threat or actual existence of subsidized municipal competition. Lending institutions have discovered that parking can be a profitable business where there exists a proper "climate" for free enterprise. But where subsidized municipal competition is present, not only is private enterprise unable to expand, it is driven off the market. Here are some cases in point to show the difference of achievement between those cities where private enterprise was left a clear field and those cities where municipal programs were undertaken. Atlanta, Ga., which is free enterprise, has a metropolitan area population of 1,017,108 and is the 24th largest city in the country. From the period 1954-63, 12,019 additional spaces were created with an additional 3,724 spaces under construction as of January 1, 1964, plus 3,762 spaces announced for 1964-65 for a total of 19,505 additional spaces from 1954 to 1965. Compare these figures to Chicago, Ill., which has a major municipal parking program. Chicago has a metropolitan area population of 6,220,915 and is the second largest city in the country. From the period 1954-63 only 3,571 additional spaces were created with none under construction as of January 1, 1964, and none announced for 1964-65, for a total of 3,571. Certainly this is a remarkable contrast and demonstrates clearly what can be done in solving the parking problem in the central business district, when private enterprise is given a free hand. Dallas, Tex., is another free enterprise city, has a metropolitan area population of 1,083,601, and is the 14th largest city in the country. During the period 1954 to 1963, 10,338 additional parking spaces were added plus 3,827 spaces under construction as of January 1, 1964, with 4,558 additional spaces announced for 1964-65, for a total of 18,723 spaces. Detroit, Mich., has a major municipal parking program and is the fifth largest city in the country with a metropolitan area population of 3,762,360. During the period 1954-63 Detroit added 6,641 spaces, plus 400 under construction as of January 1, 1964, with an additional 1,600 announced for the period 1964-65 for a total of 8,641. As you can see, Dallas has added more than twice the number of spaces from 1954 to the present time as compared to Detroit. Pittsburgh, Pa., has a major municipal parking program. It is the 16th largest city in the country and the metropolitan area population is 2,405,435. During the period 1954-63, Pittsburgh added 5,115 spaces, with none under construction as of January 1, 1964, and an additional 1,450 announced for the period 1964-65, for a total of 6,565. Minneapolis, Minn., which is a private enterprise city, is the 25th largest city in the country with a metropolitan area population of 1,482,030 and added 5,099 parking spaces during the period 1954-63 with an additional 360 under construction as of January 1, 1964, plus 1,520 spaces announced for the period 1964-65, for a total of 8,569 additional spaces since 1954. In other words, Minneapolis has been able to add more additional spaces since 1954 and is the 25th largest city in the country, while Pittsburgh has added less additional spaces during this same period and is the 16th largest city in the country. An account of what initiative and private enterprise created in Minneapolis is told in the NPA publication, Parking, for winter 1965, pages 22 to 27. (The article referred to follows:) [From Parking, winter 1965] "THE MINNEAPOLIS PLAN"-ATTACKING THE DOWNTOWN PARKING PRoblem Speech delivered on September 23, 1964, in Baltimore, Md., at meeting of International Downtown Executives Association-by Lyman Wakefield, president, Downtown Auto Park, Inc., and vice president, First National Bank of Minneapolis. Let's turn our thinking back to 1948, just following the end of World War II. Minneapolis was a city of approximately 480,000 with rapidly expanding suburbs to the north, south, and west, and St. Paul across the Mississippi River to the east. There was a strong retail core along the fine shopping street, Nicollet Avenue. The 100 percent corner was and still is Seventh and Nicollet, which has two dominant department stores; locally owned Dayton's, and Allied Stores, Donaldson's, occupying two corners, and Woolworth's and Kresge's on the other two. Nicollet also has about eight blocks of additional attractive retail stores, with the third largest department store to the north, Powers, owned by Associated, along with J. C. Penney Co., and many others. In 1948, there was a strong Building Owners & Managers Association in Minneapolis, with principal leadership stemming from Baker Properties, the largest single factor. Baker Properties today provides immaculate office space for many of the Nation's larger enterprises including Pillsbury, Bemis Bag, International Milling, Investors Diversified Services, Archer-Daniels-Midland Co., Minnesota & Ontario Paper Co., Cargill, and others. The central loop area had Marquette Avenue paralleling the retail street Nicollet Avenue, on which were located the two major commercial banks with deposits totaling over a billion dollars, plus Farmers & Mechanics Savings Bunk and Twin City Federal and other savings and loan associations, with footings of another billion or more. Now also picture our city with a hotel complex located in the central loop, what was then a moderately competitive auditorium (now being modernized to include the finest of everything) and several of the country's best restaurants, theaters, a library, several radio and TV stations, and two large and active businessmen's clubs. Close to our loop is the University of Minnesota, where the Minneapolis Symphony has played to upper Midwest audiences for many decades, and where approximately 35,000 students attend the myriad of colleges and graduate schools. You can visualize the situation at the end of World War II, with the return of the public to full use of the automobile, and our vigorous loop area with