City Council demands cut in parking rate when tax dips

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Pittsburgh City Council joined the mayor and Downtown interests yesterday in calling for cuts in parking rates when a tax on lots and garages dips in January.

"Those rates should be reduced as we reduce the tax," said Councilman Jim Motznik, author of a nonbinding resolution unanimously approved by council that calls on all city parking providers to cut rates.

The city's largest parking providers said last week that they have no plans to change what they charge when the tax goes from 50 percent to 45 percent. The cut is expected to cost the city around $3.2 million next year.

It's the first of four state-mandated cuts in the tax, believed to be the highest in the nation, that will bring the levy down to 35 percent by 2010. The tax was raised from 31 percent in 2004 to cover budget shortfalls.

Mayor Luke Ravenstahl said he would "encourage" rate cuts, especially by the city-related Pittsburgh Parking Authority, but as of yesterday had not yet made contact with lot and garage operators.

"At a minimum, they need to adjust [rates] so that the 5 percent break in what they're paying is reflected in the costs" to consumers, said Mr. Motznik. He said he will urge state legislators to pass a law forcing the authority to reduce prices, and oppose future years' parking tax cuts if private operators don't drop their rates.

"When [council's resolution] comes, we'll re-examine [rates]," said authority Acting Director David Onorato. "We're just looking at everything" in their $34.7 million budget.

Council President Doug Shields said he's skeptical that lot owners will heed the call. "The parking business is an unregulated industry, and it will set rates according to whatever the customer will bear," he said.

Councilman William Peduto presented a 2004 e-mail from Merrill Stabile, president of Alco Parking Corp., the city's largest lot operator, pledging to lower rates if that year's jump in the tax was rescinded. He said other operators made the same pledge.

"That was the agreement that the state Legislature and city officials came to in order to reduce the tax," he said. "It was assumed that the rates would be reduced."

Mr. Stabile said he would lower his rates "in a second" if the tax was cut to 35 percent in one swoop.

As it stands, though, the city "can't have a 45 percent parking tax, which is 20 percentage points higher than the next highest rate in the country, and still have low rates," he said.

The tax means that if a parking operator needs to charge $10 to cover costs and profit, it has to tack on another $5 -- or $4.50 next year -- which goes to the city.

According to annual parking rate surveys by real estate brokerage Colliers International, monthly parking lease costs in the city jumped 15 percent after the 2004 boost. They have remained at that level, averaging $247.10 a month this year.

That ranks seventh highest in the nation, behind only New York, Boston, San Francisco, Chicago, Philadelphia and Seattle.

Mr. Stabile said it's the city, not private firms, that is cleaning up on parking. Alco "lost money over the last several years. We're finally starting to see some of the parkers come back" after a drop in business driven by the tax hike.

A union leader representing lot workers disputed that, saying Alco and other operators claimed to be making money during contract talks last year. Had they claimed to be unprofitable, the union would have had the right to review the books, said Teamsters Local 926 officer Charles Byrnes.

"None of them are hurting for money," Mr. Byrnes said. "They're gouging the public."

Since the tax hike, Downtown office leasing has been stagnant and the number of people coming to the city for lunch or shopping has dropped, said Pittsburgh Downtown Partnership President and CEO Mike Edwards.

"We think that's a pretty good indication that the parking tax has had an effect," he said. "We think that [parking providers] should lower the rate 5 percent" or plow the money saved through the lower tax into an effort to provide free or discounted weekend and holiday parking.

Attorney Walter Werner, of Cipriani & Werner, said the tax hike prompted him to reconsider his firm's Downtown location, contributing to its decision to leave for Mt. Lebanon in 2004.

"We were never going to leave town, but that was it," he said.

His attorneys now pay $82 a month for leases in a garage across the street from their office, he said. That's one-third the average city rate. "Do I miss Downtown? I do, but not that much."


Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.


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