Orr says Detroit's parking system losing money, considering sale

Aug 28, 2013

The Detroit News reports that Kevyn Orr is considering a sale of the city's parking system.

Michigan Radio's Sarah Cwiek is looking into this story further and will have more later.

Parking systems can be a source of revenue for a city, but according to the News, Orr says the system is losing money:

The city’s projected parking revenue this year is $12.9 million but expenses are forecast at about $19 million, according to Orr.

“The city intends to market its parking-related assets to private operators through a sale, long-term lease or concession arrangements (and shutter the related departments) and use any proceeds that may be received to pay down $10 million in related special revenue debt,” Orr told creditors in a June proposal.

The emergency manager said any deal could take about six months. If not, cuts are possible, he said.

The piece points out that Detroit has some of the cheapest parking rates around. Detroit charges $1 an hour at meters, while Chicago charges $5.75 an hour.

Regardless of whether a sale takes place, experts say parking rates are expected to go up in the city - which isn't necessarily a bad thing according to one parking guru.

Reporter Shawn Allee looked into higher parking rates in Chicago and how that might impact local businesses. He spoke with Donald Shoup of UCLA:

“The higher prices that drive away some people will attract other people who are willing to pay for the curb parking if they can easily find a space. Well, who do you think will spend more in a store or leave a bigger tip in a restaurant? Somebody who will come only park free or someone who’s willing to pay the market price for parking if they can easily find a vacant space?”

Shoup told Allee that cities often make parking too cheap.

Like higher gas prices, Shoup said people initially complain about higher parking rates, but eventually fork over the extra money.

In Detroit, former-council-member-turned-chief-operating-officer Gary Brown said if the parking system were restructured, it could bring in $2-3 million in revenue for the city.