In 2011, Adam Meinstein, a Philadelphia-based real estate developer, bought an abandoned post office on the outskirts of downtown Harrisburg.
In many ways, the property was a natural fit for Meinstein’s company, an investment and development firm called Equilibrium Equities. Founded in 1995, the company invests in industrial facilities in the northeast, mostly in Pennsylvania. The old post office, formerly the Keystone branch of the United States Postal Service, was the region’s primary sorting facility for 50 years. Located on Market Street, just east of the Mulberry Street bridge, it sits on an 11-acre parcel in a former industrial zone, adjacent to several parking lots and warehouses.
The property also had two notable features: it bordered an Amtrak station, and it contained an out-of-use parking lot with hundreds of open spaces. These had also caught the eye of the state Department of Transportation, which had been looking for ways to remedy a problem with the Harrisburg train station. Because of the cost of parking downtown, riders would often opt to depart from nearby stations, like Elizabethtown or Mt. Joy, where they could park free of charge. “People make decisions not to come to Harrisburg to take the train because of the cost and other challenges associated with parking,” Toby Fauver, PennDOT’s deputy secretary for multimodal transportation, told me. The agency considered developing the post office lot as a transit center, but when they contacted the postal service, they learned it was already under contract with Meinstein.
In early 2013, Meinstein and PennDOT struck a deal. The agency would sign a five-year lease of the property, and Meinstein in turn would develop and market the lot, under the name Transitpark, as a parking option for Amtrak riders. It wasn’t a typical lease, however. PennDOT would pay Meinstein $285,000 per year, but it wasn’t reserving any spaces. Instead, the lot would be available for public use, and some portion of the proceeds, after paying the lot’s operating costs, would flow back to the agency to “offset” its payments. The state would also pay an initial $300,000 for ticket machines and other upgrades to get the lot up and running. Meinstein, meanwhile, would offer parking at a discount to Amtrak riders, who could park all day for $5 with a validation from machines inside the station. (Without the validation, Transitpark’s rates are slightly more expensive than the city’s, at $7 per day and $40 per month, compared with $6 and $35, respectively, in the neighboring 10th Street lot.)
Around the time the lease was being negotiated, another arm of state government was working out a different sort of parking deal. As part of a complicated bailout of the city’s debt crisis, the state sought to borrow heavily against Harrisburg’s parking system to generate upfront cash. To cover the new debt, prices would be raised, the system would be outsourced to a private operator and the state would enter into a long-term contract to rent spaces. The result was the much-publicized new parking regime, currently halfway through its second year. Standard Parking, a corporation headquartered in Chicago, runs the day-to-day operations in the city’s stead, aggressively enforcing higher meter rates ($3 per hour downtown) with increased fines ($30, up from $14). Money from the system goes to pay bondholders—in 2014, Harrisburg parkers indirectly paid debts totaling nearly $10 million. A portion of it, critically, also goes to the city, which is counting on parking proceeds this year to fund fully 10 percent of its budget.
As part of the agreement, the city had to make a promise. In essence, it pledged to stifle competition from other lots in the downtown zone. Existing private lots could continue to operate, but the city was forbidden from permitting new ones to open—a simple-sounding rule that has led to some tricky deliberations. Take Executive House, an apartment tower at the corner of 2nd and Chestnut. The building has always rented out spaces in its private lot, but lawyers for the city are now researching exactly how many. If they find the landlord has added new rental spaces that aren’t “grandfathered,” it may order them to cut back again. Or consider the small, private lot across the street from McGrath’s on Locust. The lot was “existing” at the time of the city’s agreement—it has offered parking since 1999—but in 2007 it lost a zoning petition to stay open. The owner sued, and the case lingered in the courts unresolved. The city is now ordering it to close.
Recently, the state has seemed particularly keen to see the city make good on its promise by shutting these private lots down. One advisor described them as “rogue operations” that the city must “nip in the bud.” Yet the Transitpark lot, though across the street from a lot in the city system, seems not to concern them. As a matter of scale, this is surprising: the Meinstein lot contains some 750 spaces, while these “rogue operations” total only a few dozen.
In June, at a regional transportation meeting, a PennDOT employee brought up Transitpark, describing it as a way to avoid Harrisburg parking prices and save some money. Wayne Martin, the city engineer, was perplexed. Every dollar spent on that lot was one that could have gone towards the city. “The Commonwealth is competing against itself,” he thought. He went back to city hall and told the mayor.
