Wiging(ton) Out: Nashville Airport’s Tiny Tyrant

Posted: March 1, 2013 in Parking

Get ready for some déjà vu people: Nashville’s municipal airport authority just jacked up their access fees for parking facility shuttles by more than 300% in what appears to be an attempt seriously damage local parking operators and force them to underwrite improvements to the airports own transportation services. Starting Friday, MNAA’s access fee per shuttle will rise from $1.75 to $6.50. This hike was part of a recently passed policy by the MNAA which simultaneously lowered the access fee for hotel shuttles from $1.25 to $.50. This isn’t the first time the MNAA has been playing favorites and picking winners and losers among the local airport related businesses; back in 2011 they introduced a similar policy that reduced hotel access fees by $.25 while raising off-site parking shuttles fees by the same amount. While there are only four off-site parking operators around BNA, there are 29 hotels within 3 miles of the airport, almost all of them offering shuttle services to the airport and park-sleep-fly programs that cater exclusively to travelers just looking to use the hotel to park their car while they’re away. Not only is this new policy discriminatory, it’s throwing away a giant pile of revenue from the hotels, essentially taking the money out of the pockets of the parking operators who operate at a very low profit margin and handing to the hotels, with the leftover going to the MNAA to fund their new projects and bolster their bond ratings. Talk about a reverse Robin Hood.

So who is our bizarre-Robin Hood? That would be Rob Wigington, a longtime professional executive in the airport industry. While he claims to espouse conservative fiscal principles, I don’t seem to remember Atlas Shrugged canonizing the government bureaucrat using his station and authority to squash competitive business and give hand-outs to others. Wigington’s argument for these gross policy changes is that the parking operators need to “pay their fair share” since their business revolves around the airport. Of course, if that is truly his attitude, one has to wonder why Mr. Wigington doesn’t think that hotels need to pay their fair share, considering that their business model is also dependent on the airport being there and that most of the hotels turn a larger profit on their own than all the offsite parking facilities combined. Wigington also argues that these fees are below the industry standard, which he claims is a straight 10% off the top for any parking operators that shuttle to the airport. I can tell you right now that that is B.S., as the markets for each airport are vastly different. In some airport markets, offsite and onsite parking can be as cheap as a few dollars and in others you’ll be looking at close to $20 a day offsite and nearly double that at the airport. There is no standard for the airport access fee because there is no standard airport parking market. At the end of the day, although the MNAA is expected to practice good business practices and run itself like a good business, that doesn’t justify or permit using its power and authority as a government entity to tax its competitors out of business. By Mr. Wigington’s logic, Dell and IBM should be able to charge a fee for every Google and Bing search because their businesses are based on someone using a computer; it’s utterly ridiculous.

Underscoring what seems to be a financial motivation for shaking down local parking facilities, Mr. Wigington has undertaken costly upgrades and improvements to the airports transportation and parking systems, while also getting the rating of many of the airport’s bonds improved, most notably that of the new parking structure construction project. What that tells us is that the MNAA had to be seeing significant improvements in their financials and cash flow; you could write off the parking structure bond’s improvement to the project coming in ahead of schedule if it weren’t for the across the board improvement of so many of the MNAA’s bonds. While the number of travelers has been improving since taking a dive in 2008, it’s doubtful that Nashville air traffic was getting enough of an uptick to merit the bond rating improvements; and the airport actually recently lowered their parking rates, which while making them more competitive still doesn’t put them anywhere in the range needed to be siphoning back parkers from the off-site facilities. Any way you look at it, the local parking businesses are being forced to pay for the airport and hotels to try and wipe them out of business. On top of all of that, when the local parking facilities asked the Nashville Chamber of Commerce to step in and help arbitrate the matter between them and the MNAA, the MNAA refused to even deal with the Chamber, and said they’d only deal with the facilities on their own behind closed doors; what, did they all go to the Joseph Stalin School of Business or something?

Finally, these days including a management bonus based on the airport’s revenue is boilerplate in municipal executive contracts. A look at the MNAA financial reports for FY2012 shows that although they experienced a slight dip in parking revenue per space, overall parking revenue is at an all-time high for the airport. And while revenue and assets for the airport seems to have plateaued after a few years of growth, operating costs, specifically payroll, have continued to balloon out of proportion with the airport’s growth. Previous outside audits had recommended switching the MNAA bonus system to one based off of net profits instead of the gross profits formula used for some management positions at the airport. While none of their other financials clear up whether and for what positions this bonus structure was implemented, my guess would be yes. You see, while the airport wasn’t more profitable this year, they did manage to pay down and reduce a good chunk of their bond debt, increasing the airports net assets and in particular increasing their net capital in relation to liabilities. So even though the airport didn’t see significant improvement in revenue, the MNAA can say their financials are better and thanks to moving some numbers around a bunch of execs are going to get big bonuses, funded in part by imposing what amounts to a three-fold tax increase on parking facilities and their customers.

Now if you’re anything like me, you’re mad as hell. This is like Port Canaveral all over again except this time with a slicker, smarter suit in the role of government villain. Of course what makes officials like Mr. Wigington think they can get away with such a gross abuse of government authority against local businesses is that they think they are acting in a vacuum, that no one is paying attention and there are no consequences to their actions. That is not the case this time around, and thanks to the internet there are avenues to let the MNAA know that they’re in the wrong that never existed before. If you go here you can tell the entire MNAA Board as well as the Nashville Mayor’s office and every member of their metro council exactly why they’re in the wrong to think that they can use their elected authority to shakedown local businesses and what their reelection chances are if they do. And if you’re flying out of Nashville, you can vote with your wallet and still save a bundle on parking compared to the airport by using any of these facilities. Stay tuned, as I’ll post updates to this ongoing fight against economic tyranny as they develop!

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Comments
  1. […] the travel parking industry, citing a few examples across the country in addition to the numerous instances I have covered in this blog. This week, we’re going to examine the motivations behind this […]

  2. Thanks a great deal for your weblog.Truly searching forward to read more. Amazing.

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