The Long, Ugly Road to a Federal Transportation Plan
Come September 30, Congress has to have a plan in hand to fund the nation's trains, buses, bikes, bridges and roads -- or pass an extension of the 2005 federal bill, locking in the same spending patterns that have nurtured Americans' addiction to the automobile. But the odds are that you haven't heard much about how the process works. What has to happen in order for Congress to meet that September deadline? Let's break it down a bit.
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Nicole Gelinas
I have a new report (linked below) on how to do PPPs and how not to do PPPs. The Chicago deal would fall under the second category.
To name just two reasons, the term is way too long (meaning mistakes made in favor of the concessionare are compounded over decades), and, any operational efficiencies are so small that they'll likely be overwhelmed by the private sector's higher debt and equity costs (including the equity requirement to make a profit).
PPPs are just a government tool; they are not a panacea. And as John says above, PPPs do not eliminate, or even much reduce, governments' need to prioritize infrastructure spending.
In fact, the worst PPPs are often those that seem to save the government the most money; look at the London tube deal.
http://www.citiesonahill.org/infrastructure/
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
John Kaehny
Moser raises a very important point that was discussed in the previous two posts. Chicago could have cut out the Morgan middle man and "bribed itself" with a much larger upfront payment, then used a portion of the $650 million to $1 billion above what it pocketed to pay for visible community improvements like streetscapes, bus service, library hours --- stuff the average person would notice. Motorists would still be irate about higher meter rates, but at least they and their neighbors would see more immediate benefit. Cities know how to monetize future revenue streams via bonding. If a massive one shot of 75 years of meter money is the goal, Chicago could have done it without Wall St collecting half of the new revenue.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
jass
How much have the rates gone up?
If rates had remained the same (probably if the city were in charge), how much money would we be talking about?
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Stacy
Wonderful! So many new bike lanes are cropping up faster than I can ride them,
in response to In Progress: A More Walkable, Bikeable, Trottable Park Circle
Larry Littlefield
"This post shows a lack of understanding of basic finance."
I understand basic finance perfectly well. The current generation of leaders has the highest discount rate in history. What's yours?
Mine is zero.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Jim
This post shows a lack of understanding of basic finance. PPPs don't mean a city is "losing revenue to Wall Street," it's receiving a larger upfront payment from the bank in return for giving up future revenue streams. This is in essence a loan secured by a specific infrastructure asset. If the asset is auctioned off competitively the city should come out ahead since banks now have an incredibly low cost of capital because they can borrow from the Fed discount window at zero. Additionally, they benefit if the asset is being mismanaged. The problem is not with PPPs -- the problem is the asset was sold under a less than competitive auction.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Geck
that should read counter-flow/clockwise
in response to In Progress: A More Walkable, Bikeable, Trottable Park Circle
Geck
I particularly like the incorporation of bi-directional bike lanes around the circle. I assumed we would be expected to have to go 3/4 around the circle, crossing some major interchanges to get from Prospect Park to the Parade Grounds when my son pointed out last weekend we could legitimately go counter-clockwise in the bike lane crossing only one signaled intersection. Bravo to DOT.
in response to In Progress: A More Walkable, Bikeable, Trottable Park Circle
Moser
I think some of you guys are missing the point here that the gathering ex-post-facto backlash against the deal is worse than what city government would have seen if it had just jacked up rates a few times over a number of years. It's a lesson in picking your poison to other municipal governments.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Larry Littlefield
This reminds me of the asset stripping by the Russian oligarchs after the Soviet Union fell.
After New York goes under, perhaps they'll sell the schools and future New Yorkers will have to rent them, in addition to paying debt service and pensions, before a dime of their taxes goes to their children's education.
Eliminate the up front payments, and just have ongoing revenue sharing, and the pols lose interest in the deals.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Larry Littlefield
"Larry, I missed the "greenwashing" angle. Do you mean "green" as in enviro or dollar bills?"
Greenwashing in that it was sold to some as a progressive policy, because it properly priced parking.
Kind of like selling the Brooklyn Bridge as a way to get tolls implemented without the political objection of providing a revenue stream for the MTA -- we can spend it all right now!
Give the future a nickel, take a dollar away.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Clarence Eckerson Jr.
