This is a guest post from reader taka-ite

Background

Last year Panuku Development indicated that they wanted to develop a 450 space multi level carpark on the Gasometer site in Takapuna This proposal came despite no evidence that extra parking was needed in Takapuna, however more of that later.

Public consultation on this proposal was held and this was aligned with the proposed re-development of the Anzac St car park. (It is now a matter of record the Toogood J held the consultation regarding the Anzac car park to be insufficient and he granted an injunction. Presumably the development of the Gasometer car park was similarly restrained. It is perhaps a sad indictment of such a significant project (or two projects) that such little consultation was found to have occurred.)

We have now moved on from that and the final part of the process was that the matter went to the Auckland Council Hearings Committee where it was duly approved.

I was surprised that a proposal that appeared to address a nonexistent need, that was contrary to a consultants report and that was clearly hugely expensive had gained acceptance.

I started to think that I was missing something. Why was the development of this car park so vital? I have worked in the Auckland city area on and off over the last 30 years and the revitalisation of the city has predominantly come from a massive increase in the residential population and increased public transport ridership to the city. Would that have been a better solution for developing the Takapuna metropolitan centre? Auckland Council obviously thought not.

I embarked on a series of OIA requests of Auckland Transport to see what it was that I was missing about the value of car parks. (l consider myself to be an adequate researcher, but I had been able to discover little about the Gasometer project. I could find nothing regarding the exact location, building design, effect on traffic movements, or even cost which seemed to be substantial (It was perhaps unsurprising that Toogood J came to the decision he did).

In a series of posts I will cover the answers to the OIA questions. I will start with an examination of the Ronwood Avenue car park in Manukau because I believe that is the most recently completed Auckland project I shall go on to talk of what happened with the process to arrive at the Gasometer carpark decision I shall look at all Auckland Council’s car park building operations. Finally I shall examine the Auckland Transport Parking Strategy of 2016
and examine whether it is fit for purpose

The Ronwood Avenue Car Park in Manukau

The Beginning

I have reproduced a NZ Herald article from 2012.

“Rates slashed but Manukau’s S14m parking building remains almost empty daily.

A carparking building in Manukau that cost ratepayers $14 million to build is sitting virtually empty and slashing prices to attract vehicles.

The building has been called a “dog” by councillor Dick Quax and lauded by Mayor Len Brown as a transformational project for the Manukau community – few of whom are using it.

When the Herald visited yesterday, the top two levels of the seven-storey Ronwood Ave carpark were empty and there were just 10 vehicles on the top five levels, including five Auckland Council cars.

The first and second floors had 62 and 18 vehicles respectively, but overall the 680-space carpark had an occupancy rate of just 13 per cent

It is understood the occupancy rate has improved since Auckland Transport cut the hourly rate from $3 to $1 and the all-day casual rate from $19 to $6 and $4 for an early bird special. The transport body is matching and, in some instances; undercutting its own on-street rates to lure vehicles to the carpark. The on-street charges are $1 an hour and up to a maximum of $5 for all-day parking.

The $14.05 million carpark opened on June 18 as a revenue-gathering, commercial operation by Auckland Transport An Auckland Transport spokeswoman yesterday said it was performing below budget while the new Manukau Institute of Technology campus – which is leasing 240 carparks – was still under construction.

It was also built to free up valuable land in the city centre for future development to provide another 354 leases and act as a park-and-ride facility for the new Manukau branch line railway station with 86 public spaces.

The pro-public transport Auckland Transport Blog has called the carpark a disaster and an appalling waste of money, and published aerial photographs showing it set in a “sea of car parking” at Manukau central.”

But has the performance of the car park improved since then?

Here are the answers from AT concerning the Ronwood car park building in Manukau.

Like Takapuna, Manukau is a metropolitan centre and so presumably any lessons that AT have learnt here can be applied to Takapuna?

1. With respect to the AT owned Ronwood Avenue car park building please advise the cost to construct this and also the current land valuation

“Cost to construct $14.4 million
Current land valuation $6.05 million

The cost of the carpark was $14.4 million based on the transfer value when AT was created. The current value in our books is $17.8 million based on a revaluation as at 30 June 2017. The current revaluation reflects that optimised cost to replace less an allowance for the age of the asset.”

