Task force advised it must define its goals
(March 15, 2019) After roughly two-dozen members of Ocean City’s newly formed Parking Task Force tossed around ideas for several hours during its initial meeting last week, the group reconvened on Wednesday to continue to find ways to address paid parking inequities, while also examining potential parking revenue increases.
The Ocean City Council asked Mayor Rick Meehan to form the task force during a 2018 Strategic Plan meeting on parking issues.
City Engineer Terry McGean contacted consultant Dan Kupferman of Walker Parking to facilitate the meetings.
Noting the array of perspectives shared during the meeting last Wednesday, Kupferman said not all parties will get what they request.
“The task force is working together to guide the discussion to see what action, if any, should be taken,” he said.
Kupferman said paid parking should be considered a tax that is designed for control purposes and a revenue source. Currently, it represents about $4 million annually for the resort.
“It’s now counted on,” he said. “It’s budgeted, not found, money.”
The percentage of parking revenue derived from tourists needs to be ascertained to quantify data to consider potential changes, Kupferman said.
“We need to take care of [tourists] because they take care of us,” he said.
McGean said the city has previously examined the revenue potential related to expanding paid parking.
“We’ve done a lot of that work and have a decent idea,” he said. “It’s more difficult to figure out who is parking on the street right now.”
McGean provided parking data for Ocean City, which has more than 2,500 paid parking spaces, including 569 on-street, 727 in municipal lots, and the inlet lot containing 1,271 spaces. Pricing is $2 per hour for on-street and municipal lots, with the inlet lot cost set at $3 presently.
“We do have 28,000 living units, and condo owners may opt for street parking at times,” he said.
McGean said among the points the task force has to weigh would be balancing on-street paid parking with the potential introduction of a residential permit program.
“We need to look at it on a street-by-street level,” he said.
McGean said that also would require defining who qualifies as a resident.
“Does it extend to renters?” he said.
Councilwoman Mary Knight said her initial assumption is the bulk of parking revenue is paid by visitors.
“More residents know where free parking is,” she said.
G. Hale Harrison, with the Harrison Group, said the scenario varies depending on the street location.
“Lots of employees use free street parking,” he said.
Kupferman reiterated the importance of data collection.
“You need more data to discuss things and consider the impact,” he said. “It would be a knee-jerk reaction to reach a conclusion without data.”
If enhanced revenue is obtained, Kupferman recommended the funding be reinvested to improve the resort’s overall ambiance.
“A safe, well-lit, clean environment makes it more palatable to pay for parking,” he said.
To decide if a parking problem exists, the first step is to weigh supply and demand, Kupferman said.
“We need to go out and count at the key times and quantify it,” he said, “Do it block by block and look to see if there is a demand issue.”
Responding to a question about the number of times the inlet lot is full, McGean said peak car counts during the summer are typically limited to a few hours at night and the bulk of weekend days.
“Is there a consensus in the room we don’t have a problem with parking during the week?” he said. “Do we feel on weekends we have a parking problem.”
Councilman John Gehrig suggested the issue that needs to be addressed is a revenue shortage, not supply problems.
Joe Groves, Delmarva Condo Managers Association, was more direct in his assessment.
“We’re sitting here because the city needs revenue,” he said. “We’re $1.7 million short, that’s why we’re here.”
Noting the finite number of parking spaces available in Ocean City, Kupferman said the larger question is if charging for parking would enhance revenue or ultimately lose money.
“If it’s not a revenue issue, do it with time limits,” he said. “If revenue is the issue do it with paid parking.”
Kupferman also said building a parking garage in Ocean City would likely be cost-prohibitive.
“Building a paid parking garage is a very expensive proposition,” he said.
Kupferman said a 273-spot garage recently completed in his home state of Massachusetts cost just over $10 million, which equates to roughly $38,000 per space.
While annual debt service payments for a 25-year loan at 4 percent interest is around $657,000, Kupferman said the resort would earn roughly $524,000 annually if the facility was rented fully at $2 hour for 8 hours daily over 120 days.
“You only have a need for it four months a year and filling it every day for four months is still $100,000 short,” he said. “My company was founded to build parking garages ... but it is costly.”
McGean concurred with that assessment, while noting the average earning value per parking space in Ocean City is no more than $20,000 annually.
Kupferman also acknowledged that the idea of introducing paid parking can generate bad publicity.
“This is what I do for a living, so I know people will come and pay for parking,” he said. “If the supply and demand is right, people will pay.”
The challenge is balancing free, convenient and available parking options, Kupferman said.
“Paid parking was not done for revenue originally, it was done to control,” he said. “How do we make it equitable for everyone?”
Looking ahead to the next Parking Task Force meeting in two weeks, Kupferman suggested next steps should include analyzing current paid parking rates to see if they can be altered to improve revenue, consider lowering rates in certain areas and introducing a simplified rate structure for an easier user experience.