# Case 06: Citywide Smart Parking Transformation

## Case Overview

| Dimension | Detail |
|-----------|--------|
| City type | Mid-sized coastal US city |
| Urban population | ~2.0 million metro |
| Registered vehicles | 520,000 |
| Parking spaces | Pre-project census: 152,000 (gap ~370,000) |
| Total investment | $175 million (PPP, private-capital funded) |
| Concession term | 15 years |
| Delivery period | 2020–2023 (three years, four phases) |
| Operator | Private smart-parking concessionaire |

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## 1. "Parking Hell": A City's Collective Anxiety

### 1.1 The Parking Pain

In the words of locals: "20 minutes to drive, 40 minutes to find a space."

A 2019 survey revealed striking data:
- Only 152,000 spaces for 520,000 vehicles — ~65% shortfall
- At CBD peaks, vehicles searching for parking were 28% of roadway traffic — nearly a third "circling"
- ~20,000 on-street spaces, but manual collection covered <30%; annual leakage (evasion + collector skimming) exceeded $42M
- 800+ off-street lots (residential, retail, office), but 95% ran independently, no data sharing
- ~30% of congestion directly attributable to parking search — the most "wasteful" congestion

### 1.2 The Mayor's Resolve

In 2020, after a "citizen service day" (52 calls, 17 about parking), leadership declared: "Parking has become the top mobility issue affecting quality of life — it demands systemic, digital solutions."

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## 2. Technical Solution: One Network + Four Applications

### 2.1 Overall Approach: "Policy + Technology" Dual Drive

- **Policy:** a city *Parking Management Ordinance* — unified data standards, new-build parking ratios, pricing framework
- **Technology:** a unified citywide smart-parking cloud enabling "on-street + off-street one network, one app citywide"

### 2.2 Four-Phase Plan

**Phase 1 (2020): On-street digitalization — $50M**

| Item | Content | Data |
|------|---------|------|
| Overhead AI camera | 20,000 on-street spaces with overhead (gun-ball) cameras; AI plate ID, behavior, billing | 1 camera per 15 spaces → 1,350 cameras |
| Magnetometer + PDA | For tree-shaded / unserved segments: magnetometer + handheld | ~3,000 spaces |
| Payment system | Auto timing/billing, online pay (card / mobile wallet / toll-tag), debt collection | Replaced all manual collection |

**Phase 2 (2021): Off-street network integration — $40M**
- 800+ lots connected to the city platform
- Integration: standard API (large commercial) + lightweight DTU box (small/medium)
- Real-time upload of available spaces, price, in/out data
- Result: connection rate 5% → 78% (624 lots)

**Phase 3 (2021–2022): Guidance + shared parking — $46M**

| Function | Content |
|----------|---------|
| Three-tier guidance | Tier-1 signs (15, arterials): zone saturation; Tier-2 (58, district entries): street-level spaces; Tier-3 (280, lot entries): lot-level spaces |
| Mobile-app guidance | "CityPark" app: nearby lots, live spaces, price, navigation |
| Shared parking | 200 residential communities share daytime idle spaces with commuters; app-based publish/book/pay/rate; owner avg +$38/month |

**Phase 4 (2022–2023): Toll-tag parking + EV linkage — $39M**
- 80 key lots (hospitals, airport, rail, malls) support seamless toll-tag payment
- EV charging availability queryable/bookable in app
- Combined charge+park package (charge 30 kWh → 2 h free parking), lifting charger utilization

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## 3. PPP Model in Detail

### 3.1 Why PPP

The city faced "want to act, lack capital" — $175M was a heavy burden. A PPP (public-private partnership / long-term concession) was adopted.