Hoo-freaking-ray!
in response to In Progress: A More Walkable, Bikeable, Trottable Park Circle
John Kaehny
Larry, I missed the "greenwashing" angle. Do you mean "green" as in enviro or dollar bills?
There is a lot to say about PPP's and another piece is forthcoming on how to avoid the mistakes of the Chicago deal when pursuing one. Perhaps this piece suggests too strongly that PPPs must rely on upfront or "one shot" payments. Of course they could have structured the deal to have a much smaller upfront payment and on-going profit sharing. But the political foundation of the deal was getting the max possible upfront, in the shortest possible time frame.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Adam Wride
Actually, after reading that nytimes article, the citizens of Chicago need to file a lawsuit against the company or their city management. That deal is crooked.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Adam Wride
Only problem I see here is that Chicago doesn't share in profits.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Streetsman
Agreed that the whole problem was the deal structure - there should have cap at which point J.P. Morgan and the city would be sharing revenues. This is quite common in retail leases. It's hard to think of it as "lost" revenue because if not for the privatization deal, the parking rates never would have gone up in the first place. But in this sense, cities like New York are "losing" billions every year by not pricing parking at market rates.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Larry Littlefield
Bottom line -- in order to seize future revenues and spend them up front, they were willing to give up massive future revenues and sign a very bad deal. And then they greenwashed the whole thing.
Why don't we just turn over the National Parks the the Chinese? If they raise the prices high enough and do enough strip mining, travel will be discouraged and greenhouse gasses will be reduced. And the deal can always defer strip mining for 15 years, and require that those born before 1955 be allowed in for free.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
John Kaehny
The contracting process was rushed and secretive and the city did a very poor job with the contract requirements. Morgan Stanley was given the concession based on a sealed bid, not a public auction. The concession was approved by aldermen who were not provided with the current value of future parking revenue incorporating the meter hikes in the concession schedule. So they did not understand how much they were leaving on the table. Mayor Daley would appreciate many of your comments. He has repeatedly pointed out that the aldermen rejected a much more modest meter hike the previous year.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Clarence Eckerson Jr.
I gotta say, since seeing this a few days ago, I've decided it might be the one thing that will personally get me Twittering (note: we have a Streetfilms account, but that is only for news and Streetfilms stuff.)
It is genius. I am highly entertained by every tweet. I love it!
in response to Coming Soon: @FakeAlbany
AK
@Drunk Engineer,
The motion was passed with frightening speed. I don't recall if there were many other bidders, but from the time an RFP was issued to the time the sale was made, I think maybe three months had passed. It's not so much a product of "fair market price" as it is Daley and his rubber stamp city council being blinded by the shiny and rushing to make a sale without functioning as rational actors in an financial deal.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Jonathan
From the USA Today article:
I interpret this to mean that the "growth" in past years was from new construction, based on the rising-ever-upward housing market.
So if that kind of growth was sham growth, what does that say about our whole economy's growth in recent years? Sarah's right; becoming more urban, with jobs and cheaper housing, is probably the only way forward. Great post.
in response to To Thrive, Suburbs Might Become More Urban
Drunk Engineer
Was the PPP put out for bid? Did any other investor make an offer that was competitive with the contract with MS?
It would be one thing if this was a backdoor sole-source deal -- but if MS put up more money than any other bidder, then by definition Chicago got fair open-market price for an asset.
If MS figured out a way to make that asset more productive, then good for them.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Larry Littlefield
There isn't just a transfer of value from the City of Chicago to Morgan Stanley. A large share of the money would be spent up front, with no lasting value. They have simply taken future revenues away from future city residents, back door.
The current generation took an asset in inherited from the people of the past, and sold it out from under the people of the future. How could that be interpreted as anything other than generational theft?
