MBTA Parking Updates FMCB Presentation May 16, 2016

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1 MBTA Parking Updates FMCB Presentation May 16, 2016

2 Parking update seeks to address 5 key questions What is the current parking revenue profile? What is the scope of parking operations and current contract status? What areas are the MBTA seeking feedback on for potential RFP? What are the capital needs of parking going forward? How are parking assets currently utilized by customers? 2

3 Parking Revenue Profile Gross parking revenue in FY16 flat, 3.5% growth projected in FY17 $50M $43.1M $42.0M $41.7M $42.0M $43.5M $40M $10.7M $10.7M $9.2M $9.8M $30M $16.4M* Expenses** Securitization*** $15.4M $15.4M $15.4M $15.4M Parking Revenue, Net $20M $15.4M $10M $17.0M $15.9M $17.4M $18.3M $9.9M 0 FY % Net Revenue FY % Net Revenue FY % Net Revenue FY % Net Revenue FY17 Baseline 42.1% Net Revenue * FY 15 increased expenses due to snow removal ($4.5M) and additional parking enforcement ** Expenses stemming from LAZ parking contract *** $1.28M monthly securitization payment 3

4 Parking Revenue Profile The Red Line and Commuter Rail Generate the Majority of Parking Revenue $12.5M $10.9M Total Gross Revenue YTD: $31.9M $4.9M Parking spots Red Line $3.1M $2.5M $1.9M $1.2M $1.4M $0.8M $1.0M$0.8M Blue Line Green Line Orange Line Greenbush Framingham/ Worcester Franklin/ Forge Park Kingston/ Plymouth Middleboro/ Lakeville Providence/ Stoughton $0.3M $0.5M $0.1M $0.2M Haverhill Lowell Needham Fitchburg/ Wachusett $1.5M Newburyport/ Rockport $0.6M $0.1M Hingham Boat Watertown Bus Yard 8,489 3,013 2,019 2,670 3,018 2,449 3,705 3,329 2,524 4, , ,934 1, Parking facilities Source: MBTA internal data. 9 months FY16 YTD (Mar16). 4

5 Current Parking Operations Overview MBTA parking is directly involved with 108 of the 140 facilities on the system 140 parking facilities located on the transit system are related to the MBTA 100 facilities are owned and fully controlled by the MBTA 8 facilities are partially controlled by the MBTA and a partner (town or RTA) Facilities are operated by the local partner via an operating and revenue share agreement 32 facilities are neither operated by nor generate parking revenue for the MBTA Controlled and owned by cities and towns or are part of station development deals 5

6 Current Parking Operations Overview LAZ Parking Currently Operates all Four Parking Regions LAZ covers all 4 parking regions: 100 facilities with 117 employees 5 year contract through Jan 1, 2018, with 1 year optional extension Can terminate at convenience with 30 day notice, for any reason Current responsibilities: parking operations, customer service, facility cleaning and basic maintenance, parking enforcement, as well as landscaping and snow plowing Management Fee: $9.1M/year excluding reimbursable expenses Flat administrative fee contract with no revenue share 6

7 Management Options Evaluating Potential Partners and Business Models MBTA released a parking management RFI on April 11 th 2016 with a goal to better understand best in class parking models and opportunities to improve customer experience: 1. Explore best in class revenue sharing models and service level agreements with vendors 2. Examine innovative services that would improve customer experience 3. Increase revenue with new technology enhancements 4. Understand potential public-private partnership opportunities 5. Consider the full customer journey parking through commute and return trip Parking RFI responses due May 16 th 7

8 Parking Capital Needs Capital Investment Questions The Parking team is actively investigating potential capital investment opportunities and is focused on: What are the capital needs of the MBTA s current assets? Which parking assets should be expanded based on their ROI profile? Which parking assets need to be completely rebuilt or replaced? Could third party partnerships provide capital funding? How should parking assets be incorporated into broader Real Estate opportunities? 8

9 Parking Capital Needs Immediate Capital Investment Needs Significant short-term capital investments are needed at MBTA parking facilities over the next 5 years to maintain minimum safety and operational standards. Lynn Garage FY16 YTD Gross Parking Revenue - $284k Short-term Capital Investment Required to Maintain Operational Effectiveness - $46M South Shore Parking Garages (Braintree, Quincy Adams, Quincy Center*) FY16 YTD Gross Parking Revenue $5.7M Short-term Capital Investment Required to Maintain Operational Effectiveness - $86M Alewife Garage FY16 YTD Gross Parking Revenue $4.3M Short-term Capital Investment Required to Maintain Operational Effectiveness - $8M Route 128 Garage FY16 YTD Gross Parking Revenue $3.8M Short-term Capital Investment Required to Maintain Operational Effectiveness - $10M Total Short-Term Capital Investment: $150 Million * Quincy Center closed in July 2012 due to structural & safety concerns; investment would be to maintain structural stability. Source: MBTA internal data. 9 months FY16 YTD (Mar16). MBTA D&C Project Briefings (Apr16). 9

