Palen has told City Council the first garage is projected to cost $12 million in public money; the second, almost $14 million, depending on construction costs when it is built.

Gentry said more recent estimates reduce that $26 million total even if the garages are built by the city. She did not say how much lower.

Benjamin said privately built garages could reduce the amount of public money going into the vast neighborhood, which many Columbians already criticize as receiving a sweetheart startup deal for infrastructure at taxpayer expense.

Gentry and Spade said they are exploring various privatization plans that range from a company building but not operating garages, to a longer-term arrangement – perhaps 20 to 25 years – that would have the private firm build and run the garages until they earn back their initial private investment. After that, the garages could be returned to the city.

Several private providers have expressed interest in the idea, Gentry said. The first move would be for the city to evaluate the qualifications of private companies as well as their suggestions on what they are willing to do.

“We’ve gotten literally well over a dozen ideas on how you can make our parking more efficient,” Benjamin said of companies that have shown interest. “Some are impressive. Some are not impressive.”

He said city leadership needs to decide the extent of private involvement it will support.

The beauty of privately constructed garages is that “they’ll be debt free when we inherit them,” Spade said.

His department is testing privatization of garage cleaning services now, he said.

“We don’t have the staff to keep them clean to the standard we want,” Spade said. A local company has been sweeping the city’s largest garage, the 1,006-space garage at Lady and Assembly streets, four times a year.

A parking consultant already has been hired to study garage operations as well as parking rates, payment methods, street parking and the organization of the department, he said.

The department also is in talks with the University of South Carolina on better ways to handle spillover parking for major events at the Colonial Life Arena and other activities that attract large crowds downtown, Spade said.

Another possibility is cooperating on meters that can be fed from mobile phones, Spade said.

Benjamin said he’s interested in automation of payment systems.

“I would love to take up (remove) parking meters” to get customers to use garages more, Benjamin said.

Final recommendations from the consultant are due in late summer, Gentry said.

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