An asset? All assets they can get their hands up, perhaps culminating with the dollar's status as a reserve currency.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Larry Littlefield
Chicago isn't building anything that will provide any benefits. All the money will be gone in a few years.
in response to Today's Headlines
brent
To J:Lai's point- if a city is not charging market rates for parking, it means money is being lost. The public is subsidizing the motoring elite's on-street car storage. At least Chicagoans got out of that predicament.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
BC
The problem here is that public entities are too dysfunctional to do what the private sector can do without fear of voter backlash or pandering politicians. PPP's wouldn't really be necessary if the public would be willing to pay for public goods, but clearly we live in a time when people don't see the benefit of investing in public goods. The only way to fix this problem is to fix the political system so that investments are made based on merit and users are charged the full cost of their consumption of a resource (be it parking, street space, CO2, etc.) In the meantime selling off public assets may be a necessary evil.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Josh
I think J:Lai raises a good point above - it's a shame that governments don't have the political willpower to charge a fair price, and outsourcing that will can produce the same effects. The Chicago taxpayers are getting ripped off because the government did an excessively poor job of negotiating price, not because of the underlying PPP concept.
(And that future taxpayers are getting boned even worse because of the lump-sum nature of the payment, but that's a separate issue.)
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
CH
This has been going on for some time and the PANYNJ is actually rather good at providing notice. You have to check the website. Once in a blue moon the website gets it wrong but usually there is notice and closures happen week by week more than day by day.
in response to Port Authority Work Puts GWB Sidewalks on Shifts
J:Lai
Larry, I think you are misinterpreting Daley's quote, although admittedly it is not that clear.
When there is an asset that produces long term cash flows, like the city's ability to collect meter fees for parking, it is a good thing if the owner can get the present value of those future revenue streams immediately.
That is how big projects, like building transit infrastructure, get financed. Without this ability, you can't do anything on a large scale.
Being able to get the money today means you can use it for the benefit of people today AND build things that will still have value generations into the future.
For instance, if NYC securitized its meter fees, it could use the upfront payment to finance construction of new rail lines. This would create benefits immediately in terms of new jobs (and graft, and kickbacks), and well into the future as the transportation infrastructure would be improved.
in response to Today's Headlines
J:Lai
While it is too bad for Chicago that they gave away a valuable asset cheaply, I don't really see a problem with these kind of arrangements.
In fact, I think it is a good thing.
When the municipal governments lacks the will or ability to charge the market price for something like parking, then by all means let a private entity step in to charge for it. The city may have mis-priced their asset in this deal, but at least the cost of parking will go up to a market rate. Even if the city gave away this concession for free, it would still be a good thing to have the price of parking increase.
I wish that New York City would hire Morgan Stanley to collect parking meter fees, because the government is clearly never going to raise the rates as high as they need to be.
in response to It's Official: Chicago Parking Privatization a Massive Rip-Off
Jonathan
Steven, good news. According to the Bicycle Access Bill, the garage at Columbus Circle, should have 23 bike parking spaces.
in response to Google Bike Parking
Bill
An interesting piece on Le Corbusier in City Journal: http://www.city-journal.org/2009/19_4_otbie-le-corbusier.html
Excerpt: "Roads were impressive thoroughfares for rushing along at the highest possible speed (he had an obsession with fast cars and airplanes), which therefore had a defined purpose and gave rise to no disorderly human interactions. The street, by contrast, was unpredictable, incalculable, and deeply social. Le Corbusier wanted to be to the city what pasteurization is to cheese."
in response to Today's Headlines
Steven
To Whole Foods Columbus Circle -
I am a frequent shopper at your store and am writing with a very specific concern.
Every time I take my bike to your store, parking is nearly impossible to find. If you look out in front of the Time Warner Center on any given day, you will see scores of bikes chained to trees and signposts. Often, there is no more space for a bike. I noticed yesterday that on one of the signposts on 58th Street, there is a sign saying bikes will be removed if attached to the sign. This is not only not encouraging customers to bike to the store - it is borderline harassment of bikers.
All of this wouldn't be so absurd if Whole Foods didn't have a policy of encouraging people to drive to the store by providing FREE CAR PARKING!
From your website -
> Public Parking
> We offer validated parking with purchase! Park in the garage at The Time Warner Center on 58th Street between Broadway and Amsterdam, and you can receive 2 hours free parking when you make a purchase of $150* or more at Whole Foods Market! Simply bring your receipt and parking stub to Customer Service after you check out and they will validate your parking for up to 2 hours.
>
I can't believe that in this day and age - with all the information about the impact of cars on global warming, asthma and other respiratory ailments that Whole Foods Columbus Circle, which sits on top of 5 subway lines and is adjacent to 2 bike paths, would encourage people to use their gas guzzling, polluting and noisy vehicles to shop there - while discouraging a healthy, clean and free alternative. Biking also contributes to community building as bikers interact more with other bikers and pedestrians than people in cars could ever dream of doing.
