Cheaper To Park Downtown At Night

August 11, 2008
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GRAND RAPIDS — It’s not free parking, but it’s not that far removed from free.

Parking Commissioners recently approved a three-month trial run that put 450 parking cards on the market for $15 a month. The cards will be good for unlimited evening parking after 5 p.m. at one of the following city-owned downtown ramps: Pearl Ionia, Monroe Center and Cherry Commerce.

The cards are good for the rest of August and all of September and October.

The two-fold purpose behind the pilot program is to increase visits to downtown nightspots and to raise revenue for the city’s parking system. The effort emerged from talks Parking Services Director Pam Ritsema had with Dennis Moosbrugger, president of the Arena District Businesses, an association of 25 downtown restaurants and taverns.

“We figure the average customer visits downtown once or twice a month now,” said Moosbrugger, who also owns Bar Divani at 15 Ionia Ave. SW.

Moosbrugger said most of downtown’s regulars are between the ages of 25 and 35 and live in neighborhoods east of downtown. When they don’t come downtown for their entertainment, he said they patronize restaurants and bars in business districts where parking isn’t an added expense for them. But he felt cheaper parking downtown could convince them to make more visits to the Arena District.

“This takes that parking negative right off the table,” said Moosbrugger.

A night of parking at the three downtown ramps costs from $6 to $7 now, and a monthly evening parking card sells for $44. Ritsema said her department has sold 25 of those cards, which are worth $1,100 a month in revenue to Parking Services. Ritsema said she expects those cardholders to switch to the $15 card, which will result in a monthly revenue loss of $725 for the department.

But Ritsema also said the pilot program has the potential to increase the department’s revenue because the three ramps being offered have plenty of spaces available at night, enough to become a new source of income. She thought downtown employees and college students taking night classes will be prime customers for the new evening card.

“If I’m an employer downtown, I’m going to give this as a benefit,” said David Leonard, parking commissioner, of the new parking card.

If Parking Services sells all 450 cards, it will receive $6,750 in monthly revenue or $20,250 for the three months targeted for the test run.

That revenue figure, though, has to be adjusted for the loss of $725 a month from the conversion of current cardholders to the lower-priced program, and a lost-opportunity cost of $2,300 a month from taking spaces at the Monroe Center and Cherry Commerce ramps off the market for events held in Van Andel Arena.

“We chose the facilities that have the lowest special events demand,” said Ritsema of the ramps in the pilot program.

Those deductions leave Parking Services with a potential monthly revenue gain of $3,725 if the pilot program sells out, or $11,175 for its three-month duration.

“It has the potential to add revenue to parking. But it also has the potential to shift existing demand,” said Ritsema. “I just want to throw this out there and see what happens.”

The Heartside Business Association supports the trial program. The arena and many of the Arena District businesses are located in Heartside.

Each $15 card sold will only be good at one ramp. Parking Services began the sale with 100 cards each at the Monroe Center and Cherry Commerce ramps and 250 cards at the Pearl Ionia ramp.

Ritsema said Parking Services and the Arena District Businesses are marketing the effort and tracking the results of the program together. Parking commissioners will get a report of the results in November.

But commissioners also learned that the overall number of overall monthly parkers in the city system was down by 226 from a year ago to 6,118 and down by 626 from October 2006, when the system reached its peak with 6,744 parkers. Ritsema said a portion of the loss was due to the opening of new, privately owned ramps downtown, such as the ones on Michigan Street Hill and at the JW Marriott hotel.

“It’s not a great time to have declining business when you’re building two facilities,” said Ritsema.

Parking Services is building ramps in conjunction with a pair of private developments going up at Fulton Street and Division Avenue and at Cherry Street and Commerce Avenue. The department is investing about $20 million in the two new ramps.

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