City Council last week voted to extend free parking within the city from three weeks to four weeks this holiday season to help local retailers better attract business.
Finance director Bruce Moe said each week meters are bagged costs the city $43,000. As a result, the cost of the annual tradition will this year be $172,000. He cautioned the council that the city’s parking fund is not in good health.
“It’s earning enough money to pay operational costs and pay the debt service on Metlox [parking structure], but beyond that we do not have sufficient reserves, nor do we have funds being built for future capital projects, of which there are approximately $13 million of unfunded projects,” Moe told the council at its Nov. 7 meeting.
Moe suggested the council in the near future may need to consider increasing parking meter rates.
Councilperson Steve Napolitano said the foregone revenue was simply the cost of supporting local business.
“This is a great tradition in town,” Napolitano said. “There is a cost to it, but it’s a cost for competition for downtown, compared to the mall, to our neighbors, to The Point, who have free parking.”
Councilperson Richard Montgomery said the lost revenue is somewhat compensated for by increased sales tax generated by the businesses the policy supports.
“We don’t know that number, but we know it’s something — it isn’t zero, I know that,” he said. “But that $43,000 is somewhat offset… Either way, we are providing backup for our own people, versus shopping outside the city.”
Mayor David Lesser said he supported three weeks free holiday parking but not the additional week, given the state of the city’s parking fund. He also suggested the policy may actually hurt local business.
“We need to strike a balance with how long we bag our meters because it’s not just one area of the city, it’s all the city,” Lesser said. “Moreover there is hard data to suggest when you allow free parking up to two hours, vehicles don’t move. And there’s hard data to suggest that actually has an economic impact that is opposite to what you might think, which is that it prevents vehicles from going in and out and conducting their business, and thus in theory there are fewer sales transactions.”
Councilperson Amy Howarth said in normal times such data may hold true, but not during the holiday season.
“There is something strange that happens….It’s a Pavlovian trigger: ‘I am going to shop, oh my God, ‘tis the season, I feel good, it’s happy, I’m going to shop,’” she said. “So it’s a little bit different than the normal thing, and it’s good to give [retailers] four weeks.”
Councilperson Nancy Hersman said the city’s recently adopted downtown plan was very much about finding ways to support the small town feel local retailers provide.
“How do we keep retail?” she said. “By doing things like this.”
Napolitano, who directed staff to come back with proposed parking rate increases in his motion to approve the extra week, said the issue went beyond dollars and cents.
“This is, in some sense, the cost of happiness,” he said. “We are buying happiness. And happy people going downtown wanting to stay downtown longer — the spirit of the season — are going to be better all the way around and spend money and support our retailers. It’s part of what is the difference of Manhattan Beach — we are supporting happiness.”
“So the Mayor’s heart,” he added, “could grow three sizes.”
Free parking begins Nov. 27 and ends Dec. 26.