The back of your business cards are printed with "Whole Foods Core Values" - there are 6 of them. Number 5 states - "Caring About Our Communities and Our Environment" - I would say that when it comes to biking to your store, you fall far short of approaching this goal and appear to be working against it.
I know that the Time Warner Center controls the property etc - but as a major tenant there, I'm hopeful you could act in your customers (and the planet's) best interests by speaking with them and doing whatever is necessary to rectify this wrong. Only by speaking out is change possible.
My suggestions would be -
a) take some space in the parking garage and put bike racks in there and make them available free of charge to WF customers.
b) work with Time Warner and/or NYC Dept of Transportation to install a bike parking facility like the one on the north side of Union Square on the sidewalk near the store.
I think this would be a great boon for your store - you will be living up to your core values and you can generate some good press (have a ribbon cutting and invite Transportation Alternatives representatives to attend). You will also be making your employees healthier - I just got off the phone with Leticia - a shift manager - who told me that she has heard this complaint before - not only from customers, but from other team members who would like to be able to bike to work.
I welcome your comments and appreciate your time,
Steven Kopstein
in response to Google Bike Parking
P
When I read that quote from Daley I knew Larry would have something to say. Rightfully.
in response to Today's Headlines
Cap'n Transit
We already have @fakealbany, and we've had it at least as far back as Al Smith.
in response to Coming Soon: @FakeAlbany
Jonathan
Mark, the city is ready to spend $2.16 billion on roads and bridges in FY 2010. Link here. $9 billion is your transit figure.
There have been discussions on Streetsblog about the heavy weight of US passenger rail cars vis-a-vis lighter and more efficient Japanese models.
in response to High Hopes -- And Higher Standards -- for Bloomberg 3.0
Larry Littlefield
“The people own the asset to be used today for this generation of people and not for 2050,” Mr. Daley said soon after the Council’s parking meter vote last December. “Our responsibility is to help the generation right now.”
In fact, why invest in any infrastructure, if letting it degrade won't affect people for 20 years? And why not borrow on top of that?
And why not slash education services, and have "people right now" retire earlier?
Etc. etc. etc.
Daley isn't just speaking for himself, and he isn't just speaking about the parking meters and Chicago Tollway, or even the public sector. He is speaking about the future of the United States, built of over 200 years, based in over 50.
in response to Today's Headlines
BicyclesOnly
vnm,
The York/79th to Wall street cab share arrangement has been the subject of considerable discussion at recent Community Board 8 Transportation Committee meetings. From what I gather, the TLC established a special fare for this route (akin to the flat fare to JFK airport) and the service became very popular with local residents, who would spontaneously pool into groups at the 79th St. cab stand, ride together and split the flat fare.
Apparently the cab drivers found that these flat fare runs to Wall Street were more lucrative than randomly cruising for passengers, and began refusing passengers at 79th and York except for those offering to pay the flat fare to Wall Street. This generated antagonism among some in the neighborhood. (No one likes being turned down by an on-duty cabbie).
I don't think any definitive action has been taken, but my impression is that the CB is on course to recommend to the TLC the abolition of the flat fare. Under the proposed recommendation, passengers would still be able to spontaneously pool and share the cost of a cab ride to Wall Street, but it would have to be a metered fare.
in response to Today's Headlines
Mark Walker
Jonathan, if asphalt is that expensive, wouldn't it make more sense to invest in rails? This is the point I was moving toward.
As for "heavier and heavier vehicles" -- has the subway gained weight lately? I wasn't aware that the trains gotten heavier.
As for "fruitless and wasteful," stop the subways and buses and you'll get a terrifying definition of fruitless. Without them, the city's economy does not work.
in response to High Hopes -- And Higher Standards -- for Bloomberg 3.0
vnm
Re TLC cab sharing.
I think a formal or informal version of reduced-fare cab sharing has existed for many years to serve York Avenue to Wall Street travel. Once a cab loads up four people at designated corners, they're off to the Financial District. Does anyone have more info about this?
in response to Today's Headlines
Cap'n Transit
I'd be interested to know this, but it's a side issue. The State DOT is part of the executive branch and works for the Governor. The Commissioner resigned a few months ago, and the Governor does not seem to be making his choice of a replacement based on livable streets issues.
