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EDITORIAL: Eight-Point Plan for Fixing Cincinnati’s Broken Parking System

Cincinnati Parking Meter
Broken and malfunctioning meters plague Cincinnati’s parking system. Photograph by Randy Simes for UrbanCincy.

We are continuing to look at opportunities inside City Hall that could help alleviate Cincinnati’s budget and pension liabilities, while also maintaining and improving service delivery.

In addition to the waste collection reforms that include a shift to a Pay As You Throw system, we will be making other specific policy recommendations that we feel will improve the quality of service delivery while also improving the City’s finances – ultimately working toward a long-term, structurally balanced budget.

Back in June 2010, UrbanCincy examined the finances of the city’s parking system. In this analysis, and comparison with cities from around the country, we discovered a broken system that was not performing the functions it needed to perform, and was not financially solvent.

As a result, we recommended a seven-year lease of all 5,700 of the city’s on-street parking meters. We estimated that such a deal could yield just over $3 million in annual payments, while also ridding the city of the associated financial liabilities. We did not estimate what an upfront payment could be due to the infinite number of variables that could affect that.

While much has changed politically since that time, the facts remain the same. Cincinnati’s parking system is broken, and is in need of immediate upgrades and reforms.

One of the first actions by the newly elected Mayor John Cranley (D), however, was to halt the signed Parking Lease & Modernization agreement, executed by former City Manager Milton Dohoney, which was structured to solve these exact problems. Under that deal the City would have leased four parking garages, one parking lot and all of the City’s on-street parking meters to the Port of Greater Cincinnati Development Authority.

The Port then agreed to work with Xerox to manage the system and implement comprehensive upgrades to the deteriorating and outdated system. This would have included electronic parking meters that accept credit cards, real-time parking availability data systems and the rehabilitation of existing lots and garages.

The deal would have also provided the City of Cincinnati with an upfront payment of $85 million, generated approximately $3 million in annual installment payments over the life of the agreement, and guaranteed approximately $98 million in capital investments into the system. For better or worse, that agreement has been jeopardized and we are essentially back at square one.

So where and what exactly is square one?

The City has been experiencing declining revenues from its parking assets for several years now. Revenue collections peaked years ago, but have been declining recently due to inadequate enforcement and the parking system’s poor state of repair. These assets require constant and expensive maintenance and upgrades, so virtually all of the money generated by the Parking System is spent maintaining the Parking System.

This is important. The Parking System does not generate any excess revenue for the city to use on other basic services.

In most years the Parking System is revenue neutral, meaning that the revenues it generates cover its expenses. This is acceptable, unless you are deferring maintenance costs in order to make the numbers match. This has been the case in Cincinnati for years, and has left the Parking System in terrible condition.

The situation has gotten worse in recent years as council has worked to balance the budget without laying off employees. In both 2010 and 2011, the city spent considerably more on the Parking System than it collected in an effort to keep it up to snuff. We are talking $3.6 million more in 2010 and $1.1 million more in 2011. This stopped in 2012 when the city cut its annual investments in the Parking System by several million dollars.

Cincinnati's Broken Parking System

For reference, investments in the Parking System today are approximately 38% lower than they were when the City invested $13.3 million into the Parking System in 2010. Over that same period, the parking fund balance has dropped from $12.5 million to $7.8 million.

Simply put: revenues are down, maintenance is being deferred and the parking fund is being depleted. This is not sustainable.

The recent proposal from the Cranley Administration, which was immediately and thoroughly rejected by just about everyone except five council members, does not address what the problems are, and therefore does not propose appropriate solutions for those problems.