Many have speculated on this blog as to what it costs AT to develop multi level parking buildings. Here it is, and it seems likely that the land cost in Menukau was likely to be cheaper than in many other places. Building costs have also soared since them

2. What revenue has this building produced for the last financial year (or for a full year if this is not available)? What is the Opex for this period?

Revenue: $825,000
OPEX: $682,000

The total costs (including depreciation) is $682,000 per annum. This comprises maintenance, cleaning, rates, electricity, salaries and security costs The largest operating cost element is rates expenditure at $126,000 per annum other than depreciation of $272,000

Over the next two years we have a work programme which includes capital works to enhance operational performance at the facility primarily a programme to upgrade lighting to LED at a likely cost of $225,000 realising savings of more than $200 000 per year in energy and maintenance costs. Work continues in assessing alternative ticketing system options which would also result in operational expenditure savings.

While on the face of it, it would appear that AT is making a profit on the operation of the car park:

  • In the long run, the car park needs to generate enough revenue to fund major refurbishment and eventual replacement
  • Charges and restrictions are set by our Parking Strategy based on supply and demand”

I cannot comprehend that AT takes absolutely no account of the cost of capital. Here is an investment of $24 million and the only concern is for revenue to be in excess of operational expenditure

The only aspiration is to “generate enough revenue to fund eventual replacement.” If the replacement life is 50 years then that’s an annual return of only 2% per year. I have been unable to find where this aspiration forms part of AT’s Parking Strategy

(l am surprised that savings of $200k can be achieved for lighting and maintenance costs from maintenance, electricity, cleaning, salary and security costs of only $284k (682 – 272 -126). However far be it from me to question the abilities of AT accountants; rather time for another OIA

3. If the answer is not apparent from the above, please identify the return, dollars and percentage, on (total build cost plus current land valuation).

Annual Return $143,000 (17%)
Return on Assets¹ 0.8%
¹based on 30 June 2017 total book value of $17.8 million
Note — Financial results for the year ended 30 June 2017

Remember that the retun on assets takes no account of land value.

This type of investment is simply one that the private sector would not contemplate as the return on investment is just so poor.

Leaving aside what may or may not happen in the private sector, why, given the apparent failure of this car park, that is very small returns, why would AT want to build in Takapuna?

The Price Schedule – is there a cheaper parking building anywhere in Auckland?

General Commentary.

It would be interesting to revisit why this car park was ever built However, it has been built and surely the purpose now should be to operate in terms of the Auckland Transport Parking Strategy. As Matt has said, if the car park is regularly full then the demand responsive parking policy should be applied. The online figures suggest that current prices should be reviewed. I am skeptical whether this is on AT’s radar.

The Auckland Transport Parking Strategy sets out the objectives for managing parking. Currently the top priority is to, “Prioritise the safe and efficient movement of people, services on the road network.” The second priority is to, “Facilitate a transformational shift to public transport.” It take a better brain than I have to reconcile how these two different concepts can be applied simultaneously It is I believe strongly arguable that constructing a car park
where there are the best public transport services in the area is contrary to the second objective.

One thing is certain. If the car park continues with the current pricing policy then it is discouraging public transport usage. A two stage return train journey to the Manukau Station costs 2 x $3.30 = $6.60 It is obviously more expensive than parking at the car park all day and therefore the cheap parking prices provide little incentive to use public transport In a later post I will discuss the complete Auckland Transport Parking Strategy and suggest
that it is completely unfit for purpose, although it is confusing as to its purpose.

Conclusions

The Ronwood Avenue car park has been a very poor economic performer over its whole life time and there is no indication that this will change anytime soon Surely it does not meet the standard in the Auckland Transport Parking Strategy that, “any off street parking investment should be commercially viable.

Auckland Council, AT and Panuku are all supposedly leading Auckland towards a city more focused on public transport, bike and pedestrian solutions. (l use the word “supposedly” because am deeply suspicious of the intent of any of these organisations to deliver on these objectives, the debacle of the last AT budget just one example of this). The way that AT operates the Ronwood Avenue car park gives no Indication that it is trying to increase the use of public transport.

