Turn Downtowns into Shopping Malls

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Turn Downtowns into Shopping Malls

My buddy Craig Bagdon seems to gently disagree with me that the solution to downtown parking problems is to raise the prices.  He says, I think, that to compete with the "free" parking at shopping malls, downtowns should offer 2-3 hour free parking and then throw the book at violators. Here’s his pitch — my rebuttal follows:

There is no such thing as a free lunch and there is no such thing as
free parking. Every time you go to the mall and buy something, you are
paying for parking. But since that cost is hidden in the price of the
product you buy, the malls have successfully marketed their acres of
“free” parking for years to the detriment of neighboring downtowns.

What we have is a perception problem, and I can guarantee you, we
are not going to change the public’s perception that “free” parking is
better that plugging a nickel in the meter. So let’s pull out the
meters, it can be done successfully if everything is planned right.
Let’s address the issues individually;

1) Money- If you add up all of the taxes that are generated by
downtown businesses it far outstrips the amount that is generated by
parking meters. So it goes to reason that if you can increase the
amount of shoppers you will increase both sales tax receipts and
property values. Even a modest increase in tax revenues will replace
the loss of the parking revenues. I agree with you that the increased
tax revenues should be earmarked for downtown improvement and
marketing, which takes us to item number 2.

2) Marketing- You must develop a comprehensive campaign promoting
downtown that gives shoppers a reason not to go to the mall. The
campaign has to be more than just “free” parking, nobody goes anywhere
just to park their car, but it certainly must be a component.
Additionally, downtowns have a lot to offer that malls don’t; history,
public facilities (libraries, etc.), unique shops that don’t exist at
the mall, etc. Play up these differences.

3) Control- As you alluded to in your post, control is key. It is
critical to keep the stalls turning for all of the new shoppers that
are coming to see your revitalized downtown. It is important to get the
buy in of the local downtown association; they need to understand that
they are slitting their own throats by not controlling their employees
and keeping them out of customer spaces. Now it is a matter of
enforcement; make it painful for the employees to take customer spaces,
raise the fine for overtime parking, and invest in handheld tire
chalking devices to beat the cheats.

This particular program is not for every city, it works best for
smaller, secondary communities that are near major metropolitan areas.
I see that Easton has a population of 26,263 and is part of the
Philadelphia DMA; I would think that it would be an ideal candidate.

I have done my level best not to make this a product plug, but I
think it is important to know that this is not some hypothetical
exercise. We have several clients with our electronic tire chalking
handhelds that have done just what I have outlined above and they are
extremely pleased with the results.

Craig Bagdon

ParkTrak

Craig, Craig, Craig — I love your arguments. Allow me to defend my position.  When you raise the prices of "stuff" to cover the cost of parking, whether its at a shopping mall or in a downtown core, you are "taxing" everyone to provide services for a few.  The shopping center merchants raise their prices to cover increased rent that has to be charged because of acres of parking (most of which is unused except for three days a year) and everyone pays those high prices, including those who walk, take the bus, ride a horse, or teleport into the mall.

Downtown merchants will have the same issue, but in spades. The increased property values and increased property taxes will cause everything to raise in prices, not just the "stuff" people go to buy. As people move back in to central cities, they will be the classic case of paying high prices because of high rents because everyone is subsidizing parking. It not only affects the retail outlets, it affects those living in apartment buildings, high rise offices, and the like. Not only is it unworkable, it is classically unfair.

I agree that marketing is the key. But I don’t agree that "free" parking has anything to do with it. A few years ago Bill Francis did a study and found that people will come to a shopping area if there is a reason for them to come. Parking free or not, is not an issue. Its his "if you build it, they will come" theory. He studied a small "burb" in the LA area. They felt they needed more parking and wanted him to recommend more so more people would come to their downtown area. They were competing with a neighboring city. The neighboring city had a vibrant downtown with trendy shops, sidewalk cafes, music in the evening, events, theaters, and the like. They had no parking. Bill found that people were parking in muddy vacant lots six blocks away, paying $5 a bucks a car to do so, and walking to get to the neighbor’s downtown. Parking was no issue.

He then looked at Santa Monica. They had six wonderful parking structures surrounding their shopping area, Third Street. Third street was a ghost town. The structures were empty, so were the stores. Plenty of free parking, no one shopping. Then Santa Monica went through a downtown revitalization. They turned Third Street into a walking mall. Sidewalk cafe’s opened. There are street vendors. The place became a "scene." Now its jammed. No additional parking. In fact they now charge for parking in the garages. The difference was the "scene" not the parking.

That’s what Malls offer. They offer Scenes. "The Grove" in LA, "Mall of The Americas" in Minneapolis, "The Galleria" virtually everywhere.  These are destination locations. Many go not to buy, but for the ambiance, the excitement, the fun. Parking isn’t an issue.

Downtowns solve their problems by giving people a reason to come downtown, not by giving free parking.

Enforcement…You are right on the money. Enforcement has to be strong and consistent. However "asking" the merchants to tell their employees to not park in the space in front of the building is really a problem when you find its the owner himself that parks his Belchfire V12 in front of his store. Money is a motivator. Charge from the first minute. You will solve the parking problem.

The issue isn’t just the money collected, although that is important, its also motivating people to have a reason to  park in different areas  "like slightly less convenient lots" and also to immediately find a place to park, rather than "cruise" looking for empty free spaces on the street. Money is a motivator.

Its also a motivator in getting Merchants to change their habits. If parking revenues are used to clean up the area, new sidewalks, parks, lighting, and security, the merchants can be motivated to clean up their stores, too.  Downtown associations will be formed to bring in events, and promote the area. However if the merchant feels that his taxes are going to a black hole called the "general fund" there is no motivator for change.

Parking revenues can cause change in the habits of both drivers and merchants.  Works most every time.  And I wouldn’t worry about  enforcement — good solid enforcement of the parking regulations is one of the most important key factors in any parking program. However it must be consistent and fair.

There are a number of applications where "first 10 minutes free" (in front of a cleaners or donut shop, for example) is important and chalking is needed. There are a myriad other ways of collecting money and the required enforcement. All important, all necessary. The parking industry will be the beneficiary of a truly pay for parking program. Unbundle parking charges from rents and costs of merchandise, and our industry will blossom.

By the way, I found your post virtually "ad free." Well done, and welcome to PT’s Blog.

JVH

John Van Horn

John Van Horn

One Response

  1. It’s interesting how often the “get rid of the meters and make it up in sales tax” argument comes up. In a smaller community recently they removed the meters and think they’ll make up the $80,000 loss in sales taxes. In my City that would take over $5 million in “new” sales when you factor in the State’s cut of the tax income (they get the first 5% or 5.5% of the total 7%). They also don’t talk about the fact that they still have the expense of enforcement, and that without the meters as a monitoring mechanism the labor associated with that will be more intense (tickets will also be much more controversial).
    If we removed the meters in my City, we would need over $65 million in new retail sales to make up the revenue loss. Unless of course you can convince the State to simply forget about their share (fat chance).

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