Scoop Investigation: Parking Mad in Wellington
Parking Mad in Wellington
By Kevin List
When asked by the Dominion Post early this year why the Wellington City Council couldn't have made enough money from three council owned car parking buildings to justify keeping them, incumbent Mayor Kerry Prendergast replied:
"There wasn't the political will or backbone to put up prices."
After managing to sell the James Smith parking building for $16 million dollars to Manson Developments late last year the same building was on- sold by Manson developments early this year for $21 million dollars – a cool five million dollars profit.
Given the Mayor's insistence to the Dominion Post that there was no political will to put up parking charges in the publicly owned car parking buildings, Scoop wanted to know just how the council managed to grow a backbone and double car parking fees throughout Wellington a few months later.
This question seems particularly
- The value of a parking building is directly related to the level of income it earns, i.e. increase the revenue by $1 an hour or 30% overall and the building's value goes up by 30% (I.e. from $20 million to $27 million);
- The charges levied for parking building carparks have in the past moved up with on-street charges, typically with the off-street increases coming slightly after the on-street increases.
Parkers wishing to avoid four dollar per hour on-street parking will pay six dollar per hour at this Wilson parking building near Mobil on the Park.
On the face of things it appears that the Wellington City Council has effectively privatised a publicly owned cash cow and then quickly moved to effectively double the value of this cow to its new private owners.
Scoop wandered down to the council and had a chat with Wellington City Council parking guru Wayne Tacon and learnt among other things:
- The council has received some letters (very few) of support from presumably incredibly rich shoppers that don't mind paying exorbitant car parking charges because they can always get a park now;
- It doesn't matter if shop-owners business is affected by the increased charges because shoppers will return (probably);
- Anyway the private carparking companies aren't awash with buckets of money because of the war in Iraq;
- And, the public of Wellington's brains can't handle dealing with the concept of $2:50 per hour. It is much easier mathematically to come to terms with $4 dollars per hour apparently.
Who Voted For The Increase? - Nearly Everybody
According to the Wellington City Council –
The vote for the parking increase was 17-1 with Bryan Pepperell the only councillor voting against. Councillor Parkin put in an apology for the meeting, and Councillor Baber was out of the Council chamber when the vote was taken.
Scoop Interview With Wellington Parking Guru Wayne Tacon
Scoop: Listening to Radio New Zealand the other day it was implied that Wellington has the most expensive on-street parking in the Southern Hemisphere - is that correct?
Wayne Tacon: Auckland has been four dollar an hour for – I couldn't actually tell you how big an area though – for I think at least two years.
Scoop: I understand that the area [that is four dollars] is a very small area in Auckland. Wellington has a large area now that is four dollars an hour. According to Radio New Zealand,, Sydney and Melbourne's parking was about $1:50?
Wayne: The only information I've got is that depending on where you park in Sydney you could be looking at between eight to twelve dollars an hour.
Scoop: Besides Sydney then?
Wayne I wouldn't have a clue. I struggle to believe that…
Scoop: Have you done any [comparative] studies?
Wayne: No…but I'm not sure whether it is particularly relevant what another city charges though.
Scoop: Have you done any studies showing that the streets around town are too blocked – particularly the streets where parking used to be $2?
Wayne: I think parking is just part of a big overall picture. We are doing a lot of work on a transport strategy. An option could be we need to take out parking altogether and maybe look at putting in an extra traffic lane. You may be aware of a gentleman called Jan Gall who has got a lot of ideas about what makes urban form attractive.
Scoop: Just getting back to parking prices?
Wayne: It is linked overall to transport though. Depending on where we go philosophically - there's pressure on to say don't put parking in at all.
Scoop: I guess where I'm coming from though is - there were a lot of places around town that you could always find a park, day or night, and were in the two dollar parking range. These are now four dollars. Did you look to see whether there was a congestion problem there?
Wayne: I think you need to look at why we do parking. We do parking fees both for turnover and the cost of the infrastructure. I think we spend $45 million dollars on roads and infrastructure per year. We have to fund that as well.
The James Smith parking building now operated by Tournament states on the outside that parking will cost the customer three dollars per hour – however should you take one hour and one minute you will pay six dollars.
