A financial analysis of the Chicago public parking program (supplement) offstreet parking data [In thousands] Real estate tax losses (land and improvements), $2,685,430 per year.. 10-year net loss $5,366,000 13, 288,000 18,654,000 5,366,000 26,854, 000 32, 220, 000 TABLE 1.-Percentage distribution of offstreet parking spaces in various sectors of the central area of Chicago, by rates for 1-hour and all-day parking, October 1963 and 1964 Source: "Parking in the Central Area of Chicago," October 1964, Institute of Urban Life, 740 North Rush St., Chicago, Ill. Senator TYDINGS. I will, at this time, introduce into the hearing record a review of the research paper, "A Financial Analysis of the Chicago Parking Program," by Mr. Myron Warshauer. This review is presented by DeLeuw, Cather & Co., consulting engineers Chicago. (The document referred to follows:) DE LEUW, CATHER & Co., MEMORANDUM Date: DECEMBER 17, 1964. To: Wm. R. McConochie, at Chicago. A review of the research paper indicates that the author, M. C. Warshauer, has little understanding of Chicago's parking program. In his financial analysis, he ignores the program as a whole almost completely and considers each facility as if it were a separate entity. Only when he discusses the bond ordinance or when he wants to show impressive tax loss figures does he combine facilities and then, only to suit his purpose. Mr. Warshauer attempts to prove that, "the parking program of Chicago, without benefit of meter revenues, is a total failure from a financial standpoint.' He tries to show that the program is a success only as a result of being subsidized by parkers who use the small number of facilities that are self-sustaining; by parkers who use the curb meters; and by the general public who must provide the money lost due to the removal of parking properties from real estate tax rolls. Many untruths, half-truths, innuendos, and errors were found in the report. Some of the more significant errors are illustrated below: 1. COMPUTING ASSESSED VALUATION TO DETERMINE DIRECT LOSS OF TAX REVENUES Since the parking facilities are publicly owned, they are tax exempt. Mr. Warshauer wanted to show how much annual real estate tax revenue was lost to the city as a result of the parking program. To do this he developed, first, a set of hypothetical real estate tax tables for the years 1955-58. These tables (19, 20, and 21) included total cost of each facility. They also included a formula which the author claims to have received from the county assessor's office to compute assessed valuation. The formula consists of the following elements: (a) Each parcel of land at 80 percent of actual value. (b) Sixty percent of the value of improvements. (c) A State imposed equalization factor of 1.41. Mr. Warshauer applied the above formula to the actual site and construction costs and computed, what he called, the total assessed valuation for each parking facility. The results were interesting. Total assessed valuation of parking facilities exceeded actual cost in most cases, at times up to as much as $37,000. Nevertheless, a tax rate of 7.5012 per $100 was applied to these assessed values to determine annual tax revenue loss by each facility for the years 1955-58. The whole aforementioned method of computing taxes seemed very strange. Therefore, this writer went to the county assessor's office to determine the validity of Mr. Warshauer's methods. What was learned is most interesting and is set forth below: (a) Current land and construction costs are not used to compute tax assessment values To give an honest appraisal of tax revenue lost to the city Mr. Warshauer should have computed the assessed valuation on the properties that existed prior to the parking facilities. To compute tax loss on the basis of the assessed valuation of current land and construction costs was ridiculous. Mr. Hanson of the county assessor's office carefully explained that, in general, the assessed valuation of most properties is much less than actual market values. One parcel of land fronting on State Street just north of the Loop was used as an example. The market value was shown to be around $280,000 for land and improvements. The assessed valuation was $70,000, or, one-fourth as much. In Mr. Warshauer's paper assessed valuations exceeded, not market values, but actual construction costs in most cases. (b) To have made the statement that the county uses a formula to compute assessed values was libelous The figures of 80 and 60 percent that were given to Mr. Warshauer are average tendencies. Average value of land tended to be 80 percent of actual value. Average value of improvements tended to be 60 percent of actual value. This means that in some cases land is assessed at 50 percent of actual value. In other cases, as in the Loop for instance, land may be assessed at 110 percent of actual value. Yet, the author used 80-60 percent as a formula. STATEMENT BY HON. HENRY A. BARNES, TRAFFIC COMMISSIONER, NEW YORK, N. Y. The automobile is a recognized element in any well-integrated system of regional transportation. It is a supplement, not a substitute for mass transit, affording flexible, versatile, and rapid movement for special transportation needs which are not adequately met by the rigid schedules and routes of rails