Magazine

‘San Francisco Is Back’ –

And City Park is Parking the Cars

John Van Horn

“San Francisco is back!” With that comment, City Park CEO Tim Leonoudakis launched into a glowing report on the California city’s economic prowess, and how it affected companies like his.

“‘South of Market’ is currently the hottest real estate market in the country,” he went on, speaking of the revival of the more industrial section of San Francisco. SOMA, as it is known, is home to many startups and includes substantial new office and residential construction. “It’s where ‘dot com’ startups like to set up shop, and young entrepreneurs want to live.

“Hotels have been at a record occupancies over the summer,” Leonoudakis went on. “With the America’s Cup actively racing in the San Francisco Bay in August and October 2012, along with a worldwide racing event in August 2013. Hotel rooms during peak season continue to remain scarce. The U.S. Open golf event was also in SF, with other major events continued throught the fall (i.e. Fleet Week)

One reason for the spike, he added, is that technology, IPOs and biotech are back and booming in the bay area. And this is good news for the parking industry, and for a company that has cornered the premium parking market in this town.

“People are choosing to park in off street garages with a greater degree of frequency,” Leonoudakis continued, “as a result of SFpark, the city’s venture into market-based pricing of parking meters. In some instances meter rates have increased to more than $5 an hour. That nearly matches off street rates in some areas encouraging people go directly to the garages as opposed to circling around and around.”

Over the past year or so, the San Francisco Parking Association has been actively involved in successfully lobbying the city to stop a couple of proposed anti-parking ordinances.

In one case, the city was considering a mandated parking rate structure that would require all parking facility owners to set their monthly rate based on a multiple of the hourly rate. If your first hour was $5, then the daily would be $50 and the monthly rate $1,500!

“It was the wrong approach,” Leonoudakis said. “That’s not how parking rates should be set. We were able to show alternate programs to generate more income for the City of San Francisco.”

The association is also working to alter another proposed requirement requesting each operator is to provide the City with a bond equal to 100% of the parking tax paid in the previous year.The new goal is to reduce the bond to 50% for operators in good standing with the tax collector.

“The association, working with the city, is attempting to ‘drain the swamp’ of fly-by-night parking operators that do not pay proper parking taxes or play by the rules and allow legitimate operators a level playing field,” Leonoudakis said.

“It’s expensive to run parking operations in San Francisco. [For example,] salary and benefits for a journeyman parking attendant are currently $75K a year. The parking tax is 25%. If you don’t pay union scale and don’t collect or report the tax, you can be much more competitive than operators who play by the rules.

“By working with the city to help enforce its regulations, [the association has] been effective in closing down many non-compliant parking garages and parking operators.

“The rates continue to be set by supply and demand. We have seen dramatic rate elasticity in the past year with multiple increase over the period. Car counts continue to increase in the frothy San Francisco economy.

“There is a rising demand and a diminution of supply. Parking rates in San Francisco average $350 to $400 a month, $30 to $50 a day. Leonoudakis credits his company’s success to what he calls a “Modern Parking Model.” City Park:

Investments state-of-the-art revenue control technologies.

Teaching employees to perform daily P&L, and reports that analyze various metrics.

Has hired a team of top-notch senior parking managers.

Uses Open-Book Management (OBM). The staff can track company performance and review key performance indicators. Profit sharing is included in this model.

Stresses online marketing for contract parking with a Parking Broker. The person in charge of the program for 2011 generated $400K in the first year.

Runs an ongoing 8-week managerial training program, pushing more responsibility down to the on-site managers.

Is exclusively focused on the bay area only..

Espouses a “green” approach in its garages with EV-charging stations, solar panels, CNG buses, electrical cars, Zip Cars, and bikes.

Has a Strategic Plan reviewed annually with smart, achievable goals with clear targets and reasonable time lines for deliverables that are measured throughout

the year.

City Park’s 650 employees and 80 locations make it the largest parking operator in San Francisco. It also has a transportation division that provides 120 CNG buses for the local airports, as well as transportation for some of the biggest names in Silicon Valley.

“We are proud of the fact that we transport employees for Google, Apple, Facebook and Genentech,” Leonoudakis said. “These and other companies provide transportation for their employees who want to live in the city but work on their sprawling campuses in Sunnyvale and San Jose.

“I asked one manager why they provided this perk, and he said, ‘We want our engineers to spend more time together. The extra couple of hours a day they are together [on a shuttle] is time they spend talking about their projects. Who knows, a billion-dollar idea may come on the ride as they pass SFO or Redwood City.’”

City Park has begun to focus on high-end residential towers, providing parking services for some of the biggest names in the country.

“We pride ourselves on being a high-end operation,” Leonoudakis said. “Whether it’s the most expensive residential tower in the city, or one of the five-star hotels [we serve], we have a modern operating model that fits quite well into our dynamic city environment.”



John Van Horn is Editor of Parking Today. Contact him at

jvh@parkingtoday.com.

 

Article Abstract from October, 2012




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