If the Ronwood Avenue car park is any indication of what AT can achieve from operating car parks then the proposed Takapuna Gasometer project is likely to be a complete economic fiasco and a millstone for most ratepayers.

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44 comments

  1. I guess one question has to be asked and that is if car parks are a mugs game then how the hell are Wilson’s (scumbags in my opinion) managing to not only get by, but are apparently creaming it?
    Some have suggested that Wilson’s are really in the real estate game and just getting some income in the meantime. If that is the case then I don’t really have a problem with the council doing the same (provided they aren’t losing money). In 50 years time or whenever (seems to be a lot of carparks that are older than that and in 50 years we are almost certain to be less car dependent/autonomous vehicles not needed parking) the land will likely be a lot more valuable and useful for high rise development.

    As for Takapuna they should probably just leave things as they are until such time as rail arrives there. With the existing or Gasworks site it would be crazy to just build a carpark/low rise there. Build high rise with carparks underground and shops at street level. Realise the most out of the land with high rise. The gasworks site would also be the ideal terminal for a rail spur (underground cut n cover LR/HR).

    1. I agree with Akldude that the old Gasworks site would be the ideal site for the terminal of the envisioned Takapuna rail spur.
      It would therefore be absolutely criminal to use the site for an AT car parking building.

  2. I have asked AT why they wont jack up the prices and their response say they are reviewing the situation in Manukau
    Aka do nothing.

    Either the parking rate is doubled or the site is transferred to Panuku and Apartments are built around and over it.

  3. Hard as it may be to imagine for those not here then, back in the bad old drive-only days the city centre was as abaout as vibrant as Manukau City or Takapuna are now. There was an 80% driving modeshare in the am peak, pavements had the odd scattering of people, cars everywhere, empty shops, little development.

    The process of turning that condition around was gradual and had a number of contributing factors, including a boom in international students, and indeed the fact that the two universities stayed in the city centre and provided one of the few growth and vibrancy engines there for many years…

    But if there is one policy change that really did kick of Auckland’s urban revival it was the institution of parking maximums. This simply change, of taking away an enforced parking subsidy from development, and eventually pricing parking to market more, started to put a little weight onto the tiller and ship bargain to turn… (thanks planners!) eventually leading to the vast shit-fight to get Britomart built (need for good nondriving access) and the Labour-led govt funding the Busway (having previously prevented Mayor Banks from ripping up the rail network for roads), then Project Dart, and so on; leading directly to the glorious and entirely transformed and booming city we are building today.

    As the writer points out above surely this is the model for the Metropolitan Centres? Isn’t it in fact the only way? Investing in incentives (rail bus amenity) is weak and dumb while also subsidising disincentives…carparking is the lever to pull to move places up the urban quality ladder.

    If it is Council’s policy that these centres are to be of urban quality then they must build them in that pattern. And to supply more carparking and especially to then underprice it is the complete reverse of that. Stupid on a stick.

    1. Parking minimums came into the CBD in the 1980’s. The main effect they had was to encourage the development of competing retail areas. They totally rejuvenated Newmarket where an abundance of parking was created and gave a new life to St Lukes, Takapuna, Wairau Park, Lincoln Road and numerous other worn out places. The decline in the CBD was turned around by the first apartment boom and the English language industry, certainly not by parking restrictions.

        1. Removing minimums is quite different to imposing maximums. The language schools and apartments went in because the land was no longer worth building retail or offices. Those activities had been pushed out by parking limits. So now we have many centres all generating a complex pattern of trips that are more difficult to serve with PT rather than a strong centre.

      1. Newmarket, St Lukes, Takapuna, Wairau Park, Lincoln Rd… this is the start of the list of places I avoid because they have too many cars and the pedestrian amenity is poor.

        1. The only issues I find with Newmarket is Broadway and, to a lesser extent, K-Pass Rd. Once there though, Newmarket is quite a charming place with good dining and people watching. Also, it’s nice and close to the Domain and has decent PT.

          The place could benefit from another pedestrian crossing, to further disincentivise the route as a rat race though.

