Dear City Council,
This letter is being written to formally oppose the council’s vote
on increasing the Transient Parking Tax (TPT) from 10% to 12%.
I represent VSP Parking near the Burbank-Glendale- Pasadena
Airport. As all of you are aware, “airport- related” parking revenues
generated by VSP, the Burbank Airport Hilton, Star Park, and the
airport’s own services contribute over 92% of the TPT collected
(based on fiscal year 2002-03). Of course, increasing the tax rate
from 10% to 12% would increase some of the collections by the city
(office buildings, etc.), yet until the issues surrounding the
airport are resolved or settled, and the travel industry rebounds
from a nearly two-year slump, 92% of your TPT tax revenues are sure
to continue to decline. Over the past two years, several different
effects and unforeseen incidents have taken place to dramatically
impact the parking revenues collected:
* September 2001 -- The 9-11 tragedy. An obvious impact to the
travel industry, and most parts of the industry have yet to fully
recover from that incident.
* June 2002 -- The airport imposes its own access fees on all
private parking operators.
* December 2002 -- Despite Measure A, which supposedly forbids
airport growth, the city allows and approves Star Park, a 2,200-space
parking lot to open. In doing so, it created a price war between all
airport parking lots to retain their declining customer base within a
declining travel market.
* December 2002 -- The airport reduces rates to compete, and in
doing so, reduces the Transient Parking Tax collected to levels
unanticipated by the city.
* January through March 2003 -- Operation Iraqi Freedom. Never a
positive sign for a struggling economy, but even tougher on a
sensitive travel industry.
* March through May 2003 -- All airport parking lots lower rates
substantially and/or run specials. All of this is happening during a
period in which the economy is wavering on a recession, travel
industry giants (AMR, United) enter or approach bankruptcy, and
travel fears (terrorism, SARS) are on the rise and on everyone’s
To myself, and even the uninitiated, it does not seem like a
“booming” industry, one that could absorb higher taxes.
Most realize that increased costs to the city over the past few
years have strapped the budget. It is now clearly evident that
similar inflationary pressures have not materialized in the form of
higher travel costs, and have been unable to translate into higher
parking charges, from which the city would tremendously benefit. The
only price pressures VSP Parking has been seeing are in the form of
higher fees imposed by governmental agencies (city of Burbank, the
airport), incredibly higher insurance costs (terrorism, worker’s
compensation), coupled with substantially lower parking rates.
Please reconsider your position on increasing the Transient
Parking Tax. Burbank has long prided itself on being business
friendly, and any type of tax increase can never be considered
If city efforts were redirected to eliminating the ever continuing
fight between the airport and the city, or even helping resolve the
Zelman issue, maybe business at the airport could increase slightly.
Then, prices can return to equilibrium and let “friendly” competition
set the market rates, and the TPT can realize some substantial
increases from increased (reasonable) parking rates. Unlike the
excessively low parking rates we are seeing currently at the airport,
which are forcing competitors to match prices just to survive.
DEREK R. SWEET