Archive for the ‘Cruise Port’ Category

Last week I talked about how local governments have been putting a squeeze on 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 industry squeeze and how these efforts have progressed beyond individual instances and turned into an endemic that is having a chilling effect on the entire industry.

So what’s the motivation behind this abuse of government power? Well money of course, though more specifically budget deficits. Parking is usually one of the only sources of revenue with a low relative overhead available to most municipalities, and these funds are frequently used to pay for special projects and budget shortfalls, as well as too infrequent infrastructure improvements to parking facilities. More often, infrastructure improvements are funded with bonds, which can come back to bite the city in the ass and all too often end up being used for unnecessary projects rather than vital improvements. With so many local governments struggling with a severe shortage of funds, they’ve been leaning even more heavily on their parking revenue, and more than a few have been willing to wield their authority to squash out any perceived competition. Because hey, why rise to the challenge of your competition when you can just change the rules so no one else can play the game?

A common way that parking authorities put the squeeze on off-site operators is through the access fees they charge to allow their shuttles onto the airport. You see, for each shuttle run to the port (air or sea) a fee is charged to the offsite parking facility. These fees typically were only a few dollars if that, but whenever budget shortfalls occur or there’s a new project that needs to be funded, raising these fees is usually one of the first things that happen. Since many offsite parking businesses operate with a low profit margin, having to rely on the quantity of their business to remain profitable. As these fees have risen, parking  businesses have had to pass that access cost onto the consumer, hence the one-time access fee of a couple dollars that’s added onto your bill at most offsite parking facilities. Not only will port authorities raise these fees to beef up their budget, they’ll also wield it as a weapon against offsite businesses, such as in Port Canaveral where they wanted to raise the fee so high that it would have instantly forced the closing of all the offsite parking businesses. In other cases, such as what’s unfolding in Nashville, they’ll selectively raise the fees on offsite parking facilities (more than tripling it in Nashville) while reducing the fees for hotel shuttles to access the port, even when those hotels are actively running an offsite parking business out of their lots as many of them do these days. It is literally robbing Peter to pay Paul, and this happens because the hotels typically hold far more sway over municipal authorities as such large economic drivers in their local economies, to say nothing of the typically incestuous relationship between hotel management and the commissions that run most air and sea ports. It’s one of the oldest forms of political corruption out there and it’s alive and well in many port and parking authorities.

Another way that municipalities have been having a chilling effect on the parking industry is through the way they’ve put a squeeze on investment, slowing or preventing the growth of parking businesses. As most of us are aware, since the recession, investment capital has been much harder to come by unless you’re already a mutli-million dollar corporation. The parking business is generally seen as a safe investment, as there is very little capital or debt needed after the initial development phase and it provides stable long term returns. While there’s nothing to be done about the general investment climate but to weather it, the real damage is being done by the uncertainty that is being created by local governments. One of the three key factors in investing in parking is how stable and sustainable the business in question is, and for travel parking businesses that means how likely it is that the business will retain ownership of their land, the ability to acquire more land down the line for expansion and growth, and how likely continued access to the air or cruise port in question will be in the short and long term. Traditionally this has been a strength for parking businesses, aw air and cruise ports don’t move often and the land around them tends to be undesirable for most other business and residential concerns, but that has changed since the recession, particularly in the past year. Whether it’s Indianapolis’s airport fighting to keep parking businesses from buying land for years on end, Port Canaveral pulling a 180 and refusing to issue permits to businesses that had already bought the land and marketed their grand opening in good faith as happened to Premier Parking, or trying to seize offsite parking businesses through eminent domain as happened to Cramer Airport Parking in Pennsylvania, these actions, particularly their ramped up frequency and aggression, has made for an uncertain and unstable investment environment. While the parking management giants continue to barrel ahead and reap ever greater profits, the industry as a whole has been suffering from this uncertainty and investment crunch, something that is borne out by 2012’s being the markedly slowest year of growth since the 2008 crash.