The situation and trajectory is dire and UrbanCincy recommends that the City of Cincinnati move forward with upgrades to its Parking System immediately. Absent the previously agreed upon Parking Lease & Modernization deal or some other public-private partnership; here is how we suggest doing so:

  1. Issue bonds to upgrade all parking meters in the city to use the latest electronic payment collection and occupancy tracking technology. This would include pay-by-phone capabilities.
  2. Utilize the new technology to implement variable pricing structures that reflect real-time market demand. If there is a Bengals game downtown and meters near the stadium are packed, then the rates on those meters would increase, while meters further away would maintain lower rates. In neighborhood business districts the same would be true. When demand is high so should be prices. When demand is low, prices should drop accordingly to make it a more attractive option for those visiting our neighborhood business districts.
  3. Release a new application, website and text alert system that notifies drivers of parking space availability and informs them of the associated rates.
  4. Sell the city-owned parking lot at Third Street and Central Avenue so that it can be repurposed into a tax-producing property.
  5. Create a special lease agreement for city-owned parking garages and lots, so that the separate authority could manage advertising at these locations. The Ohio Revised Code currently does not grant cities authority to sell advertising in such a manner, but not allowing for advertisements is unnecessarily cutting off much-needed revenue. Let’s get creative so that we can maximize revenues without burdening our residents, businesses or visitors.
  6. Tear down the Garfield Garage, which is in greatest need of repair, and market the site to developers interested in building on it. Such a development agreement could include the provision of the same or greater number of parking spaces to be replaced – similar to the deal signed for the new residential tower to be built at Fourth and Race Streets in the place of the Pogue’s Garage. This will free the city from a major capital expense that would further deplete the parking fund in the near future.
  7. Tear down the Seventh & Sycamore Garage, which is the only thing blocking the construction of a $14.2 million, 115-room hotel and 725-space garage from being built in its place. The existing 450-space garage is also in poor condition and its removal would be another major liability coming off the City’s books.
  8. Conduct a citywide study to determine appropriate adjustments to the hours of operation for on-street parking meters on a neighborhood-by-neighborhood level.

Following through on these eight recommendations will allow the city to maintain ownership and control of its Parking System while also allowing it to make the necessary upgrades and improve the balance sheets for this portion of the budget. These changes will make the Parking System a revenue generating asset not just in rhetoric, but in reality.

The increased revenues will allow for the City to replenish the parking fund, make its upgrades and take additional revenue and use it to support other essential but non-revenue generating public services.

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Business Development News

Groundbreaking for $14M Anna Louise Inn Ends Prolonged Battle with W&S

Construction work began on the new $14 million Anna Louise Inn two weeks ago. The start of work marks the beginning of the final chapter in what has been a long, divisive battle for the 184-year-old social service agency against one of the city’s corporate giants.

Between 2010 and 2013 Western & Southern Financial Group, whose headquarters is located adjacent to Lytle Park and the existing home of Anna Louise Inn, fought the renovation of the agency’s 105-year-old home that was originally donated to them by the Charles P. Taft family in 1909.

What had started as an innocent project where the owners, Cincinnati Union Bethel, were awarded $10 million to renovate their facility, turned into an ugly battle with allegations of government misconduct and corporate bullying.

In the end, the corporation working to amass an entire district of property around Lytle Park won. Instead of renovating their long-time home, the Anna Louise Inn was forced to accept a relocation deal after the prolonged legal battle drained the organization’s finances.

The new Mt. Auburn facility will accomplish the goals of the original renovation plans. A new four-story structure will rise at 2401 Reading Road, where a historic streetcar barn previously stood, and include 85 apartments for single women looking for support. Cincinnati Union Bethel officials also say that the 1.2-acre site will include community space, private garden, computer lab and some office space for their administrators.

The project is being financial aided by an $850,000 grant from the Federal Home Loan Bank of Cincinnati and a $9.7 million financing package from U.S. Bank.

While the project is anticipated to open in early 2015, there is no word yet as to what Western & Southern will do with the building left behind by the Anna Louise Inn, but executives have previously suggested it could house the center city’s next posh hotel or luxury condominiums.

Community leaders and project officials avoided the controversial history at the groundbreaking, but the uncomfortable back story hung over the event like a thick layer of Beijing’s omnipresent smog.

“It makes no difference where Anna Louise Inn is located,” implored City Councilman Wendell Young (D). “If we applaud nothing else, let’s applaud their history, let’s applaud their work, let’s applaud their commitment, and let’s thank god we will always have Anna Louise Inn.”

