The city of Hartford is considering significantly raising fees on downtown parking-lot operators, a move that will help raise new revenue, but also likely lead to higher parking rates for consumers.
The city council is scheduled to vote on an ordinance change at its Dec. 14 meeting that would increase the biennial permit fees it charges downtown parking-lot operators from a maximum of $1,000 per parking lot to as much as $28,900 or more, depending on the number of spaces in a particular lot.
The new higher fees, which appear to have widespread city-council support, would then double in 2025, and double again in 2030.
The move, which doesn’t apply to residential parking lots, aims to raise new revenue for a city that was on the brink of bankruptcy just a few years ago. But it also has a long-term goal of making it less financially appealing to operate parking lots downtown, hoping that spurs developers to turn some empty lots into new apartment, office, retail or other types of buildings that add to Hartford’s vibrancy and grand list.
The pending ordinance change is likely to draw the ire of two major Hartford-based parking operators: Propark and LAZ Parking, whose founder and CEO Alan Lazowski is also a major downtown investor and landlord.
Lazowski, who has previously been outspoken against efforts to increase the cost of operating downtown parking lots, declined to comment on the higher permit fees. Propark did not respond to a request for comment.
Hartford Mayor Luke Bronin also declined to offer his opinion on the proposed ordinance change, which was introduced by all nine city council members.
“This might have the beneficial effect of causing parking-lot operators to think a [little] more critically about how many parking spaces they actually need,” said city councilor John Gale, a main proponent of the higher parking fees. “I think everybody agrees … it is [past] time we try to reduce parking spaces downtown and increase development downtown.”
Gale has long championed finding ways to get Hartford’s abundance of vacant downtown lots converted into new development. In fact, a few years ago he was the main backer of a controversial proposed land value tax that would have charged owners of undeveloped land near Bushnell Park higher taxes to spur new construction.
That plan garnered opposition from Lazowski and other realty experts who said it would do nothing to incentivize actual new ground-up development, which not only requires demand but also major city and state incentives in order to overcome Hartford’s exorbitant property tax rate and the overall high costs of new construction.
Gale said he ultimately dropped that plan because it could have the unintended effect of raising taxes on some buildings by hundreds of thousands of dollars. The new permit fee hikes, he said, specifically target parking lots. He added that the initial fee increase shouldn’t burden parking-lot operators much, since they could pay it by raising customer prices by less than $3 per week, by his calculations.
Missing out
About 17% of downtown Hartford’s 2 square miles is occupied by parking lots, according to Norman Garrick, a UConn civil engineering professor whose research on Hartford was used by the city council to form the permit fee hike proposal. That’s about 80% more land dedicated to parking than in cities with similar populations, like Cambridge, Mass., and Arlington, Va.
In addition to wasting space that could be occupied by businesses or housing, Hartford is missing out on some $20 million a year it could collect in property taxes, if buildings were constructed on the lots, Garrick’s research found.
“We’ve operated on the premise that parking is free, and it’s destroyed the city of Hartford in some ways,” said Garrick, who pointed out that neighboring West Hartford has much stricter parking regulations. “This land is in the middle of our city and it shouldn’t be used in this way without revenues coming to the city.”
If the ordinance change is approved, the annual revenue the city collects from parking-lot operators would rise from less than $30,000 to more than $100,000, Gale said. That will be much-needed tax revenue, following years of municipal austerity in the wake of Hartford’s near bankruptcy in 2017, he said.
Gale wrote the proposal, which updates a 2002 ordinance that sets fees and upkeep requirements on commercial non-residential surface lots downtown. The original ordinance charged $500 biennially for lots with a capacity of between 16 and 30 vehicles; $750 for lots with up to 50 vehicles; and $1,000 for lots with more than 50 spaces. The original ordinance also includes landscaping requirements and does not apply to closed parking garages.
If passed, the updated ordinance would create 13 different permit fee structures based on lot size. For example, a lot with 16 to 30 motor vehicles would have to pay a biennial permit fee of $2,000, up from $500 today. Lots with more than 250 vehicles would have to pay $28,900 plus an additional $2,500 for every additional 20 vehicles (under that scheme a lot with 305 vehicles would have to pay a $36,400 biennial fee).
The proposal also expands the ordinance so it applies to parking garages. The fees would double in five years, and double again in a decade. Commercial parking lots outside of downtown would also see more modest permit fee increases.
“It’s a small step, but it’s a really, really important step,” Garrick said. “It sends an important message that we’re starting to take this stuff seriously.”
Anthony Cherolis, a longtime public transportation advocate in Hartford who urged city councilors to pass the updated ordinance, said he supports the measure, but would have hiked fees more than what’s being proposed. But when fees are doubled in the years ahead, it could lead parking-lot operators to cut down the amount of space they use.
“I think at that point the [financial] pressure is going to be more significant,” Cherolis said. “I think there’s definitely an awareness that those surface lots especially are not paying into the grand list to the level they should.”
Hartford has faced significant challenges growing its grand list over the last few decades, which has contributed to its budget struggles.
Hartford’s $4.1 billion grand list is valued nearly 30% below what it was near the turn of the 21st century, and 37% below its 1990 peak of $6.5 billion.
By comparison, neighboring West Hartford — one of the region’s wealthier communities with half the population of Hartford — has a $6.4 billion grand list.
No panacea
However, even if the ordinance change has the intended effect of freeing up space downtown, there’s no guarantee developers will come calling, said Michael Freimuth, executive director of the Capital Region Development Authority (CRDA), a quasi-public development agency.
Hartford’s high property tax rate — 74.29 mills, by far the highest in the state, and among one of the highest in the nation — is a major impediment to ground-up development, and most newly built projects in the city require public subsidies and/or tax breaks, in addition to other funding sources like tax credits.
Some realty experts have argued efforts to force development — like taxing parking lots at a higher rate to make it less appealing to sit on vacant properties — could backfire on the city, leading developers to simply avoid Hartford.
The largest ongoing construction project in Hartford — the Downtown North mixed-use development — wouldn’t be possible without funding from CRDA, which has invested more than $100 million of bonded state taxpayer money in recent years to help finance construction of nearly 2,000 apartment units downtown.
“I think, at best, this would have a marginal, if any real impact on the decision to move forward with ‘vertical’ development by property owners,” Freimuth said of the permit fee hikes. “Market demand will drive the decision more than an increased cost.”
Hartford city councilor Josh Michtom said the higher fees wouldn’t be a panacea to reducing Hartford’s glut of downtown parking lots, but it’s a step in the right direction.
“I think this is a piece of that puzzle,” Michtom said. “I hope that it’s part of a larger project that reorients us toward more walkable, denser Hartford.”