So what’s the remedy to this endemic corruption throughout our municipal system? Well daylight seems to be one of the best solutions. Most of these things are able to happen because no one is paying attention. I’m someone who works in and writes about the parking industry, and even I find it dull at times. And of course anyone who’s been to a city council or municipal committee meeting knows that those are typically duller than traffic court. When the Port Authority in Canaveral was declaring all-out war on the parking industry, it was the public outcry in support of the only two non-cronies on the Port Commission that stopped all their shenanigans and led to the ouster of the Port Authority’s CEO and greedy-bastard-in-chief Stan Payne. At the end of the day, it’s up to the public to take a stern look at their public servants, hold them accountable and tell them to stop being lazy and corrupt and to deal with their competition by rising to the challenge instead of trying to poison the well, because, frankly, no one else is going to do it. Surprisingly, many of these incidents happen in areas that have very active Tea Party and anti-government movements, yet none of these groups have pounced on these instances of government abuse; hopefully that will change and government watchdog groups will realize that tackling these abuses are not only good for their local economy and government, but great publicity for the need for keeping an eye on the government and the good that watchdog groups can have.

The economic crash and recession has affected everyone’s lives, and it’s no secret that the travel industry has been hit particularly hard. While many sectors of the travel business have been receiving government support, whether in the form of giant subsidies like the airlines receive or marketing from local government to promote tourism, one important sector has not been completely ignored, but has been actively under siege: offsite travel parking businesses. Whether cruise port or airport parking, parking businesses across the country have been facing obstacles whose size and number the industry has never seen before.

One of those obstacles, one more easily dealt with but still of concern, has been the privatization of parking management at many cruise ports and airports. Parking authorities and management are notoriously plagued with waste, inefficiency and corruption, so much so that they’ve bankrupted cities on more than one occasion (I’m looking at you Scranton). As many municipalities have been gripped by crushing budget shortfalls, they’ve finally been paying attention to their under-utilized and mismanaged parking programs. One relatively easy solution to these problems has been to lease or contract out their parking services to a large private parking firm such as Standard Parking. These private management firms will typically pay a lump sum to lease the parking infrastructure from the city for years or even decades at a time, giving the city a big short term windfall, such as what Chicago did with their entire parking system. When they take over a parking facility, these companies frequently invest in infrastructure improvement as well as upgrading facilities with the latest parking technologies and management systems, dramatically improving service and efficiency and putting far more competitive pressure on offsite travel parking businesses.

Now this in and of itself is not a bad thing. Competition is good for the market, as it means better service and prices that more accurately reflect the level of service that you’re getting. And frankly, there are offsite parking businesses that are not well run and have only been able to survive because their county-owned competition was even worse; these businesses being forced to meet basic business standards or go under is a good thing for travelers and the parking business as a whole. Where this becomes a problem is when local governments try to interfere with the market and use their ability to control and abuse the laws and ordnances governing the business to drive out the private competition. A great example of this is Port Canaveral, Florida. I’ve written about the Port Authority there and their downright repugnant attempts to kill the local parking businesses there on a number of occasions (and about one incredibly unsavory illegal business “owner” that they allowed to operate under their noses for years with no license). And the situation there, while extreme, is far from unique. Across the country, local governments have been using their authority to unfairly bludgeon offsite travel parking businesses.

For instance, earlier this month the Indianapolis airport finally gave up their fight to keep any parking businesses from opening near the airport. You see, back in 2008 the Indianapolis International Airport moved to a new location, while at the same time not approving any permits for new parking facilities to be built near it. This move had forced a number of off-site parking facilities to close, as they no longer were close enough. It was rather shocking, as I lived in Indiana until the end of 2008 and flew out of Indianapolis frequently, and always parked in one of the close to half dozen parking facilities there. When I started working in the parking business a few years later and was looking to contact Indianapolis parking facilities, I was shocked to find that that there was only one left. That was because the Airport Authority has been wasting money in court for years fighting the development of new off-site parking, a battle which they finally gave up earlier this month after three failed appeals and more than $55,000 wasted, and more than $250,000 in legal fees spent by the business they were fighting. And all so they could maintain a government created monopoly.

