Council attempts to drive up car park profits
Doubts that change from a contract to lease deal will increase revenues
The Ilac Centre car park is being leased to a private operator for five years in a move which Dublin City Council hopes will increase its own income. Photograph: Matt Kavanagh.
One of Dublin city centre’s largest car-parks, the Ilac Centre car-park, is being leased to a private operator for five years in a move which Dublin City Council hopes will increase its own income. Park Rite, an Irish company, is understood to be the preferred bidder.
Q Park Ireland currently manages the Ilac car-park on a month-to-month contract basis and has not yet been told when this arrangement will end. The council, in a statement, said: “A preferred bidder has just been identified. The terms and conditions of the lease will be finalised during the contract stage which is the next phase of the lease process.”
Some private car-park operators believe that a lease arrangement could cut the council’s income from car-parking. Up until now, the council’s three multi-storey car-parks – Ilac, Dawson (Schoolhouse Lane) and Drury – have been managed by private operators on a contract basis in return for an agreed management fee.
Under existing contract arrangements, says the council, all running costs, including the operator’s salary costs, are paid initially by the operator and recouped from the council, with all income going to the council. The drawback of this model, it says, is that there is no formal incentive for the operator to increase income or reduce expenditure. “A new leasing model has been devised which it is anticipated will result in greater levels of income and investment for the city council and at the same time be attractive to the operator,” it said in a statement.
Dublin City Council’s income from on and off-street parking is €29.1 million, with €4.6 million of this coming from its car-parks. The 1,000-space Ilac car-park is the most profitable, with an income of €2 million a year. Drury Street generates €1.4m, Dawson Street €991,000 and the car-park at the former fish market site in Dublin 7, €209,000. On-street parking generated €24.5 million in 2012.
The council owns four of the city’s car-parks, the three multi-storeys and the surface car-park, which it manages itself. Many local authority car-parks were built when there were few private car-park operators in Ireland says Keith Gavin, chairman of the Irish Parking Association, which represents all of the country’s car-park operators, both private and those owned by local authorities. But tax incentives for car park construction fuelled development of privately-run car-parks in the 1980s and 1990s.
David Cullen, CEO of Euro Car parks, which did not win the Ilac car-park lease, queries why the council is changing from a contract to a lease arrangement: he believes that business over the next five years is likely to improve, and any increase in car-count will increase income for the private operator rather than the council. Ray Teers, MD of Q Park Ireland, says “if business goes up, the city will lose” under a lease arrangement.