Three quarters of that million dollars a year would come from relinquishing on-street parking meter revenues, which properly belong to the city. Why should we, the District taxpayers, have to surrender it and have our taxes raised further so that our wealthy neighbors can drive into the city whenever they feel like it and have us subsidize their parking? If the proposed facilities are to have any chance of survival they must be located in the heart of the city, and that means on the most expensive real estate. As the proposed bill calls for these facilities to be tax free, the real property taxes now paid on these properties would be lost to the city. With this loss, a million dollars a year may prove to be much too small an estimate of the cost to the city. How many parking spaces are needed downtown? What is the need that would demand such a financial sacrifice from the District? Estimates made by Edwards & Kelcey in 1961 stated that a total of 38,000 parking spaces would be needed by 1971. Figures prepared for the District of Columbia Motor Vehicle Agency on November 30, 1964, showed a total of 34,254 off-street commercial parking places, 8,016 private off-street places, and 6,523 off-street Government parking places. Does this sound like a scarcity of parking spaces? On top of this, we are embarking on a multimillion-dollar subway system which is designed to eliminate much of the need for all-day parking downtown. Why spend $400 million for subways if vehicular traffic downtown is not to be reduced? Before this committee recommends to the Senate that a bill be passed which will cost the District over a million dollars a year, will take valuable land off the tax rolls and will drain away the income from all on-street parking for the next 40 years, let it consider the equity and the responsibility to the taxpayers of the District and to the Federal Government which has a close and intimate financial tie and interest. It has not been shown to this committee that there is any serious lack of parking spaces or that private parking interests have not provided the number that our downtown trade requires. Private enterprise should be allowed to do the job. It asks no subsidies, no favors. It pays taxes, provides employment for thousands and represents a strong element in the city's economic life. The proponents of this legislation overlook completely that when the subway comes into being tens of thousands who now drive downtown will come by rapid transit, thus drastically decreasing the demand for off-street parking. The proponents do not talk about that, because it would seriously weaken their argument for the creation of a public parking agency which could parcel out many valuable favors and create hundreds of jobs for deserving and undeserving politicians. Mr. Chairman, the Federation of Citizens Associations is opposed to the creation of any public parking agency at this time. We consider it an improper demand on our tax funds. We consider it a drain on the essential public services which we must provide. A million dollars for a parking agency means a million dollars less for our schools. Naturally, we think the schools are more important to us than the parking spaces. We protest the raise in our taxes to replace these funds so that parking spaces can be provided for out-of-towners who can well afford to pay for them. 57-450-66-15 A governmental agency should never be formed to do what private enterprise can do as well or better without the use of public funds. On behalf of the taxpayers of this city, we respectfully ask that your subcommittee refuse to support such unfair and special legislation. Thank you. Senator TYDINGS. Mr. Immer, have you read the bill? Mr. IMMER. Yes, sir, I have. Senator TYDINGS. Well, then, if you have read the bill, you will realize that the facilities will be supported by revenue bonds, that construction of each facility will have to be preceded by an economic survey, which would not only include the cost of the facilities but would also consider an amount to be included in every leasing as a payment to the District of Columbia in lieu of taxes. Are you familiar with that? Mr. IMMER. Yes, sir, I am, and I notice the language says specifically only if it is leased to a private operator. We have no assurance that this will be done. There is nothing in the bill that requires that it be leased to a private operator. We have every reason to believe that these facilities will be operated by the Government director or by the parking agency directly, because in doing so, they will not have to pay any taxes to the District of Columbia. Senator TYDINGS. You are also aware that the money which is used to build these facilities would come right out of the revenue bond market, not from the taxpayers of the District? Mr. IMMER. This is correct, but I am referring specifically here to the three-quarters of a million dollars that the District loses in all onstreet parking. Senator TYDINGS. Don't you think that meter revenue from onstreet parking ought to be used for additional parking facilities? Mr. IMMER. No, I do not, not in this particular instance, because on one hand, the meter revenue goes to certain