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New Transit Funding Sources

The City of Mississauga has ended free parking at all it's city owned lots, and city employees pay around $35/month to park in the City Centre area.
 
kEiThZ said:
Honestly, I don't see the point in the City owning Green P. They aren't charging market rates. And that has the effect of subsidizing traffic. All while the rest of us are discussing how to end traffic.

Would rather see the City sell off Green P for a few billion and reduce its debt. The money saved on debt alone would probably be more than the 40 million that Green P provides. Alternatively, take the revenue from the sale and use it to leverage other funds and turbocharge transit expansion.

The situation as it stands is very inefficient.

And I also think this is more politically tenable than raising parking fees. Raising fees will create an outcry when it's a government owned service. Less so when it's a private entity.
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Just want to clarify what you are suggesting here........when I first saw the "few billion" reference I assumed that the sold off Green P lots would, in your vision, be used for something other than their current vocation....something with some hidden unlocked value. The last bolded part, however, implies you seeing them continued to be operated by the the new buyer as parking lots. If that is what you are meaning (and I could be misreading this) how would a sale generate a few billion?

For the sake of convenience, I will use $3billion (as I think 3 is the lowest number captured by "few").......if Green P lots are generating $40 million in net revenue today a sale for $3B implies there is a private sector parking lot owner out there of substantial means that is willing to accept an unlevered return of 1.33%.....is there?

Now it may be that you are assuming the new guy will dramatically raise the rates on their lots sufficient to double the profits (this would a big raise as Green P lots in private hands would now be subject to property taxation while in city hands they are not....this lack of taxation is a part explanation of why they charge less) so if the profits did double to $80 million........produces a return to the investor of 2.67%.....again, this return is in absence of any debt that could be used to buy the asset....but the only way a levered return is higher than an unlevered return is if the debt used is at a lower rate than the unlevered return.....but I am pretty sure there are not a lot of private sector guys borrowing against parking lots at under 3%.

Now, if I could assume that I could raise the pre-debt profit to $80 million a year and I could borrow, say, 60% of my purchase price at, say, 6% (pretty aggressive assumptions for a very large loan secured by parking lots/revenue).....a borrower could now produce a levered return of about 11% on their invested $400 million.

Yes there is some value in Green P lots as a business.....but it is more likely in the high hundreds of millions than "a few billions".
 
W. K. Lis said:
Selling will only create a one-time cashflow. Look at what happened when the TTC sold its Grey Coach operation, it got a one-time cash but look at it now, begging.

Green P should at the very least increase its rates. But at the same time, the GTA or the province (not just Toronto) should put an end to free parking at shopping malls and offices.
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How do you legislate the ending of free parking at malls or offices?
 
@TOareafan

Perhaps few billion was a bit rash. But with the right zoning, could a billion not be achievable?

My issue isn't how much value could be unlocked. My issue is that as long as the City retains Green P, it will be politically unable to charge market value for parking. In effect, the City is working against its own interests.

That the sale of the lots will bring in substantial capital and take labour off the City's payrolls is an added bonus.
 
kEiThZ said:
@TOareafan

Perhaps few billion was a bit rash. But with the right zoning, could a billion not be achievable?

My issue isn't how much value could be unlocked. My issue is that as long as the City retains Green P, it will be politically unable to charge market value for parking. In effect, the City is working against its own interests.

That the sale of the lots will bring in substantial capital and take labour off the City's payrolls is an added bonus.
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The very quick math I did above shows the number (assuming continued operation as parking lots) could be in the range of a Billion (again, assuming the current Net Income is around $40 million and that could be increased)....that said if a private operator purchased the lots, the first batch of increases would simply be returned to the city in the form of property taxes (which they are exempt from now, presumably).

For example, if the $40 million "net" number was the longer term play (ie. raising the rates to market just brought in enough additional revenue to pay that new tax expense), that 11% return on a purchase financed with 60% debt at 6% and 40% equity produces a price in the 1/2 billion range.

I am not sure that 11% would attract that amount of capital given the risk profile of parking lots relative to other investments (ie. if you bought a $10 million apartment building at an unlevered return/cap rate of 5% and put a 75% CMHC insured mortgage on that....you produce a return on equity (levered) of 10.25%) but you would definitely need to be into double digits on a return basis (particularly on a deal that size) so a billion is tough go and, certainly, a "few" would be unachievable.

As for "zoning" that would imply an alternative use for the properties and not as an operating parking business.......that would need a look at the specific sites and possible uses but my guess is that some would be winners and some not and that it might balance out to a figure similar (or lower) than as parking.