And these are just a couple examples. In part two of this story, we’ll look at some of the other ways local governments have been putting the squeeze on the travel parking business and the motivations behind those moves, and how they have had a chilling effect on the investment side of travel parking, changing what was once viewed one of the most stable industries to invest in to one which now faces unprecedented amounts of uncertainty. All this and more in part two of The Big Squeeze.

I’ve said it before and I’ll say it again, there must be something in the water down in Florida. I was reminded of this when speaking with a facility cruise parking facility manager down in Port Canaveral, who was talking with me about the trials and tribulations parking operators have been put through over the past year by the Canaveral Port Authority. As some may recall, I detailed some of the Canaveral Port Authority’s blunders and mismanagement in this blog back in November. While the level of crazy seems to have peaked back then, things have far from calmed down, even with former Port Authority CEO and apparent anti-free-marketeer Stan Payne recently being fired.

Case in point, while the Port Commission backed away from the onerous fees they wanted to enact on the local parking operators, they still decided to stop issuing new permits for off-site parking facilities. This derailed the plans of a number of facilities that had been planning to open at Port Canaveral, and with them went dozens of new jobs. But for the Port Authority, this was apparently a small price to pay for the opportunity to squash any new potential competition. This move was particularly costly for Florida’s Premiere Parking company, which was in the process of opening a facility when the new permit policy forced them to close. Ironically, they had been opening a facility to replace the one run by Jose “Jay” Nieves (whose outrageous antics I have discussed before) that had been operating illegally for years with no business permit and beyond shady business practices right under Port Authority’s nose. And it wasn’t even the Port Authority that shut him down, he packed up and ran after Jeff Deal of Orlando‘s WFTV Channel 9 filed a story where he documented Nieves joyriding in a car parked at their facility. But of course when a legitimate business wants to open in the same spot, the Port Authority was all too happy to shut it down.

Besides their ongoing war against the local parking businesses, which is mostly out of the public eye, the Port Authority also managed to snag itself some spectacularly bad publicity just recently that made national headlines. As many of you probably recall, Florida youth Trayvon Martin was murdered last year by George Zimmerman under the supposed justification of Florida’s “Stand Your Ground” law. Trayvon was targeted by Zimmerman because in his paranoid mind a black teenager in a hoodie in a nice neighborhood could only be up to no good and was probably a criminal just waiting to strike, and so he confronted him with his firearm. While many details are still disputed, what is known for sure is that George Zimmerman shot and killed a teenager who had nothing but a Snapple and some Skittles in his pockets and whose only crime was being a black kid in the “wrong neighborhood”. The whole story reeks of paranoia, racism and classism. So where does Port Canaveral come in, since Trayvon’s murder happened in Sanford? Well earlier this April,  it was discovered Sergeant Ron King of the Port Canaveral Police Department had been distributing targets during firearm trainings he was running for other officers of a person wearing a hoodie with skittles and an ice tea in the pockets. For the few of you reading this that are sociopaths/investment bankers, normal human beings feel using Trayvon targets for Florida Police training is wrong and insensitive to the point of malice on about a dozen levels.

Now in the Port Authority’s defense, interim CEO Jim Walsh immediately denounced Ron King’s actions. “We are offended by this. We are outraged that one of our officers would have this conduct,” said Walsh. “It is not tolerable. It is not acceptable.” While this incident calls into question the screening process used by the Port Canaveral Police Department, the Port Authority and Police Departments responses were swift and appropriate; and frankly, given the history of institutional and overt racism that has been ever-present in Florida politics and government, you can’t say the PCPD is doing worse than average for the Sunshine State. That said, being the best polished turd of the bunch still makes you a turd. The PCPD fired Sgt. King, with Walsh commenting, “Whether it was his stupidity or his hatred, (this is) not acceptable.”