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Business Development News

Uptown Leaders Aiming to Help Small Businesses with $500,000 Development Fund

Leaders in Uptown are looking for a way to further help and encourage small businesses to set up shop in region’s second largest employment center. The hope is that a new revolving loan fund will help make the business climate better for those small businesses who often have trouble with upfront capital.

Uptown Consortium President and CEO, Beth Robinson says that the decision to start such a fund came as a result of feedback received during its business retention and small business visits in 2012. Those involved expressed a frustration with being able to secure necessary upfront capital. So to help solve that, the Uptown Consortium funded a new Development Opportunity Fund with $500,000 of its own money last year.

“The whole purpose of these things is to create a supportive business environment,” Robinson explained. “We have coaching services, means of communicating and now this fund. We really want to support job creation. That’s what this is about.”

McMillan Street in Clifton Heights
Uptown neighborhoods have seen a surge of private investment in recent years, but some small businesses are struggling to get involved. Photograph by Randy Simes for UrbanCincy.

Robinson says that the fund is intended to support capital costs of new or expanding small and mid-sized businesses in the Uptown area, but that since it is funded with their own money there is a great deal of flexibility with how the money can be used.

“We’re open to whatever grows jobs in Uptown, and whatever stabilizes and moves the business districts forward,” noted Robinson.

These types of funds are typically administered by government agencies, not development corporations like the Uptown Consortium. This, in and of itself, gives the fund the much greater flexibility leaders are touting and on loan requirements.

The first and only business to take advantage of the fund so far is Stag’s Barbershop, which used $10,000 to complete a 1,400-square-foot expansion in Avondale. As a result, the neighborhood institution now offers, for the first time since its opening in the 1950s, a full beauty salon with hair, nail and feet treatments.

What that means is that applicants can apply for loans of the $490,000 in remaining funds. Should the program demonstrate viability and demand, Robinson says that it could be extended and potentially expanded.

“Since we are looking at it as a revolving loan fund, if the demand is there and it is having our desired intention, then there might be the possibility of expanding it,” Robinson told UrbanCincy.

Officials say that there are several businesses in the pipeline for loans right now, but that they are taking things on a first-come, first-serve basis. Ideally, they say, the new or expanding businesses will be located within one of the five neighborhood business districts in the area: Clifton’s Ludlow Avenue, Avondale’s Burnett Avenue, Corryville’s Short Vine, Calhoun/McMillan Streets in CUF, and Auburn Avenue in Mt. Auburn.

Those interested in learning more about the Uptown Consortium’s small business outreach programs, including this Development Opportunity Fund, are encouraged to contact Janelle Lee at jlee@uptownconsortium.org.

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Business News

Upstart Garment Manufacturer Looking to Find Its Place in Cincinnati’s Economy

Noble Denim Workshop

Noble Denim Co. started its garment operations in Cincinnati’s Camp Washington neighborhood in 2012. Since starting, the company has experienced growth and is taking a look at how their product manufacturing fits into the region’s economy.

The company operates out of the Anchor Building on Spring Grove Avenue, but much of its current manufacturing takes place in a small town in Tennessee. Noble Denim’s founder and creative director, Chris Sutton, and his colleagues made the decision to contract work out to a textiles company in Milledgeville, Tennessee that, despite employing 150 workers at its height, was on its last limb.

Those behind Noble Denim wanted to contribute to this struggling town in Tennessee and they were happy to bring jobs to this area. As Chris put it, “more jeans mean more jobs for the workers at that factory.” In addition to this, Sutton says that capacity and prior experience was more plentiful in the South.

Expanding beyond solely making jeans, Noble Denim has recently contracted out work to make sweaters in Toronto and work shirts through a mom-and-pop textile company in New York City’s once-bustling Garment District. While enthusiastic about the return of Made in America, Sutton refuses to manufacture in the U.S. out of pure sentiment. Instead, he says his focus is on his products being of the utmost quality.

Sutton says that their two-person operation made 200 pairs of jeans in their first year – almost all of which were sold in the Cincinnati area.

Cincinnati, he says, is important due to its support of new businesses and its budding design industry, which make it the natural fit to be the brains of the Noble Denim operation. The manufacturing, meanwhile, will continue to be pursued elsewhere where there is a stronger history of garment-making and readily available labor.