and franchised buses. It serves the economy by broadening the market of the seller and selective scope of the buyer. Within the context of its specialized contribution to transportation, the automobile has its own specialized requirements-traffic control for safe and efficient movement to its destination, and parking at the point of its maximum economic productiveness. In serving the specialized requirements of automotive transportation, we must correlate the planning and operation of a municipal parking system with its engineering programs for safe and efficient traffic flow. In New York City the offstreet parking system of the traffic department embraces 36 parking fields and 4 garages operated on a self-liquidating financial basis. Each unit benefits traffic and transportation in one or more of the following ways: 1. By providing all-day parking in peripheral areas of the city adjacent to mass transit lines thus permitting residents of areas remote from commuter lines to use their cars for part of their journey to work without adding to peak hour volumes in the core areas. 2. By providing short-time parking for patrons of shopping areas within the city. Used mainly in off-peak hours, this service offsets the parking advantage of suburban parking centers, thus protecting jobs and enhancing sales volume in the city's retail and wholesale businesses. 3. By providing short-time parking in central areas for persons whose cultural, recreational, educational, or business function requires short-time parking space in the core areas. This phase of the program also serves salesman and servicemen with sample cases, tools and parts; and clients, customers, and patrons from outlying areas not conveniently served by mass transit. This service combats business migration from the city and the consequent loss of tax revenues and jobs. Critical shortages of short-time parking facilities in most downtown areas are a hardship to business, and the cause of illegal parking, traffic congestion and accident hazards. The necessary high initial-hour fees, design, and location of the privately operated parking facilities screen out the short-time patron and encourage the all-day parker who adds to traffic volumes by peak-hour arrivals and departures and whose transportation needs could and should be served by mass transit. They are located without correlation to one another or to the traffic pattern. Municipally operated garages, however, should be operated on a fee schedule encouraging the short-time and discouraging the all-day parker. Located near main arteries and convenient to business and shopping areas, these units would facilitate traffic flow by removing vehicles from downtown streets. They should aid business operations, promote retail trade, and pay amortization and operating costs. In New York City the traffic department's municipal parking system now serves more than 6 million annually in 40 parking facilities throughout the 5 boroughs. The department has under design or construction 12 more facilities which will accommodate another 2 million patrons annually. It now operates four short-time parking garages which provide successful congestion relief measures, good financial investments, public services, and esthetic improvements. Mr. BARNES. I think that Mr. Devlin made a couple of rather interesting comments when he stated that Detroit had only one public garage, but I think also if one has been in Detroit, they will remember perhaps the Northland Shopping Center, which is one of the largest, I think, in the world, where they have something like 17,000 parking spaces, and that shopping center came about because of the fact that people of Detroit just could not park in the downtown area of Detroit. Therefore, business moved out, and created its own offstreet parking. The same thing occurred in Los Angeles, when the downtown Los Angeles became so congested that lack of parking was so apparent A FINANCIAL ANALYSIS OF THE CHICAGO PUBLIC PARKING PROGRAM (By Myron C. Warshauer) (The true story of Chicago's municipal parking program *** a research study by Myron Č. Warshauer, prepared for the Graduate School of Business Administration, Northwestern University) FACTS, FIGURES TO SUBSTANTIATE THIS "Thirty-two units out of thirty-six proved incapable of paying their own way. ***"' "The parking program of Chicago, without benefit of meter revenues, is a total failure from a financial standpoint." NATIONAL PARKING ASSOCIATION, INC. 1101 17TH STREET NW. SUITE 906 WASHINGTON, D.C., 20036 Please send me copy(ies) of "A Financial Analysis of the Chicago Public Parking Program," by Myron C. Warshauer. My check for five dollars ($5) is enclosed. NAME AND ADDRESS DE LEUW, CATHER & Co., MEMORANDUM To: W. R. Mc Conochie, at Chicago. NOVEMBER 24, 1964. From: Ann Alpert, at Chicago. Subject: Criticism of Chicago parking program. In "A Financial Analysis of the Chicago Public Parking Program," Myron C. Warshauer criticizes the Chicago municipal parking program. Although Mr. Warshauer prepared the research study for his master's degree in business administration, it should be noted that his father owns various parking lots and garages in the city. For example: Dee-El-29 West Monroe. Dearborn-Lake Garage-207 North Dearborn. Parking Lot-Approximately one