the usual parking meters, a few parking lots, and a rather antiquated public transportation system, which utilized at that time an electric streetcar system which operated on rails. Our business leaders were quick to sense the need for offstreet parking decks, and our city council, which I am happy to be able to say, both then and now works closely with our downtown council and the chamber of commerce, was equally aware of this need. Our businessmen at that time recognized that something must be done, but were uncertain about how to start and who should provide additional parking. After meetings of the chamber traffic committee, the city engineer and city council, it seemed that there should be a survey of some sort to try to choose the most logical sites for parking garages. The council agreed to pay for this survey and it was at this juncture that our first fortunate decision was made when this city employed George Devlin of National Garages of Detroit to make an initial feasibility study, which pinpointed three excellent potential locations. The survey was completed and in the latter part of 1948, the city called a meeting in the Nicollet Hotel and invited representatives from the chamber of commerce, the building owners and managers association, the real estate board and other interested parties. It was soon apparent that the city proposed to purchase three sites deemed best located to generate parking, and to finance these under our Elwell Law. This statute required that 50 percent of the cost be paid by the city and 50 percent by the benefited property owners. The assessed portion was to be paid over a 20-year period and was not deductible for tax purposes. The decks would of course be operated by the city. It became apparent very early that this suggested plan presented major problems for us. The city's estimate of the cost of land for these sites was absolutely excessive. Our businessmen, who would have to pay the major portion of construction and operating costs, soon used their pencils and realized that the first cost of acquisition by condemnation, plus the public cost of construction, and the usual city costs for operation of a business, would become a staggering total. Particularly this was so when we considered costs in the framework of permanent removal of this choice real estate from the tax rolls. As a result, and with important encouragement to consider building privately, from George Devlin, Les Park of Baker Properties, Don and Bruce Dayton, certain members of city government and chamber committees, a meeting, which now has become rather famous, was held in our bank. On this occasion, representatives of the retail stores, building owners and managers, banks, hotel owners, and the Minneapolis Star & Tribune, made the decision to "do it ourselves." I won't regale you with all the problems which ensued, except to say that they were numerous, as we had no money to start with, no debt financing, of course, and no organization. We proceeded, however, and ultimately were able to raise, through the sale of stock in Downtown Auto Park, our new civic corporation, $600,000 in capital and (based on feasibility studies prepared by National Garages) to sell 27-year bonds to Northwestern Mutual of Milwaukee in the amount of $1,425,000 at 4 percent interest. I'll never foregt when Bruce Dayton came into our bank, the day we developed an option on our first real estate, and gave me a check for $40,000, this being the initial money to come into the corporation. We even had to buy two parking lots and trade these to one owner, to obtain our first site. The second site was equally difficult to obtain and we were greatly aided in this by talented P. R. Harrison, commercial real estate officer of our bank, who negotiated all our real estate purchases. Our first parking deck was completed in 1950, to house 525 cars, and was located at Fourth and Marquette, across from our third largest department store and on our financial street. The land cost $10 a square foot and the building cost $4.00 a foot to construct. The second deck, for 925 cars, was built in 1951, at Ninth and LaSalle, just a block south of Dayton's, our largest generator of transient parking. At the outset, we turned over our operations to National Garages of Detroit, and our civic corporation has at all times operated with the lowest possible overbead, as is attested by the fact that I have been an unpaid president for 14 years. Our corporate records are kept by our attorney, and we use Touche, Ross, Bailey & Smart to handle our financial records. National Garages, under management contract, does the rest. And what effect did the completion of this project have in our downtown? Our bank, the First National, was stimulated to build the first auto bank in Minneapolis, by clearing a lot adjoining our building for 40 fast-turn stalls. This auto bank was popular and, of course, our competitors immediately followed with drive-ins, parking lots, and garages. Our bank now has an 80-car auto bank located in our new 26-story bank building, completed in 1960, which handles about 900 cars per day, a monthly average of 11 per car space. Our first open-air auto bank with tellers nearby, handled 850 cars per day and 18 cars per car spacequite efficient operations, I think you will agree, with only one man in charge at all times. Of course the minute the word was out that Downtown Auto Park was operating at a profit, risk capital owned by other private investors was intrigued. Investment after investment followed. Each new parking deck was carefully engineered and financing arranged privately. Risk capital flowed into this new parking where justified. It built stalls as they were actually needed, and not before or after. Interestingly, in all cases but three, these have been designed by National Garages of Detroit. Even the one garage built by the city, for 556 cars, to handle only vehicles owned by the city or by city