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Thursday, April 1, 2004

Spokane

At a glance: Anatomy of a decision

  • The decision: To lower the rate for parking in the evening and on Sundays in the River Park Square garage. Instead of $1.50 per hour, customers paid a flat rate of $2 in the evening.
  • Who made it: The Spokane Parking Public Development Authority approved a flat rate starting at 6 p.m. in June 1999 and the developer instituted them when the expanded garage opened that August. The PDA later changed the start time to 5 p.m. three months later. Both considered the lower rates temporary.
  • Why it became controversial: The evening rates were part of a new, less generous parking validation system timed for the renovated mall's opening. They provided cheaper parking for evening customers, such as movie patrons in the new AMC Theatres, which was worried about competition from other theaters in the area that have free parking. But they also knocked the garage off its revenue projections. Investors who bought bonds to buy the garage were not informed of the rate reduction, or its potential impact on the revenues that were supposed to cover garage costs.
  • What went wrong: The financial feasibility study projected that movie patrons would be the biggest new source of evening customers for the garage, and would pay $4.50 under the hourly rate. With the flat rate, evening movie customers were worth $2 to the garage. The number of evening customers has grown, but each one puts the garage $2.50 behind the projections.

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