        2. Yes seems overall the main problem with Auckland of the recent past was basically trying to run the city centre & metropolitan centres like small town NZ. The cars and people just move to the next easiest place to drive & park to.
          I think we, the general public & media even are starting to see the light in terms of not continuing to just add more traffic lanes & parking to solve issues.
          TV3 6pm news couple of nights ago of the procurement announcement mentioning that the NW LRT line would be equivalent to carrying 6 lanes of motorway traffic or something similar IIRC.

          1. Yes if every seat is occupied and every standing position is occupied on every train in both directions you can carry around 11,000 people per hour on the light rail they are proposing. On the other hand if you assume every vehicle on a motorway is a car and every car has only one occupant then the six lane motorway will carry around 11,000 people per hour.
            The key point is PT spruikers always compare theoretical maximum PT capacity with lowest possible traffic occupancy. Just add some buses to the motorway and you get a different answer, or make the same ridiculous assumption that every passenger position is occupied and the road has about 5 times the capacity.

          2. That’s reality Miffy, nothing theoretical about it. Hop on a peak train with me Monday morning and you’ll find it fully seated and standing passengers to 4 per square meter in the vestibules. Hop on the motorway at peak and you’ll find 1.2 people per vehicle.

          3. you are assuming the motorway is always full. Equivalent of non full off peak PT is off peak motorway where there are not 11,000 vehicles per hour

  4. And I would add the Britomart. In the 90s train users to the old Strand station were measured in the hundreds each morning peak – since Britomart opened 15 years ago at the foot of Queen Street numbers have grown over 20x.

  5. I have seen several time during the weekdays, around midday it has only 1-2 car park left and some occasion it was even full.

    Around Manukau Centre in last few years around 200 or more on road car parking space has been removed (which was creating revenue with minimum opex) to create the linear park, more public space being built like Putney Way, Bus Station and cycle lane etc, Which is good and transforming the Manukau and giving options to the public.

    At this stage, this car park is not open 24hrs. New apartments, hotels are being built in and around Manukau with no or minimum car park. After they are finished and occupied, use of this car park will go up and may need to open for 24hrs. Which will generate more revenue!

    As always private companies will make more than the public because they will be more aggressive and change quickly as per the demand.

  6. The timing suggests it was a Manukau city council design project just before amalgamation
    https://www.babbage.co.nz/projects/ronwood-avenue-carpark
    and this
    “But Mr Brown, who encountered strong resistance to the carpark when he was Mayor of Manukau City, remains bullish.”
    https://www.nzherald.co.nz/aucklander/news/article.cfm?c_id=1503378&objectid=11081409

    An MIT student $10 pw parking application, which may be the reason for the low revenue as well ( $2 per day)
    http://www.manukau.ac.nz/__data/assets/pdf_file/0008/165833/RonwoodAveParking_application.pdf

    MIT Manukau has its own carparking next to its site as well.
    My conclusion is that AT inherited this lemon from Manukau City, which was championed by its then Mayor Len Brown.

    1. I guess we don’t know. It’s unclear what the process was to decide whether to build the carpark; it’s equally unclear what the process would be to pull the plug and re-purpose the land.

  7. (It is now a matter of record the Toogood J held the consultation regarding the Anzac car park to be insufficient and he granted an injunction. Presumably the development of the Gasometer car park was similarly restrained.

    I really don’t get this sentence? It seems unfinished and without context.

    1. Thanks Damian. I didn’t pass English after the fifth form so sometimes I struggle.
      In the first sentence “the” should have been “that”.
      And yes the context is missing because I decided too remove following sentences.

  8. As a comparison do you have the figures on the rate of return that we get for the existing commuter trains and bus services in Auckland. And the expected rate of return that we will get on the Light Rail that is planned. And perhaps you could add the financial rate of return on all of the cycleways that have been put in around the city.

    1. Reducing the danger presented by the motorcar is certainly adding a lot to the transport costs we’re going to be facing. Maybe if we’d factored that in before we built the traffic-inducing motorways they would never have been built.

      Retrofitting a car dependent city with safe cycling and walking infrastructure certainly isn’t a cost imposed by people simply wanting to walk and cycle places safely, of course. They’re not the ones creating the danger.