uses here of the city. In the proposed parking bill, it would be taken away from those accounts, and would be lost to the District completely. So therefore I say no. Senator TYDINGS. You don't think parking revenues from meters should be used to support parking facilities? Mr. IMMER. What we are concerned about is the taxes that are paid into the District of Columbia and this is of far more importance to us than the question that the Senator has just aksed. Because we are objecting to the loss of three-quarters of a million dollars a year in tax revenues to the District of Columbia and it makes no difference to us whether it is used for parking or not. As a matter of fact, those funds are simply to be used to take care of these facilities which are currently using 80 percent, primarily in Virginia users. Senator TYDINGS. Let me ask you this: Did your association oppose the proposed Foggy Bottom 5,000-space parking facility down in the State Department-Virginia Avenue area? Mr. IMMER. I can't remember whether we did or not. Senator TYDINGS. Well, would you oppose such a public parking facility there, 5,000 spaces? Mr. IMMER. We certainly would. Senator TYDINGS. On what basis? Mr. IMMER. All I can say is that I would, and thinking in terms of the feelings of the federation as I know them, I think we would oppose it. On the basis of gain, taking away tax revenue, I think we probably have the objection of using that much land in that particular area for parking purposes. Senator TYDINGS. Did your association oppose the plan to renovate what was supposed to be a park in the Federal triangle to make a park on top of the triangle and to create an underground garage beneath it rather than to have the triangle leased as a parking lot, as it is now? Did you oppose that proposal? Mr. IMMER. I can't remember whether we opposed that or not. Senator TYDINGS. You would oppose it now? Mr. IMMER. I can't answer that. I know personally I was in favor of it. I thought it was a very, very good idea. I felt that we needed parking down there. I noticed that it did not take any taxable land off the roles of the District of Columbia. Senator TYDINGS. Would you be in favor of it now, even if it were operated by municipal authority? Mr. IMMER. Yes; I would. Senator TYDINGS. What about the proposal to have an underground facility underneath Farragut Square? Mr. IMMER. Well, here again I would agree with the Senator. I think this would be an entirely appropriate use. In fact, I would support a proposal to provide a three-level parking complex under the Mall, which would provide facilities for buses, particularly buses from out of city, and as well as the off-street parking during the day, and then perhaps the top level for hourly meter use, something like that. Yes, I would support something like that. In other words, we are not opposed to providing more parking spaces in the downtown area. And we are certainly, in fact Senator TYDINGS. Would you be in favor of the bill, if it were limited to having a public parking authority which provided spaces under publicly owned land or did not take land which is now on the tax rolls? Mr. IMMER. I think we probably would; yes, sir, because we recognize the need for a sufficient number of parking spaces downtown. Now we consider that we are about to have a subway system, in the near future, we hope, and we think that this should relieve some of the demand for all-day parking, you see, our problem here, sir, is two kinds of parking. One, the people who drive to work and work all day, and bring their cars down and keep them parked here all day, and two, the people who come down to shop in the middle of the day. Senator TYDINGS. And the tourists. - Mr. IMMER. Yes, sir, and of course, also the tourists. But by and large, our big problem here is the number of people who work downtown who bring their cars down here. Now we hope that with the subway system, that these people will be induced to leave their cars at home, and in this case, this would help the parking situation quite a bit. Now in answer to the line of inquiry that you have here, I would say that we would have very definitely supported a number of projects to provide parking under public land presently used either as park lands or the Mall, or other places here, and certainly from the standpoint of carrying out our obligations to the people of the Nation that come here to visit, we should provide parking for them downtown, but what we are concerned about here is that we see another agency being set up with powers of condemnation and we know that those powers are not going to be exercised against Woodward & Lothrop, Hecht's, and Kann's, they are going to take a nice little block which is presently occupied by about 40 or 50 small businessmen, and that is the block that will be condemned and taken for parking space. And we feel it is, in our opinion, we are very much concerned with maintaining our tax base here, and we are very jealous. We are hanging on to every bit of taxable land that we have, for one thing. Secondly, we are concerned about our preserving enough of our land downtown for the small businessman. And then, of course, we are very much concerned