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Metro loses money when parking meters are removed for hotels

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Posted at 2:06 PM, Dec 09, 2019
and last updated 2019-12-09 20:58:03-05

NASHVILLE, Tenn. (WTVF) — One downtown parking meter can bring in more than $6,000 dollars a year for the city of Nashville.

But a NewsChannel 5 investigation discovered the city is removing parking meters so hotels can operate for-profit valet stands.

So what are taxpayers getting out of it?

It turns out, very little.

Now, Metro Public Works is asking for a legal opinion about whether it has been undercharging valet parking operators for years.

Public works tells us they never considered an "interpretation" of the law that could have generated hundreds of thousands of dollars a year for Metro taxpayers.

As the city's tourist economy has grown, so has the number of valet parking zones, which are now a fixture in front of many of Nashville's new hotels.

Hotels have asked Public Works and the Traffic and Parking Commission to remove parking meters and authorize valet zones where they often charge tourists up to $40 per night to park a car.

Councilman Freddie O'Connell represents much of downtown and says he's seen the traffic problems and loss of public parking valet stands have caused.

But he's most concerned by our investigation which found Metro is basically giving away something that should be making money for our cash-strapped city.

"That curb space has value. That's effectively public property that we are converting to private use," O'Connell said.

Metro currently collects $50 dollars annually for each valet zone.

But a city ordinance passed years ago also requires the city to collect "revenue lost annually for each required metered space."

In other words, when a meter is removed to put in a valet zone, the valet company must also pay the city for the money that meter would have generated.

The law states that the revenue should be calculated using current hourly rates, which would mean most downtown meters could bring in as much as $6,160 per year after Sundays and legal holidays are deducted.

But our investigation discovered the city has never collected lost revenue when parking meters were removed to accommodate valet stands.

For example, in 2015 the 21C Museum Hotel on 2nd Avenue asked the Traffic and Parking Commission to remove 3 parking meters so the hotel could offer a valet service to it's guests.

Those 3 meters could have generated $18,480- a year for the city, but now that the meters have been removed, the city only collects a $50 fee from the hotel's valet company. In turn, the company charges $40 a night for guests to valet their cars.

And a photo from 2016, shows metered parking was available on 4th avenue, but at least 5 of the meters in the picture have now been replaced with valet zones for 3 new boutique hotels, The Bobby, The Dream and the Noelle hotels.

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Those 5 meters could have brought as much as $30,800 a year, but with those meters removed for the valet stands, Metro only gets $150.

Diane Marshall, who oversees valet parking permits for Public Works, admits her department has never asked valet operators to reimburse the city for lost meter revenue.

NewsChannel 5 Investigates asked, "Are you collecting lost revenue from any of the parking meters in valet zones?"

"No," Marshall responded.

NewsChannel 5 Investigates asked, "Why are those meters gone?"

Marshall said, "The meters were removed to accommodate the valet parking operations."

NewsChannel 5 Investigates followed, "So why wouldn't they pay for the lost revenue?"

Marshall responded, "We'll have to get a legal opinion on that to determine an answer."

Marshall says Public Works is now asking Metro legal whether Public Works has been misinterpreting the law for years.

NewsChannel 5 Investigates asked, "Because we raised the question, you are now getting a legal opinion?"

"Well because of the fact we have never considered your interpretation of the this code," Marshall said.NewsChannel 5 Investigates followed, "Our interpretation would lead to a lot more money for the city."

"That's correct," Marshall said.

Metro Councilman at Large Bob Mendes, who chairs the Finance Committee, told us he reviewed the law and said it shouldn't take a legal opinion to understand.

"It's clear on its face that if you have to remove parking meters for a valet stand the city needs to make up the money," Mendes said.

"We're not idiots, if there used to be meters and now there's a valet stand and not a lot of time has passed, well then under the law the city should get the revenue," Mendes said.

In all, NewsChannel 5 Investigates identified at least 19 parking meters that were removed near 8 downtown hotels specifically for valet zones.

Those 19 meters could have brought in a total amount in excess of $117,000 a year for the city, but now the city only receives a total of $400 a year in fees from the valet operators.

NewsChannel 5 Investigates asked, "Have you been pressured by hotels not to follow this ordinance?"

"No," Marshall responded.

It's just the way you've interpreted it?" NewsChannel 5 Investigates asked.

"Yes," replied Marshall.

And while a review of past Traffic and Parking Commission meetings shows the city approved the Hermitage Hotel to operate a valet stand in 8 parking spaces, and the Thompson Hotel in the Gulch was able to get 5 meters to be removed, the city admits they do not keep records of how many spaces are approved at each location.

Video of the meetings reveals that valet stands were often approved with little or no discussion because they were approved on consent agendas.

Mendes said every penny counts in a difficult budget season.

"This is the sort of thing that causes people to have questions about Metro and how it runs the city," Mendes said.

NewsChannel 5 Investigates asked Diane Marshall with Public Works, "Are you worried the city is leaving a lot of money on the table?"

"Based on the interpretation it would seem that we are leaving money on the table," Marshall said.

But Marshall has interpreted the law to mean that the city should only collect lost revenue when a valet stand operates part-time, using a space where there is an existing meter - not when they actually remove the meter.

But she admits there has never been a case in which the city has asked a valet operator to reimburse the city for lost revenue.