or two blocks south of city garage east of North Michigan Avenue. Garage Located in vicinity of Wabash and Jackson or Adams. We are happy to have here Mr. Henry A. Barnes, the traffic commissioner of the city of New York, a former Baltimorean, and I might say a man whom I think is considered without peer in the field of traffic engineering in the United States. I know the people of Baltimore and Maryland consider him without peer, and the taxi drivers of New York do too. I think that is a pretty good recommendation. Mr. Barnes, we are delighted to welcome you back from the wars, and have the benefit of any comments you may wish to make. STATEMENT OF HON. HENRY A. BARNES, TRAFFIC COMMISSIONER, CITY OF NEW YORK Mr. BARNES. Thank you, Mr. Senator. I am happy to be here, but battle scarred. I have listened to the testimony this morning with some interest. If I may digress a bit from my more formal presentation? Senator TYDINGS. Certainly. (Mr. Barnes' statement follows:) STATEMENT BY HON. HENRY A. BARNES, TRAFFIC COMMISSIONER, NEW YORK, N. Y. The automobile is a recognized element in any well-integrated system of regional transportation. It is a supplement, not a substitute for mass transit, affording flexible, versatile, and rapid movement for special transportation needs which are not adequately met by the rigid schedules and routes of rails and franchised buses. It serves the economy by broadening the market of the seller and selective scope of the buyer. Within the context of its specialized contribution to transportation, the automobile has its own specialized requirements-traffic control for safe and efficient movement to its destination, and parking at the point of its maximum economic productiveness. In serving the specialized requirements of automotive transportation, we must correlate the planning and operation of a municipal parking system with its engineering programs for safe and efficient traffic flow. In New York City the offstreet parking system of the traffic department embraces 36 parking fields and 4 garages operated on a self-liquidating financial basis. Each unit benefits traffic and transportation in one or more of the following ways: 1. By providing all-day parking in peripheral areas of the city adjacent to mass transit lines thus permitting residents of areas remote from commuter lines to use their cars for part of their journey to work without adding to peak hour volumes in the core areas. 2. By providing short-time parking for patrons of shopping areas within the city. Used mainly in off-peak hours, this service offsets the parking advantage of suburban parking centers, thus protecting jobs and enhancing sales volume in the city's retail and wholesale businesses. 3. By providing short-time parking in central areas for persons whose cultural, recreational, educational, or business function requires short-time parking space in the core areas. This phase of the program also serves salesman and servicemen with sample cases, tools and parts; and clients, customers, and patrons from outlying areas not conveniently served by mass transit. This service combats business migration from the city and the consequent loss of tax revenues and jobs. Critical shortages of short-time parking facilities in most downtown areas are a hardship to business, and the cause of illegal parking, traffic congestion and accident hazards. The necessary high initial-hour fees, design, and location of the privately operated parking facilities screen out the short-time patron and encourage the all-day parker who adds to traffic volumes by peak-hour arrivals and departures and whose transportation needs could and should be served by mass transit. They are located without correlation to one another or to the traffic pattern. Municipally operated garages, however, should be operated on a fee schedule encouraging the short-time and discouraging the all-day parker. Located near main arteries and convenient to business and shopping areas, these units would facilitate traffic flow by removing vehicles from downtown streets. They should aid business operations, promote retail trade, and pay amortization and operating costs. In New York City the traffic department's municipal parking system now serves more than 6 million annually in 40 parking facilities throughout the 5 boroughs. The department has under design or construction 12 more facilities which will accommodate another 2 million patrons annually. It now operates four short-time parking garages which provide successful congestion relief measures, good financial investments, public services, and esthetic improvements. Mr. BARNES. I think that Mr. Devlin made a couple of rather interesting comments when he stated that Detroit had only one public garage, but I think also if one has been in Detroit, they will remember perhaps the Northland Shopping Center, which is one of the largest, think, in the world, where they have something like 17,000 parking spaces, and that shopping center came about because of the fact that people of Detroit just could not park in the downtown area of Detroit. Therefore, business moved out, and created its own offstreet parking. The same thing occurred in Los Angeles, when the downtown Los Angeles became so congested that lack of parking was so apparent |