about this additional power of condemnation, which along with urban renewal of other things, paints a very dismal prospect for the future of small businessmen in downtown Washington. But I would say that we certainly recognize the need for parking, and we are pointing out here that the case has not been proven. Now maybe I have not heard all the testimony, but on one hand, I have a statement here which was put out which the Federal City Council, pointing out that our needs by 1971 are going to be for 38,000 parking spaces. Well, maybe there are other estimates that show a much greater need, in terms of specific number of parking spaces, but this is what I have here, and on that basis, if the need pointed out, as with all the studies, indicates that by 1971, we are going to need 38,000 parking spaces, and private facilities now provide 34,000 offstreet commercial parking spaces, with 14,000 other places, then it seems we have no problem. Now admittedly in certain parts of the city Senator TYDINGS. But you admit we do have a parking problem? Mr. IMMER. No, sir; I do not. I go downtown quite a bit, and it is very seldom that I have any trouble in getting into a place somewhere in the downtown area. Now admittedly sometimes I have trouble getting within half a block of where I want to go, and of course this is very frustrating, but I have reconciled myself to walking two or three blocks in some instances in order to park downtown, but I say that I am downtown quite a bit, and I have seldom any real trouble in finding a parking space. Senator TYDINGS. Thank you very much, Mr. Immer. We appreciate your testimony and your comments. Mr. IMMER. Thank you, sir. Senator TYDINGS. Mr. Cortlandt Herbst, chairman of the Committee for the Rights of Washington, D.C., Business Community, Inc. A very impressive title, Mr. Herbst. Mr. HERBST. It is a long one, anyhow. Senator TYDINGS. We welcome you to our subcommittee. 221 STATEMENT OF R. V. CORTLANDT HERBST, CHAIRMAN, COM- MITTEE FOR THE RIGHTS Mr. HERBST. Thank you, Senator Tydings. BusiGentlemen, my name is R. V. Cortlandt Herbst, and I am chairman of the Committee for the Rights of the Washington, D.C., ness Community, Inc. My business is real estate brokerage, and I have been in this business for about 15 years, so I have been able to see the free enterprise system working at first hand. Before going into the facts which show why the proposed legislation is not necessary, I would like to go into some land economics. The main fear of those who propose government intervention into the parking business is that parking is a requirement for office usage, and that the parking will not be supplied by the free enterprise system. Let us see. Let us say that there is a new office building in a particular section of downtown. Let us say that the building cost $1 million. It is fully occupied, and the income is $130,000 per year. That part of the income which justifies the building investment is, say, 10 percent, taking into account depreciation. This comes to $100,000, leaving $30,000 attributable to the land. Capitalizing this at 6 percent, we get a figure of $500,000 as the residual value of the land. Investors will not pay over this figure for land for the office building. Now, let us say, an adjoining piece of land of the same size becomes available at the same figure of $500,000. Will this land be used for parking, either as a lot, or as a site for a garage, or will it be used for an office building? If the land can receive an income of $30,000 for a parking lot, or if it can have $30,000 attributable to it after accounting for the improvements, as in the case of the office building, then the land could just as likely come into parking use. What happens if the occupants of the office building already built have to have parking, and it is not supplied? Occupancy rates will decline, and the income drops. Let us say it drops to $100,000. This amount is just enough to make a return on the improvements, leaving nothing for the land. Land value for office buildings will drop, and additional land will be used for parking. What happens is that there will be a relationship of land used for offices and land used for parking in a combination determined by the market. This system does not require subsidies. What happens when land becomes more highly developed with offices, and a higher percent of land is used for offices as against parking? If all the new office space can be occupied without additional parking spaces, then that means that parking is not necessary for the offices. It means that some other form of transportation is used-if the auto were the only form of transportation, then the additional office space could not possibly be occupied, unless additional parking spaces were provided. So much for the economics. Now, let us look at the facts in the local situation. The main fear, as I have said, which underlies the argument for a public parking authority, is that one segment of a joint demand will be supplied without the other; that is offices without parking. I have shown that to the extent there is a joint demand, that there will be the proper supply of both. If one is supplied without |