Here’s a letter to the editor that Portsmouth attorney Duncan MacCallum submitted to the Portsmouth Herald a full week ago, but which the Herald still has not run even though the City Council’s first vote on the parking garage is tonight. The letter takes dead aim at the City’s specious claim that “the new parking garage is going to pay for itself” and that the garage “isn’t going to cost the taxpayers anything”:
To the Editor:
I see that the business community and a number of city officials are still peddling the notion that, if built, a new downtown parking garage won’t cost the taxpayers anything because the entire cost of the garage will be covered by bonds, supplemented by a modest increase in parking rates. (“City manager: Parking garage will pay for itself,” Portsmouth Herald, 2/7/15; “A Good Plan,” Portsmouth Herald, 2/6/15.) The argument goes something like this: The construction of the new parking garage will be financed solely by funds coming from bonds and, over time, the bonds will be repaid entirely by parking revenues. Hence, the new garage won’t cost the taxpayers so much as a penny.
Sorry, but I’m not buying it.
The main flaw in the proponents’ argument is that it takes a rose-colored view of the world and presupposes that everything will go as planned, and it disregards “Murphy’s Law”: If anything can go wrong, it will.
So, the parking garage isn’t going to cost the taxpayers anything because it is being paid-for entirely by bonds, is it? Try telling that to the taxpayers of Manchester, who were sold the same bill of goods in connection with the construction of the New Hampshire Fisher Cats baseball stadium twelve years ago. The $27.5 million stadium was going to be built using bonds, and the plan was that the bonds were going to be repaid exclusively though a combination of $920,000 in annual rent from the Fisher Cats plus tax revenues from a newly-built, adjoining complex consisting of a hotel, retail shops, and luxury condominiums overlooking the ballpark. The mayor and the board of aldermen approved the bonds, assuring the taxpayers that there had been “close scrutiny” of all aspects of the project and that it wouldn’t cost the taxpayers a nickel. (Editorial, Manchester Union Leader, 8/17/11.)
To make a long story short, the developers of the condominiums and the retail shops unexpectedly pulled out of the project; no retail shops or condominiums were ever built; and today the taxpayers of Manchester are repaying those bonds to the tune of a half-million dollars a year. (“Taxpayers Pitch In for Baseball Park Payments,” Manchester Union Leader, 8/15/11.)
And if you happen to have friends in Dover who are longtime residents, just ask them about the debacle known locally as the “second sheet of ice.” It was “déjà vu all over again,” the taxpayers of Dover repeating the mistakes of the taxpayers of Manchester. The City of Dover owned and ran an ice skating rink. Some thought that there should be a second one. A few taxpayer watchdogs, who were called malcontents and “nay-sayers” at the time, warned that the demand for skating was simply not sufficient to financially support the cost of building, maintaining, and operating a second rink. Proponents countered that the demand was there, and moreover the second sheet was not going to cost the taxpayers anything, anyway, for it was going to be paid-for by a bond which was going to be repaid exclusively through revenue from hot dog sales and skating fees, and not by tax dollars. You can guess the rest. The second rink was built, and it bled red ink every year of its operation until the Dover City Council, in an effort to save face, eventually swept it under the rug by “declassifying” it as an independent enterprise and by simply absorbing the cost of its construction and operations into the city’s general budget. Hence, the taxpayers of Dover are still paying off the bond today, despite the camouflage.
So much for the best laid plans of mice and men. The experience of Dover and Manchester should give pause to anyone who thinks that a new parking garage isn’t going to cost the taxpayers anything. How many opportunities will there be for Murphy’s Law to prove its own continuing vitality? Let me count the ways:
First of all, if the only way that you can balance the parking budget and make the proposed new parking garage pay for itself is by increasing the parking fees at other locations, then the parking garage isn’t really paying for itself at all. The proponents’ plan calls for across-the-board fee increases both at the existing High-Hanover parking garage and at the city’s metered, on-street parking spaces, and those increases are hefty ones.
They consist of 50% and 33% increases for on-street parking (from $1.00/hr. to $1.50/hr. in some areas, and from $1.50/hr. to $2.00/hr. in others) and of increases in the monthly fees for High-Hanover garage passholders from $135/mo. to $175/mo. for 24-hour passes and from $110/mo. to $150/mo. for 12-hr. passes. Given these circumstances, I fail to see how anyone can seriously argue that the new parking garage “is going to pay for itself.”