While Cincinnati’s manufacturing history does not seem well-positioned to take advantage of an American textile boom currently dominated by the South, Massachusetts, New York City and Los Angeles, Cincinnati does seem suited for heavier industries. And Sutton believes that Cincinnati’s manufacturing neighborhoods, and many of those around the nation, can be revived.

Many view the incredible amount of manufacturing space in the city as an untapped asset. But in order to make manufacturing in the U.S. more attractive, Sutton suggests looking across the pond.

In the United Kingdom, for example, the first six months of rent are paid for by the government and there are generally fewer risks when it comes to starting a new business. In the United States, the risks tend to be much higher and business owners are, more or less, left to their own devices in order to survive.

Going forward, Sutton says he hopes to continue to grow Noble Denim, but does not want to sacrifice quality or care along the way. “I would be willing to be the next Levi’s, as long as we could maintain the quality.”

While the reshoring narrative continues from big manufacturers like General Electric, Masterlock or Ford, it is important to remember that a new generation of small businesses and manufacturing entrepreneurs are also making their mark on the American economy. Companies like Noble Denim are helping to revive industrial towns all across the country and take advantage of the many assets that cities like Cincinnati have.

One pair of jeans at a time, Noble Denim is creating good jobs for the middle class.

Anchor Building photographs by Jacob Fessler for UrbanCincy; Noble Denim workshop photographs provided.

Categories
Business News Politics Transportation

CHART: The Best and Worst States in America for Transit Funding

According to data from the Federal Transit Authority (FTA), the State of Ohio provides some of the least amount of funding for its regional transit authorities of any state in America.

Texas, Georgia and Missouri also provide next to nothing to their various regional transit agencies, but in no other state are transit agencies as reliant on fares and local taxes as they are in the Buckeye State.

When broadening the search to examine transit agencies in the biggest cities across America, it also becomes clear that states like Pennsylvania, Utah and Maryland, Minnesota and Massachusetts invest large amounts of state dollars in transit. Some transit agencies with little state support, however, receive larger sums of money from regional transit taxes and federal aid.

Source of American Transit Funding

Ohio’s three largest metropolitan regions – all with more than two million people – are different in this regard and have the least diverse range of financial support of transit agencies nationwide. For both Columbus and Cleveland, it means that well over 90% of their total revenues come from fares and local tax dollars, while in Cincinnati it is slightly better at 84% thanks to a bit more federal aid.

“In the recession we saw transit service cut while gas prices drove transit demand to record levels,” stated Akshai Singh, an Ohio Sierra Club representative with the advocacy organization Ohio for Transportation Choice. “Roughly all of the state’s public transportation funding now goes to operating rural transit services.”

Honolulu is the only other region in the United States that has 90% or more of its funds coming from just fares and local tax dollars. Cities in other states providing next to nothing also approach this threshold, but do not exceed it as is the case in Ohio.

It recently reported that the Southwest Ohio Regional Transit Authority (SORTA) is one of the best stewards of limited financial resources, when compared to 11 peer agencies across the country. One of the key findings from Agenda 360 report was how little state financial support SORTA receives.

Part of the problem in Ohio is due to state cuts that have reduced funding for public transportation by 83% since 2000. Those cuts have forced transit agencies in the nation’s seventh most populous state to reduce service and increase fares over the past decade.

According to All Aboard Ohio, the state only provides approximately 1% of its transportation budget to transit, while more than 9% of the state’s population lives without a car.

In addition to regional transit, Ohio continues to be one of the most hostile states in terms of inter-city passenger rail. The state remains almost untouched by Amtrak’s national network and boasts the nation’s most densely populated corridor – Cincinnati to Cleveland – without any inter-city passenger rail service.

“When Governor Kasich came to office, the first thing he did was send back $400 million in federal dollars, for the 3C Corridor, on the basis that operations and maintenance would have been too onerous on the state,” Singh concluded. “Today, ODOT is allocating $240 million to build a $331 million, 3.5-mile highway extension through a 40% carless neighborhood on Cleveland’s east side, a staggering $100 million per mile new capacity road, while openly acknowledging they are reducing access for local residents.”