Monroe Carell, Jr., has again taken the reins of Central Parking, the company he founded in 1968. William J. Vareschi, Jr., the former CEO and Vice Chairman, resigned in early May. Emanuel J. Eads was named President and Chief Operating Officer.
Publicly traded Central has been struggling with profits, projections and share price for the past few years. The stock was at a high of over $50 in 1999 but has steadily slipped since to as low as $8 in March of this year.
When Central bought Kinney Parking and Allright in 1998, a sizable portion of the sales prices was in stock. Lew Katz, then owner of Kinney (and current owner of the New Jersey Nets), and a representative of Apollo, then owner of Allright, became board members of Central. The stock began to slip in 1999. The board brought in Vareschi from General Electric in 2001 to attempt to shore up the falling share price and flat profitability.
Among the innovations Vareschi brought to the company was GE’s famous “Six Sigma” management strategy, even hiring a vice president to oversee the program.
However, Vareschi was unable to turn the company around and the board looked back to Carell to provide leadership. Carell then went inside his company to bring Eads to the position of President and COO. Eads has served in a variety of position of increasing responsibility since joining the company in 1974.
“I am especially pleased to have Emanuel Eads assume the role of president and chief operating officer. On a combined basis, Mr. Eads and I have some 65 years of experience in the Parking Industry and we will be leading the most experienced and professional management team in the business,” Carell said.
This statement may tell the tale. Industry experts tell Parking Today that seldom, if ever, do non-parking managers succeed in this business. “Parking isn’t McDonald’s or building jet engines,” one said. “Each location has its own unique problems and issues. It’s a relationship business and a business of details. The culture at Central had always been one of strong marketing built on relationships with landlords and management account clients. If Monroe Carell can renew that culture and cut costs, he may be able to turn it around. Central’s sheer size, however, could be a problem.”
Much of Central’s growth in the past decade has been through acquisition, with the purchase of many parking operations, small and large. The larger purchases have included northeastern firms such as Meyers, Kinney, Square and Edison Parking (as a result of the acquisition of Allright) from Texas. The company has struggled trying to move these long-time parking operators into their business model.
When PT interviewed Carell in 1999, he acknowledged the cultural problems but indicated that Central would respect each acquisition’s needs. Many in the industry felt that the company would have problems assimilating so many different operating models so quickly. It was, in fact, in late 1998, just at the time of the Allright purchase, that stock prices began to erode.
Although most parking operations were hit after 9/11, Central was literally at ground zero. Much of their bottom line income comes from New York City. The acquisition of Kinney and Allright (and hence Edison) brought with it many lease agreements in the city with potentially large income streams. Some of these garages were closed for months after 9/11 and as a result income from them was nonexistent. In the case of other Manhattan facilities, recovery has been slow.
Reading Central’s press announcements on its profits and loss, it can be seen that something as seemingly as obscure as when Labor Day falls can make a large in the company’s bottom line. It seems that if Labor Day falls late, say on the 7th of September, that means that people on vacation don’t return to work in Manhattan until six days later than normal and the loss of parking revenue for those six days can adversely affect parking income. Bad weather and the weak economy have added to the problems.
Central currently operates approximately 3,900 parking facilities in 39 states, the District of Columbia, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, Chile, Germany, Switzerland, Mexico, Poland, Spain, Venezuela and Greece.