Selling Publicly Owned Parking Buildings For A Song
Scoop: I also read in the Dominion Post that there was some hesitancy among the council regarding increasing parking fees in the publicly owned parking buildings – by enough to make them financially viable?
Wayne: The reason we sold the parking buildings was when we analysed the return it was only about three point five percent.
Scoop: That's no good – however when you sold the buildings the majority of on-street parking was two dollars?
Wayne: No, no when we sold the parking buildings the majority of inner city parking was three dollars all through Lambton Quay…aaahh… Courtenay place, Featherston Street whatever - and then you had two dollars on a range of that and then a dollar in ten hour parking.
Scoop: It was three dollars on the Terrace as well?
Wayne: Yes – the vast majority of paid parking was already three dollars.
Scoop: But you didn't have to walk far to find a two dollar or one dollar park?
Wayne: That reflects how compact the city is.
Scoop: Why did you wait so long to put the parking prices up – in which time you sold the publicly owned car parking buildings and then increased the on-street parking? Won't those car-parking buildings now be making a lot more money?
Wayne: I spoke yesterday to the three main parking operators Wilson Parking, Tournament parking and Care parking. Wilson said no change. One operator said an increase, another operator said any increase had been lost by petrol prices putting people off coming in to town in their opinion.
Scoop: When the Wellington City Council sold the buildings they surely weren't predicting the ongoing crisis in Iraq?
Wayne: DCZ valued the buildings on what they were going to be worth in the future because prices were going to increase at some time. So when we sold the parking buildings the people that purchased them always knew that prices would go up.
Scoop: Did they know prices would go up to four dollars an hour across town?
Wayne: That would be the next logical price increase.
Scoop: Why couldn't prices have gone up to $2:50?
Wayne: When we had some meters that were $1:80 we put them up to two dollars. I can't produce you numbers but we had a lot of feedback from the public…
Scoop: We'd much rather pay four dollars an hour?
Wayne: We'd much rather pay two dollars – they wanted even numbers. They'd go one dollar is half an hour and two dollars is an hour.
Scoop: They could have put two dollars in and got extra time couldn't they?
Wayne: What I'm saying is the philosophy there is that people said dollars were easier to work with. Rather than going to $3:20 we said we'd go to four dollars. It might be there is no price increase for ten years. We don't adjust the prices to inflation – besides there are mechanical considerations.
Why Two Bucks per Hour Is Now Four Bucks Per Hour
Scoop: Very briefly - have there been any studies done on the turnover?
Wayne: Yes we do studies on the turnover we do an extensive study on occupancy and turnover.
Scoop: Why have relatively low turnover places such as outside Parliament where you could pretty much always get a park for two dollars doubled in price. Why didn't they go up to three dollars for example?
Wayne: This is an issue of consistency for people. People would prefer not to pay any more but an issue was raised about consistency of prices and what value the areas have.
Scoop: But surely that is to do with turnover – I can't understand why busy areas such as the Terrace have gone to four dollars but so have less well used areas that were two dollars?
Wayne: There's two mixtures there's turnover and return on investment.
Parking Prices Hit Shop Owners Hard
Scoop: Have you looked at the issue of less people coming in to town and going to shops – anecdotally that's a big issue?
Wayne: You are bound to get an immediate impact – in 1998/99 what they saw was a response change so after a while people start to come back. At some point the prices were going to go up anyway. If you don't do it this year they will go up the next year. There's no difference between the issues we'll face today and the issues we'll face in time.
Scoop: What, bankrupting shops in Cuba Street and having shop owners fuming?
Wayne: That's drawing a long bow to say that.
Scoop: No it's not - there are a number of people now going to shop in Lower Hutt because of the parking fee increases?
Wayne: There were also many people that said we won't come to Wellington because we can't find a park - price wasn't the issue. They didn't come to Wellington because they couldn't find a park. Our occupancy figures show that for a significant part of the day there is 100% occupancy – you can't get a park. And if you look at the letters – the few letters, I've got to acknowledge the few letters that have come in and said we support the increases. They have said we support the increases we really like being able to pull in and get close to where we want to shop. There is a divergent point of view.
Scoop: Is the council going to review it at any stage.
Wayne: I think the council said it was always going to review everything.