With his usual insight, former city councilor Jerry Hejtmanek has recently pointed out that certain city councilors sang this same tune to us three years ago in connection with an earlier plan for a parking garage, promising that the new garage wasn’t going to cost the taxpayers anything–but without any provision for increased parking fees at other locations. (“City must charge more for parking,” Letters to the Editor, Portsmouth Herald, 2/9/15.) Why do we now need substantial fee increases to make the new parking garage pay for itself, he sardonically asks, when we supposedly didn’t need them three years ago? In his letter to the editor, Mr. Hejtmanek bluntly answers his own question: “This most recent proposal requires major rate increases and thus demonstrates the falsity of their [the pro-garage city councilors’] past pronouncements.”
So, how can we now trust the current revenue projections that the plan’s proponents are peddling today? A recent comment by the city manager is anything but reassuring: “I’ve thought about getting approval of the garage first. That’s the key. A lot of things we’re going to have to think about and discuss after that.” (“Parking garage would include public art,” Portsmouth Herald, 2/27/15.) Think about and discuss after that?
Secondly, I presume that the on-street parking spaces at which the hourly rates are to be raised will not be reserved solely for the use of tourists and other out-of-town visitors. Rather, I assume that many taxpaying residents from the outlying neighborhoods will frequently–and sometimes daily–make trips downtown and will use those same parking spaces and pay those same higher rates. (At least, I am not aware of any plan for issuing free or discounted parking vouchers exclusively to residents.) Additionally, many of the monthly passholders at the High-Hanover parking garage reside in Portsmouth, and I similarly assume that there is to be no exemption from the monthly fee hikes in the instance of passholders who are residents. The reality of the matter is that all of these increases are, in effect, a disguised tax: the residents will have to pay more so that the proposed new parking garage can be financially successful.
It is an open question, of course, whether all of these rate hikes will ever be implemented. Already, there are the seeds of a revolt afoot by resident taxpayer-passholders who bristle at the prospect of a 30% to 35% increase in their monthly fees for their passes. (Martha McGovern, “Pass holders support local businesses,” Letters to the Editor, Portsmouth Herald, 2/16/15.) It remains to be seen whether our city councilors will have sufficient political courage to approve such increases in the face of such an uprising, particularly in an election year. If they do not, it will do serious damage to the city manager’s balance sheet for the new parking project.
I don’t think that shoppers, diners, and tourists are going to be too thrilled with the rate increases, either. True, rates of $1.50/hr. and $2.00/hr. are still cheap by Boston standards, but this isn’t Boston, and visitors to Portsmouth are accustomed to cheap parking. Don’t forget that those visitors used to be able to park free for the first hour at the High-Hanover parking garage–before our city councilors woke up and realized that we were giving away $400,000 in annual parking revenue by letting them do so. A 50¢/hr. increase is just one more needling annoyance which may serve as a deterrent to those who would otherwise do their shopping, dining, and sightseeing in downtown Portsmouth. Will visitors be willing to pay the increase? Only time will tell.
And finally, the biggest question mark of all: As Portsmouth becomes less and less attractive because of the continuing construction of monolithic fortresses in the downtown area and the homogenization of Portsmouth’s once unique historic character, and as it becomes more and more difficult for out-of-towners to get in and out of downtown Portsmouth because of the traffic problems that those monstrosities will create, it remains to be seen whether tourists and other visitors will continue to flock to the downtown area and fill both parking garages substantially to capacity–a supposition which I assume is part of the city manager’s math. If for any reason there is a substantial decline, the city’s 20-year plan for repaying the bond solely through parking revenues falls apart, and the taxpayers will foot the bill.
I will save for another day a more extensive discussion of the fact that the vast majority of Portsmouth’s residents simply do not want another massive downtown parking garage in the first place, as was evidenced in part by the results of the last City Council election. For the time being, suffice it to say that even if viewed strictly from an economic perspective, the proposed new parking garage is a bad deal for the taxpayers, particularly the ones who don’t live in or near the downtown area. Our city councilors and officials can go ahead and lie to themselves and can continue to believe that the proposed new parking garage is going to pay for itself if they want to. Speaking for myself, however, I have no affection for a plan that is based on voodoo economics and on revenue projections which amount to little more than wishful thinking.
Duncan J. MacCallum