Hopefully, Port Canaveral’s capacity for craziness is waning rather than waxing, at least for the sake of the local economy to say nothing of parking facilities and all of their employees. I know that many of the facility owners and managers are anxious or worried about what the Port Authority’s next move will be, and many of them feel like their business’ future as well as their own is in the hands of the Port Authority and is therefore very uncertain. Only time will tell whether those concerns prove to be true (they’re certainly valid given the past rollercoaster of a year there.); who the Port Commission chooses as their next CEO will be a big indicator of what is to come. Hopefully whoever is chosen will. want to foster the local business community instead of fighting it, but whatever the character of the eventual CEO pick, you can be sure it’ll be covered by It’s Just Parking.

 

There must be something in the water down at Port Canaveral, or at least in the water that Port Authority CEO Stan Payne has been drinking. Over the past year, Mr. Payne has seemingly declared war on private sector parking operators at his Port, going so over the line that multiple members of the Port Commission have tried to get him to step down due to his egregious use of the Port Authority’s authority.

It began back in January, when Mr. Payne and his staff released what can only be described as an attack video on their website aimed slandering offsite parking services, saying that if you park at one rather than the port you will wait for hours, have your car damaged and broken into and your vacation ruined. The video is poorly done, the acting terrible, and their portrayal of offsite lots hilarious if you didn’t know they were being serious. While there are always some bad apples in any business, for the vast majority of parking facilities their claims just aren’t true. But hey, if you’re trying to get people to pay $34/day more for a parking space, I guess honesty is not going to be your ally. Not only did Mr. Payne come up with this video, he had it made and posted on the Port Authority’s website without bringing it to the Port Commission. Not only was there a furor from the commission, but the video was widely mocked and criticized by the local media as well. And all of this for the low, low cost of $18,000 of tax payer money to slander local businesses!

And as ridiculous as that is, it’s only the tip of the iceberg. Back at the beginning of the summer, Mr. Payne had an independent consultant brought in to do a presentation on their parking services and how they could improve them. At a recent meeting before that, the Commission had discussed numerous mostly in-house changes and improvements the Port Authority could make to improve parking revenue and traveler satisfaction, so this seemed reasonable, even if the commission was subjected to a surprise presentation by this consultant. Rather than talking about further in-house improvements that could be made, the consultant dedicated their entire presentation to painting a scary and completely untrue assessment of the “threat” presented by off-site parking facilities, and recommended various ways that the Port Authority could use it’s power to force them out of business. The Commission was then immediately called upon to vote on enacting these ideas, with no period of review or outside opinions. Despite the protests of two of the five Commission members (Mr. Weinberg and Mr. Allender), the Commission passed these new ordinances, including a moratorium on new port parking permits for any businesses and a $50 per trip fee for any offsite parking shuttle wanting to access the port. These policies would essentially kill the entire offsite parking business in Port Canaveral in one fell swoop, destroying multiple local businesses and putting dozens if not hundreds of people out of work.

And what was the reasoning for all of this? Profits. The consultant presented the offsite facilities as a clear and present danger to the Port Authority’s revenue stream. Now while that may seem like a reasonable concern (even if the response was unreasonable), it was not. The Port Authority had been making record profits. Going into the third quarter of 2012, they already had made more than $4 million more than the Port authority had made for the entirety of FY 2011. On their $20-$40/day parking, the Port made a 97% profit. The only thing they were in danger of was having to make too many deposits at the bank.

The story doesn’t end there either. Next week, I’ll talk about how the destruction of the local parking industry in Port Canaveral was narrowly averted and delve deeper into Stan Payne’s attempts to use the parking authority for his own gain.