My little post on do operators "manage" or "operate" got the most reaction to PT blog so far. seven comments in a couple of days. Read em here.
Many want to know how much operators pay their managers. So would I. Let’s have it — give us a garage size, annual gross, and a typical salary.
J
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I was looking back at some blog posts from 20 years ago and found this one fit today as well as at the turn of
If there is any advice I can give it’s concerning the passing scene. “Look out the window.” Rather than listen to CNN or the New
3 Responses
From reading all of the comments there seems to be a little confusion over what is being asked.
In some cases the reply refers to the actual on site manager of the facility. In other it refers to the manager as the parking management company.
In my experience I have only worked for one company where the actual on site manager received a bonus for performance from the parking management company. This is just one company out of five parking management companies. This bonus/incentive was based on a quota of cars parked. This was a valet location and the philosophy was that for every additional car at $12.00 (at the time) the lot manager hustled to get into the lot $.25 was paid to the lot manager.
I have never seen this in a park and lock facility in 30 years. I have seen bonuses at the end of the year from only one other company.
I just checked yesterday with a New York operator friend inquiring about salaries for managers. His reply was from $40,000 to $65,000 depending on the complexity of the location but the average was around $45,000.
As for Parking Operators (now you have me thinking about the use of the word Operator) or Parking Management Companies the management fees are structured in many different ways. I have seen flat fees, base plus percentage of the net profits, base plus percentage of the increase in net profits over the previous year etc..
Years ago you could get a good management contract with some decent fees and and incentive. The base could be $30,000. or higher with incentives at 5% of the profit.
These days people are really scraping for a buck. I just heard the other day that a new company just took over a quite sizeable operation from a more established and larger company. The management fee I heard was just $5,000.00 a year. Talk about a lot of work for a little bit of money.
This is an ever changing market with some companies simply driving the management fees down and the leases up. Everyday I talk with parking companies interested in acquiring locations. There are a lot of opportunities out there that I come across but very few that make any financial sense yet companies vie for them.
Ok.. I’ll go first. I manage a 8 story parking ramp (above ground) with a 4 story garage (below ground). We have 580 spaces upstairs and 275 down. Our annual revenues are $3M,tax and op.ex. are around $1M, NI is around $1.7M. I am responsible for all budgeting, forcasting, and reporting. We hire a national cleaning company to clean the ramp and we have one cleaner through them. We have a corporate accountant who prepares the reports but I work closely with her and the data and I am the one analyzing and presenting to the owner monthly. We have an operations supervisor who does most of the personel supervising, but we only have 2 casheirs besides him. The ramp pays a bonus to my operating division (Property Management); the ramp pays 20% any favorable varience in revenue. Of that I have a benifits package which includes 401k matching (50% matching up to 6% of my salary), and profit sharing potential (of the company’s bottom line). I was hired in March of ’05 and ended the year $125k favorable to budget in revenue, $250k favorable to budget in NOI, and $520k favorable to budget in cash flow. Salary = $35,000.
A little background – I have worked in the parking business for close to a decade in the midwest. Initially I worked for one of the large national players. After leaving them and staying out of the industry for a few years, I now work for a smaller regional company. I was a facility manager my first year in the industry, and since than, have been in either an Operations or General Manager role.
Since I have mostly been a Manager of Managers, my perspective is that in some cases, Parking Facility Managers are not fairly compensated which is one of the reasons why I think the management turnover may be hire than other industries.
Working for the National Company, we only hired degreed candidates with previous business experience. When you combine long hours (including being on call 24/7) and the knowledge and skills that they need to possess (from financial, customer service, HR, the ability to manage and lead while also be willing to get their hands dirty doing cashier, maintenance or valet work) it always seemed like it was a struggle and challenge to keep the top Facility Managers from leaving after 1-2 years. One trap that most managers fall into is they look at how much Net Operating Profit their properties produce and feel that they are worth more than their current pay. Quite frankly, my highest producing properties are usually sweat-heart lease deals that require little effort to run. The larger, more publicized properties (Class A Office buildings, 4-Star Hotels) in general deliver smaller profits because of the competitiveness to land those deals, but they also require a much stronger manager and more time and effort from the senior managers. An operator is also willing to sacrifice and make less profit with a “jewel” property as a strategic move when it comes to marketing to new prospective clients. So to relate an accounts Net Operating Profit with salary is not a good indicator. The complexity of the account is a better forecaster of what skill level you need in the Facility Manager.
As far as salaries go, most operators pay facility managers a salary with no bonus, supervisors are hourly while Operation Managers and up are paid Salary + Bonus Incentive. While there will be regional differences in salaries, my experience in the midwest (not including Chicago!) a Facility Manager’s salary range is $25,000 – $45,000.