      1. Hmmm. This post is all about the rate of return of publically funded infrastructure. I was trying to keep to that subject, and merely wanted some comparisons between the financial rate of return (as per the subject) of parking buildings compared to other publically funded infrastructure. Are you able to provide those comparisons, I would love to hear them. Or would you rather hijack this forum to push some other philosophical point of view? If you want to discuss motorcars and motorways versus cycling and walking then may I humbly suggest that you do not hijack this post to do that, but start another.

    2. Graham PT is not expected to deliver a financial return, but an economic one. And it does, by every evaluation. Carparks by contrast are supposed to return financially because we know they generate driving and therefore are a macroeconomic failure.

      1. Whose “not expected to deliver a financial return” and “supposed to return financially” are you quoting. On a side note, if PT is not expected to deliver a financial return do you think that it is good investment for the NZ Superannuation Fund to be considering?

  9. A lack of mixed use such as retail and hospitality in the ground levels is a urban design issue.

    Did they think of repurpose the ground floor as retail, and the floors up as office and hotel?

    Also they should make it as park and ride – free parking when people use the HOP Card.

    They parking building is useful for social events in haymen such as big festivals and concerts.

  10. In the annual report the various departments eg water, parks, libraries, transport, communications, etc have a sections breaking down their assets, costs and expenditure. Total rates and other income.
    I have tried to get a copy but it would be clear how the property department was going.
    An annual report is the basis of a good democracy

  11. Hilarious. I’ve just received an invitation to an AT meeting, which will be a really good one, and I appreciate the invitation. But have a look at this:

    “Auckland Transport is happy to cover the cost of your parking while you attend the meeting. However, we can only cover the cost if you park in the at the Downtown carpark, which is a 5 minute walk to the Auckland Transport office.”

    No offer to cover the cost of my bus fare.

    Yet AT’s Parking Strategy says: “The management of off-street parking facilities is designed to align with AT’s strategic objectives, which are focussed on a mode shift towards public transport to help minimise traffic congestion.”

    Righteo.

    1. Heidi
      You are fortunate. I have a meeting with AT and they offered me nothing.Can I assume that the nature of my email suggested that I was not going to say nice things about them and so they weren’t going to be nice in return?

      On a more serious note I hope that you have raised the lack of PT options being offered.

  12. So if all the people who are presently taking a bus on Dominion road catchment were in the proposed light rail vehicles how full would they be. Sorry to go seriously off topic here.
    Manukau is starting to fizz a bit. The location of the railway station and now the bus station is making the place a little bit more of a pedestrian center with people walking through Hayman park to the super center and Warehouse. I was not to happy with the railway stations location in the first part but now Westfield is not the only destination its starting to make a bit more sense.

  13. The main reason the main shopping centres such as St Lukes have chocka car parks is because using a motor vehicle is usually the best way to get your purchases home. Besides, imagine the moaning there would be if a bus – or train – was full of passengers whose shopping bags took up three or four seats, and the delays when those passengers get on and off the bus.

    1. I would find carrying four bus seats worth of mall shopping to my car pretty difficult! How often does this happen to you? And who can forget all the busy metropolises of the world with no retail shopping in their city centres because people buy too much and then they can’t carry it back to their homes?!

      I can only think of one situations where using public transport for mall-type shopping could be a hassle. Buying those “big ticket” bulky items e.g a new television, fridge, furniture. But that is rare enough I doubt car parking would a problem if these were the only people using their cars to shop. Of course other solution would be to get it delivered, which was pretty much the only way people did it before cars and is still pretty common. That way has the added advantage that you don’t do your back in trying to get it out of your boot. 😉

    2. The weekly big shop by is a response to a diffuse low density city. With more dense populations the density of supermarkets also increases. Shopping patterns then change, to include more shoppers, almost daily, dropping in to pick up a single bag of groceries on the way home, just before, or after a public transport trip , or on their cycle, or walk, home. Ok they may well still occasionally take their car for a big shop, to include the heavier items such as bags of potatoes and cartons of beer. Even in Auckland today the size of supermarket carparks, compared to their turnover, substantially increases as a function of distance from the CBD.

      1. I read somewhere that the “metro” supermarkets – the smaller ones in the city centers – are, per square meter, the most profitable in the country.

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