The next state DOT commissioner could do as much for livable streets in the region as Sadik-Khan has done. Streetsblog had more than twenty posts covering the search for a successor to Iris Weinshall, and at least five on Obama's choice for Transportation Secretary, and I think it paid off. We could get similar results with a few posts about the State DOT.
As I commented back in March, it's nice to have a livable streets perspective on Federal issues, but a Streetsblog reporter at Empire State Plaza would shine desperately needed light on developments that have a tremendous impact on the region.
in response to $266 Million to Widen the Deegan. Crumbs for a More Livable Bronx River.
Jonathan
Mark, spreading $9 billion of asphalt evenly across New York's 6,000 miles of streets would work out to 1.5 million dollars a mile.
I think Gecko has a point; continuing to spend money on heavier and heavier vehicles to transport the same basic loads is fruitless and wasteful.
in response to High Hopes -- And Higher Standards -- for Bloomberg 3.0
Mark Walker
"...there is no reason to believe that the Heathrow Project scheduled to open in 2010 will fail." Based on the history of PRT so far, there is no reason to believe it will succeed. But if it does succeed, so much the better.
Saying the transit system "blasts through 9 billion dollars a year" is typical of the scare tactics surrounding transit (and by that I mean real transit) funding. How much does it cost for asphant to keep all the cars and bikes rolling?
in response to High Hopes -- And Higher Standards -- for Bloomberg 3.0
gecko
Basic transportation technology has been around for many years and is many times simpler than the technology of the computer revolution that individuals built on their kitchen tables in in their garages.
Individuals have built small vehicle transit systems in their backyards and lawns; and where Volkswagen could justify spending one-half billion dollars to prototype the second Beetle and an additional $0.5 billion to build the production version, Geoff Barnette was able to build Shweeb (www.shweeb.com) at an extremely small fraction of these amounts.
This is the spectre small vehicle transit poses to the established transportation industry, its local monopolies, high margins, considerable human dangers, environmental devastation, and major profiteers as participants in the grave threat to civilization as we know it.
in response to Bus Rapid Transit Designs for East Side Avenues Still in Flux
gecko
Traveling on two rails, monorails, guideways etc. are very simple mechanical collision avoidance systems and it does not matter whether the vehicles are large or small except that large vehicles require much more infrastructure, have much larger stopping distances, are much more difficult to accommodate and are many times more expensive to build, adapt, and modify than small vehicles on this systems.
This is what personal rapid transit is: Small vehicles on mechanical collision avoidance systems.
It is an absolutely bizarre disconnect that some people do not understand this.
It is an absolutely bizarre disconnect that the transportation industry continues to promote such inconvenient and expensive systems when small vehicle transit is much more practical; except when you look at the huge industries involved in transportation as stake holders in continuing with the dominance of transportation systems based on freewheeling cars; probably not unlike the huge industries still trying to prevent universal health care that would eliminate the middlemen,the huge profit margins, etc.
in response to Bus Rapid Transit Designs for East Side Avenues Still in Flux
BicyclesOnly
Here's one favorite set from TA's 2008 LIC Family Bike Parade. And here are kids and parents who commute to school.
in response to Wanted: Your Photos of Kids on Bikes
MrManhattan
I think we need a law that states if you get caught smoking a joint, you get a five minute grace period before a cop can issue you a ticket.
It's only fair.
in response to City Council Parking Giveaway Will Bring More Gridlock
seo
take care sur.
in response to A Broken Hip and the Merits of Scooters
Spokker
""Police: Crosswalks don't guarantee safety"
http://www.azstarnet.com/metro/318182.php"
I saw nothing wrong with the article. The article pointed out both kinds of cases in which the motorist was at fault and ones where the pedestrian is at fault. The moral of the story is that pedestrians have responsibilities as well as drivers. They also outlined rules for motorists in the sidebar.
in response to Blaming the Pedestrian, Again
Peter Smith
Bravo to the bike people for getting out there and demanding to be treated at least equally. Ideally, pedestrians and cyclists would be given priority, but we'll get there. Big ups!
in response to Safer, More Livable Streets for the East Side -- The Campaign Heats Up