Not sure the labour is an issue.........it is already accounted for in the net figure of $40 million....no?
 
W. K. Lis said:
User fees payable to the local municipality for the unproductive use of the land. But it needs provincial legislation because if only Toronto does it, the surrounding cities may not.
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If the municipalities felt it was an unproductive use of land....they have the power to just not approve their construction....no?
 
W. K. Lis said:
User fees payable to the local municipality for the unproductive use of the land. But it needs provincial legislation because if only Toronto does it, the surrounding cities may not.
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Or as a Metrolinx fee. But yes, I agree it needs to be at a level higher than the municipality in question.

The only thing that could be a bit dicey with a parking space tax is that most (if not all) municipal ZBLs mandate a minimum number of parking spaces per sq ft of space. The exact number varies depending on the use. I could see that being challenged in court very quickly if such a fee is enacted.

From personal experience, I've encountered quite a few times when designing a site plan that the minimum number of parking spaces required by by-law was more than what the property owner felt would be needed. But the extra spaces were put in anyway, because it was in the by-law. The property owner wasn't very happy about the added construction costs (more area to pave), but if they're suddenly charged a per space annual fee on top of that? I think you'd be in for a fight.
 
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Of course all of this is purely academic as making a new set of recommenadations may make some people feel good about potential revenue sources and certianly is a make-work project for those doing the study, it mean nothing.

Any city can come out with areas of revenue, that's the easy part. The hard part is finding the elected officials with enough balls to actually implement them. No doubt after the report is finally tabled it will need to go into further study and then wait til after atleast one more municpal election. all the touchy feely transit supporting politicians will support new revenues but only if it doesn't effect their chances for re-election.

This is the exact same scenario that is going to take place with the Gardiner. There will be studies on how to pay for it which will sit and collect dust and by the time 2018 rolls around and the city must repair/remove the freeway, the new revenue tools will not be in place and the Gardiner repairs will have to come out of general revnues.

The reality is that Toronto has had huge revenue tools for over 40 years but refused to implement them. That's not just right-wing Ford supporters but also left-wing Millerites. The DVP and Gardiner have been potential cash cows for decades but the city due to lack of fortitude and political inertia have decided not to raise that potential revenue and hence you now have the system you have now which is barely different from the one you had 30 years ago.
 
Ignore lists are advisable for quite a few members on this board, and I'm sure that varies depending on you. But don't be afraid to use them!
 
ssiguy2 said:
Of course all of this is purely academic as making a new set of recommenadations may make some people feel good about potential revenue sources and certianly is a make-work project for those doing the study, it mean nothing.

Any city can come out with areas of revenue, that's the easy part. The hard part is finding the elected officials with enough balls to actually implement them. No doubt after the report is finally tabled it will need to go into further study and then wait til after atleast one more municpal election. all the touchy feely transit supporting politicians will support new revenues but only if it doesn't effect their chances for re-election.

This is the exact same scenario that is going to take place with the Gardiner. There will be studies on how to pay for it which will sit and collect dust and by the time 2018 rolls around and the city must repair/remove the freeway, the new revenue tools will not be in place and the Gardiner repairs will have to come out of general revnues.

The reality is that Toronto has had huge revenue tools for over 40 years but refused to implement them. That's not just right-wing Ford supporters but also left-wing Millerites. The DVP and Gardiner have been potential cash cows for decades but the city due to lack of fortitude and political inertia have decided not to raise that potential revenue and hence you now have the system you have now which is barely different from the one you had 30 years ago.
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JayBeeGooner said:
Your anti-toronto tirades are getting tiresome.
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innsertnamehere said:
Ignore lists are advisable for quite a few members on this board, and I'm sure that varies depending on you. But don't be afraid to use them!
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SSIGuy can be harsh at times but he's not trolling. Being unfair at times..yes. And this is from someone who is hard on TO a lot. instertnamehere is easily one of the best Transit posters here. I would probably be a mess if he didn't keep us updated on progress.
 
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Lets try not to get into name calling here.

It's honestly kind of surprising to have me called a transit expert.. All I ever do is scan through some EAs and keep myself posted on all GTA transit related news. I'm just a normal guy living on the fringe of the GTA.
 
innsertnamehere said:
Lets try not to get into name calling here.

It's honestly kind of surprising to have me called a transit expert.. All I ever do is scan through some EAs and keep myself posted on all GTA transit related news. I'm just a normal guy living on the fringe of the GTA.
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I think we all want the best. It's just that people like SSI and myself are just disappointed in Toronto's and the GTA's politics at times. Of course other regions have similar issues but the characters involved make it worse.
 
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