Stupid Transportation Tricks
An impassioned reader asks the Boston Globe why the Massachusetts Bay Transportation Authority (MBTA is not considering expanding the heavily used garage at Alewife station.
"Re: 'Desperately seeking parking' [March 30] and the complaint from William Elliott of Acton about his problems finding a garage, the T's Joe Pesaturo is misstating the facts if he says the reason for no increase in the size of the Alewife garage is, as you quote him, 'the T is not in a financial position to acquire land for parking,'" Sue Bass wrote in an e-mail.
"In fact, the Alewife garage, though it now is only five levels, was designed to accommodate seven levels of parking. The elevator shaft, stairs, etc., go up that far—in fact, the existing elevators have blank buttons that could be used for levels six and seven.
"The T should have increased the size of the garage 15 years ago when level five started being used a lot. The argument I've heard from T planners is that the adjoining communities would protest—but I doubt that's true.
"Belmont and Arlington would use the garage a lot, if there were room; Cambridge and Somerville suffer from people driving through because they can't get into the garage. The intersection of routes 2 and 16 is jammed, all right, but getting people off the roads and onto the T would reduce the crunch, not worsen it."
Pesaturo, the MBTA's spokesman, responded: "While the garage was designed to accommodate two additional levels, no structural analysis or code review has been done to verify if the existing structure can still meet that objective.
"The existing top deck has about 650 spaces, so the potential expansion would be for approximately 1,300 spaces.
"At current construction industry pricing, the estimated project cost would be in the range of $30 [million] to $35 million. Burdened with a current debt load of more than $5 billion, the T has little financial capacity for expansion projects."
Well, at least the MBTA spokesperson is no longer claiming that more land is somehow the constraint. But the idea that the structure would not accommodate two more levels is a bit dubious: the original structural engineers seem sanguine enough about the precautions taken to ensure that the loads were properly accommodated.
The spokesman does ignore that the MBTA spent $3.6 million to address flooding and other issues at the garage, issues that more decks and appropriate design might alleviate.
But, worst of all, the idea that the MBTA could not service $30 million to $35 million of bonds is a bit silly—parking garages at busy transit stations are sure sources of revenue. Let us assume that the MBTA maintains its current parking rates ($5 per car) for the new 1300 spaces, and that each space is occupied once per weekday and once per weekend. (This is probably a very conservative estimate.) So each space generates $1,560 of revenue per year, for $2,028,000 per year for the 1300 new spaces.
If the MBTA can float debt at 4% per annum (its fixed-rate swap on recent recent 15-year floating rate debt backed by sales tax receipts was 3.84%), then we can figure its annual debt service by considering the term of the underlying debt. For bonds that amortize over 30 years, the annual debt service on $30,000,000 would be about $1,726,000. For the $35,000,000 figure, the annual debt service would be about $2,014,000. The MBTA has not floated 40-year debt in a while, but it would provide additional leeway on the debt service in exchange for a higher interest component.
Of course, the MBTA hires a contractor to manage the garage, so the entire $5 is not available for its use. But certainly the MBTA would demand a substantial cut of the added revenues, and its absolute share could increase over time, because $5 now for parking will be equivalent to a higher number in future years. And this ignores the added ridership (and fair income) that would come with additional parking spaces at a garage that has to turn away commuters most mornings.
(Note that this does not involve any financial shenanigans that the MBTA has employed in the past, such as leasing its rolling stock to banks to get a little cash at the time of its acquisition.)
In short, the idea that the MBTA is somehow constrained from financing an addition to the Alewife garage is not as obvious as the MBTA would like us to think.
Labels: Alewife, MBTA, stupid financial tricks