10 Current Utilization Profile Results of the MBTA Utilization Study Utilization Best Practice: Greater than 85% of capacity: perceived as effectively full or over capacity Between 60% and 85% of capacity: considered within the target range of efficient operation Below 60% of capacity: considered under utilized Current MBTA Utilization: 26 facilities were consistently filled to 95% capacity or more 21 facilities were operating daily at 85% to 94% of total capacity 27 facilities were operating at 60%-84% of total capacity 26 facilities were operating below 60% capacity Focus on Improving Utilization: Encourages ridership, generates additional revenue, reduces congestion and pollution Improves the rate of return on individual under performing assets Distributing utilization creates capacity in high-demand lots, encourages discretionary ridership, and improves the ROI for the whole system 10

11 Observed Weekday Utilization Subway, Bus and Ferry Service Lines 85% or Greater Utilization 60-84% Utilization Less than 60% Utilization 105% 100% 95% 90% 85% 80% 75% 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Closed 0% Wonderland Beachmont Suffolk Downs Orient Heights Alewife North Quincy Wollaston Quincy Center Quincy Adams Braintree Savin Hill Butler Milton Mattapan Oak Grove Malden Center Wellington Sullivan Square Forest Hills Riverside Woodland Waban Eliot Chestnut Hill Lechmere Watertown Yard Hingham Shipyard Hull/Pemberton Pt. BLUE LINE RED LINE ORANGE LINE GREEN LINE BUS FERRY 11

12 Observed Weekday Utilization Commuter Rail Service Lines Operating North of Boston North Station Waltham Brandeis/Roberts Kendal Green Hastings Lincoln Concord West Concord South Acton Littleton/Route 495 Ayer Shirley North Leominster Fitchburg West Medford Wedgemere Winchester Center Anderson/Woburn Wilmington North Billerica Lowell Wyoming Hill Melrose/Cedar Park Melrose Highlands Greenwood Wakefield Reading North Wilmington Ballardvale Andover Lawrence Bradford Haverhill Lynn Swampscott Salem Beverly Depot Montserrat Beverly Farms Manchester West Gloucester Gloucester Rockport North Beverly Hamilton/Wenham Ipswich Rowley Newburyport 85% of Greater Utilization 60%-84% Utilization Less than 60% Utilization 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% FITCHBURG LOWELL HAVERHILL NEWBURYPORT/ROCKPORT 12

13 Observed Weekday Utilization Commuter Rail Service Lines Operating West of Boston Fairmount Readville Hyde Park Endicott Dedham Corporate Islington Norwood Depot Norwood Central Walpole Norfolk Franklin Forge Park/Route 495 Roslindale Village Bellevue Highland West Roxbury Hersey Needham Junction Needham Heights Newtonville West Newton Auburndale Wellesley Farms Wellesley Hills Wellesley Square Natick West Natick Framingham Ashland Southborough Westborough Grafton Worcester/Union 85% of Greater Utilization 60%-84% Utilization Less than 60% Utilization 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% FRANKLIN NEEDHAM FRAMINGHAM/WORCESTER 13

14 Observed Weekday Utilization Commuter Rail Service Lines Operating South of Boston South Station Weymouth Landing East Weymouth West Hingham Nantasket Junction Cohasset North Scituate Greenbush South Weymouth Abington Whitman Hanson Halifax Plymouth Kingston/Route 3 Holbrook/Randolph Montello Brockton Campello Bridgewater Middleboro/Lakeville Route 128 Canton Junction Canton Center Stoughton Sharon Mansfield Attleboro South Attleboro Providence TF Green Airport Wickford Junction 85% of Greater Utilization 60%-84% Utilization Less than 60% Utilization 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% GREENBUSH KINGSTON/PLYMOUTH MIDDLEBOROUGH/LAKEVIEW PROVIDENCE/STOUGHTON 14

15 FMCB Presentation Vendor Enforcement Update Update: LAZ Parking Revenue Discrepancies: Overview Based on physical car counts by MBTA Parking Dept., missing revenue was identified at three MBTA Parking Facilities managed by LAZ (North Quincy/Hancock, Lechmere and Riverside) LAZ is responsible for reimbursing the MBTA for twice the discrepancy amount, plus fines MBTA investigation is ongoing, target completion date is July 1, 2016 Action taken April, 2016 MBTA notified LAZ senior management of discrepancies and requested an investigation LAZ terminated two employees for not following proper procedures LAZ determined no revenue loss at Riverside; the car count discrepancy was due to monthly permit holders MBTA initiates its own investigation involving: MassDOT Audit and Transit Police departments. Peter Dane, parking audit specialist, hired by MBTA to assist MassDOT audit staff. Action items May/June 2016 Completion of Audit 15