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On the matter of parking, the administration of Mayor Eric Papenfuse has found itself between a rock and a hard place. The city’s agreement was negotiated and signed under his predecessor, Linda Thompson, under terms dictated by the state’s bailout plan. Nonetheless, as the new face of city government, Papenfuse has had to take responsibility for its terms—both by fighting for its benefits and by mitigating its consequences. In December, he announced a partnership with a mobile app that would allow motorists to earn coupons and parking validations by saying it could “change the narrative” on parking. In March, he bargained for four free hours of parking on Saturdays and reduced happy hour rates by pledging a quarter-million dollars in tourism money to cover any lost revenue.
At the same time, he is loath to see the parking system lose a dime, for a simple reason: the city needs the revenue. On July 1, the state coordinator of Harrisburg’s recovery, Fred Reddig, filed a status report with the court overseeing the bailout plan. Among other updates, the report noted that the city was getting far less money from the parking system than expected. By the end of May, the payments to the city were around $650,000 short of what had been budgeted. Revenues were “way, way, way off,” as Papenfuse put it. Yet Reddig’s report seemed mostly to blame the city, noting that City Council had delayed passing an ordinance required to enforce tickets. The city “has a lot to say about how well the parking operations perform, and thus how much of the cash flow it realizes,” the report said. It went on to address “some land owners” who “will attempt to offer parking to the public” in the downtown zone. “It is incumbent that the City act to shut these operations down as soon as practicable in order to maximize revenue.”
How does PennDOT’s lease with Transitpark square with this objective? “One of the long-term threats is the growth of the parking enterprise there,” Papenfuse told me recently. Directly across the street from Transitpark is the 10th Street lot, a part of the city-owned system. “I think they’ve talked about how, if I recall Fred’s words, the city has a role in ensuring compliance with the system and the long-term viability of the system,” he said. “And one has to ask whether or not that PennDOT lease is really in the long-term best interest of the parking system.” The state, he said, “could be working proactively with PennDOT to integrate into the existing system. I don’t know why that’s not happening.”
“Our intent was not to be in competition,” PennDOT’s Fauver told me. He described the investment in Transitpark in terms of a long-term commitment to increase train ridership and tourist travel to the area. The agency is currently completing a $40 million project to upgrade the tracks leading into Harrisburg. The project, along with another recent investment to remove track-level crossings on the rail line, is expected to shave 10 to 12 minutes off the journey between Harrisburg and Philadelphia. “There’s a lot of opportunity to market south central Pennsylvania to the outside, to New York City,” he said. “But we’ve got to be able to provide parking.” He also spoke of long-term plans to improve the station itself, including new elevators from the concourse to the platforms. “We want the city of Harrisburg to have a good station,” he said.
The city is aware of these efforts and, perhaps because of this, has not courted controversy over the lease. Fauver “runs a thousand miles an hour,” Martin, the city engineer, told me. “I don’t think PennDOT intended to hurt the city. In the absence of a plan, they made decisions.” Meinstein, for his part, told me his business had a “fantastic relationship” with Amtrak and PennDOT, and described the development of his property as a form of much-needed help for the station. “We don’t think it’s controversial,” he said. “There were some needs. We didn’t seek this contract—it came to us.” He pointed to the benefit the city already receives from his operation, in the form of a 20-percent tax on his parking revenues.
Yet Transitpark also has real potential to undercut the city’s parking system. Reddig, in an email to city officials, said the Transitpark lease was “entered into primarily to provide parking for those using the train,” but the lot’s own marketing tells a broader story. Last summer, the company promised “Harrisburg’s Best Parking Rates” in advertisements in this magazine. The website currently advertises spaces for “businesses, busy travelers and city visitors.” At the top of the page, in capital letters, is an announcement: “We’re growing!”
Papenfuse has said he would favor “redevelopment of the post office site into something else entirely that would benefit Mr. Meinstein, but wouldn’t be parking.” Meinstein, at least for now, doesn’t seem so inclined. He told me he felt Transitpark helped solve a shortage of parking in the city, and that people were “coming into the city who wouldn’t otherwise come because of the cost.” He also emailed me an excerpt from the city’s parking lease, outlining the “non-compete” area that encompassed the entire downtown. “Very few people are aware of this,” he wrote. In a subsequent phone interview, he clarified. “There shouldn’t be any such thing as a parking monopoly in any city,” he said. “It’s not right.”
This story has been updated with additional information about rates at Transitpark and a neighboring city lot.