employees, was designed by National. Today, we have 6,000 stalls in 11 private decks all built since 1950 in the central loop. (See schedule "A," p. 231, for detail.) Downtown Auto Park, our corporation, has duirng the past year acquired two additional sites and we have drawings underway for construction of 2 decks of 400 cars each, one to be completed next year and the other, we hope, in 1967. These will be fast turnover, transient-type buildings, both, of course, utilizing selfparking, with retail space on the first floor. You will be interested to know that one of these decks, to be located on Sixth Street, is on one of the sites originally recommended by the city survey made in 1948. We acquired the land with buildings for just $23 per foot. Fifteen years ago, the city proposed to pay $45 a foot for it, to build a city-owned garage. The basic economics and soundness of this private approach versus public ownership seems quite obvious. Let's state a few facts. Our corporation alone now pays $96,000 a year in real estate taxes. We have computed the taxes paid to the city by all 11 private decks, and they total $1,210,900 per year. They also pay Federal and State income taxes, and bond interest charges are taxable to recipients. Our costs of construction for parking have run less than $1,500 per car space. Cities normally spend about two times as much for land, and much more for construction. We, of course, do not operate under civil service. Let me give you an interesting example-this computation was made some years back, but illustrates the point: Two Pittsburgh garages built by that city provided 1,100 spaces. Our 2 Minneapolis garages provided 1,330 spaces. Pittsburgh paid $2,900 and $2,700 per car space. The carrying cost nut (principal payments, interest, and taxes-including 6 percent to equity holders of our corporation) was $180 per car space. In Pittsburgh, bond principal and interest payments only totaled $210 per car space. At the time this comparison was made, our corporation paid $72,000 a year taxes to Minneapolis, and Pittsburgh of course received no taxes. Municipal ownership eliminates flexibility. Once land is dedicated to the city, it is gone. Much more importantly, once the subsidy starts in parking, ri-k capital is frightened away and usually does not feel it can compete, even though the above figures indicate it can. As a result, rigidities creep into municipal developments and spread to all off-street parking. In Minneapolis, good tough competition has forced the construction of some parking, while risk capital, seeking profitable investment, has done the rest. Older buildings have retained their value and competitive position, because parking has been developed nearby. Parking fees have been kept in line by competition. We do not practice validation and free parking to any extent in Minneapolis. By providing close-in parking, the shopper, executive, or office worker will pay the fees without complaint. Pricing of parking is in line with convenience and nearness to the generators. As more cars and more customers demand more stalls, private capital quickly builds them. Today, Minneapolis has one of the most vigorous, competitive, and healthy central city areas in the United States. Since 1955, over $225 million in new downtown construction has been completed, or is underway. We think we have proven the advantages of working out our own salvation, with private business leadership and with the city limiting its activity to an advisory capacity. It works and it is sound, efficient, and just naturally fully capable of continuing the process in the future. We have here just another striking example of the real private enterprise system working better when left to go it alone. You might be interested in some of our Downtown Auto Park statistics: The average charge per customer has been about 50 cents. The following are some figures on parking facility construction and operation, which might be helpful to any of you who want to plan or operate parking structures: (1) Today's per car space cost of construction: Pure contractors price, $1,500 plus or minus depending on cost of preparing the site. (The lowest cost in our area was $1,100 recently.) (2) Land cost per car space: Normally $1,000 to $1,500 per car space. Retail space may help to pay any excess over this, depending on area involved. (3) Gross income (parking gross only) should run $350 to $450 per space per year. (Transient fee 10 cents first half hour or 15 cents hour-top $1.40 per day.) (4) To be an economic venture, income should be 10 to 12 percent after operating expense on cost of the land and buildings. (5) Management and operating expenses should cost $60 to $100 per space per year. (6) Real estate taxes usually 11⁄2 to 3 percent of land and buildings (Minneapolis 3.1 percent). (7) Debt financing is generally available for 60 to 80 percent of appraised value of land and buildings, over 25-year period. In closing, I just want to offer a suggestion to you and your businessmen in your cities. When you are frustrated and seem to be almost at a dead end in your programing to provide offstreet parking, remember that you will always have to pay for whatever is done. Instead of taking the temporary and easy course of waiting for someone else (namely, the city) to do the job, just tighten your belt, take a deep breath and go to work-be like the Little Red Hen and "do it yourself." SCHEDULE A.-Data on Minneapolis parking decks built since 1950 Mr. BARR. The figures in the foregoing analysis are taken from a publication entitled "A Decade of Building in Central Areas of American Cities," a 1964 pilot research project for the International Downtown Executives Association prepared by Lloyd Braff, executive director of the Dallas, Tex., Central Business District. Pertinent tables appear in Parking, winter 1965, as I have said before, a copy of which is attached. (Table referred to follows:) |