### 3.2 Structure

| Element | Content |
|---------|---------|
| Contracting authority | City Department of Transportation (public side) |
| Private partner | A leading smart-parking operator |
| Special-purpose vehicle | CityPark Co. (SPV; $56M registered capital; city 30%, private 70%) |
| Term | 15 years (3 build + 12 operate) |
| Return model | User-pays (parking fees) + viability-gap funding (first 3 yrs) |
| Risk allocation | Build/operate risk → private; policy/ demand-below-80%-of-forecast → public backstop |
| Exit | Assets transferred to city at concession end at no cost |

### 3.3 Financial Model

| Year | On-street rev | Off-street fee | Shared-park comm | Other | Total rev | Opex | Net |
|------|--------------|---------------|-----------------|-------|-----------|------|-----|
| 1 | $25M | $1.7M | $0.4M | — | $27.1M | $17M | $10.1M |
| 3 | $44M | $5.3M | $2.5M | $2.8M | $54.6M | $25M | $29.6M |
| 5 | $58M | $7M | $4.1M | $4.9M | $74M | $28M | $46M |
| 8 | $66M | $8.3M | $5.5M | $7M | $86.8M | $30M | $56.8M |

**Payback: ~5.5 years (incl. build).**

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## 4. Deep Integration with Enforcement

### 4.1 From "Manual Ticketing" to "AI Auto-Capture"

The smart-parking system linked with the police parking-enforcement system:
- Overhead cameras also detect illegal parking — over 3 min in no-stop zones → auto-capture to citation platform
- After 6 months: major-arterial illegal parking −65%, collectors −40%
- Dispute handling: "citizen appeal + AI review + human arbitration" — error rate <2%

### 4.2 Debt Collection

Linked with the DMV: unpaid parking tied to vehicle registration renewal:
- Balances >$70 or >6 months flagged at renewal (reminder, not hard block)
- Credit-system linkage for chronic evaders
- *Effect:* on-street payment rate 28% → 91%

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## 5. Citizen Acceptance

### 5.1 The Biggest Controversy: Paid On-Street Parking

At launch, residents strongly resisted "strict on-street charging":
- 311 complaints 800+/month
- Op-eds accused the city of "profiteering"
- Some parked on sidewalks / greens to evade

### 5.2 Response Strategy

| Strategy | Measure | Effect |
|----------|---------|--------|
| Transparent pricing | Publish cost, basis, and use of revenue (reinvested in facilities) | Improved "arbitrary fee" perception |
| Grace transition | First 3 months at 50% off, then phased to full | Reduced economic shock |
| Free windows | Nights 20:00–08:00 free (residents' overnight) | Won residential support |
| Monthly/annual passes | Residents' discount pass ($28/mo, 50% below market) | Cut complaints |
| Merchant offset | Spend at local businesses → 1–2 h parking credit | Merchants turned supportive |
| Public campaign | "Charging is to raise turnover, not revenue" — visualizing turnover | Reframed understanding |

### 5.3 One Year Later

Survey (end-2021 vs end-2020):
- "On-street parking convenience" satisfaction: 28% → 72%
- "Parking-fee fairness" recognition: 15% → 58%
- Logic shift: residents found that while they now pay, they reliably find a space — before it was "free but never a space"; now $1.20/hr but always a space.

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## 6. Outcomes

| Metric | Before | After | Change |
|--------|--------|-------|--------|
| CBD average search time | 18 min | 7 min | −61.1% |
| City average search time | 12 min | 5 min | −58.3% |
| On-street space turnover | 1.8/day | 5.5/day | +205.6% |
| On-street payment rate | 28% | 91% | +63pp |
| Off-street connection rate | 5% | 78% | +73pp |
| Shared-parking active spaces | 0 | 12,000+/day | — |
| CBD congestion from search | 30% | 12% | −18pp |
| Annual public parking revenue | ~$11M (heavy leakage) | $66M | +500% |
| Citizen parking satisfaction | 2.1/5 | 3.9/5 | +1.8 pts |

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## 7. Lessons

1. **On-street digitalization is the "bull's nose":** though only 13% of spaces, it is public and highest-impact. Anchor on it; off-street integration and policy follow.
2. **Overhead camera TCO beats magnetometer:** higher upfront ($110/space vs $28) but multi-use (plate + enforcement + detection); lifecycle cost lower, no road excavation for maintenance.
3. **Shared parking needs "community ops," not just a platform:** the hard part is property-management cooperation. 200 communities took 14 months (10 on property negotiation). Assign community-ops staff per neighborhood.
4. **Enforcement linkage guarantees compliance:** without citation + debt collection, payment stays below 50%.
5. **Public communication is half the success:** ~3% of investment ($2.5M) in communication bought acceptance — irreplaceable.
6. **PPP needs precise contract design:** the viability-gap-funding mechanism was a highlight — gave the private side early confidence while a declining schedule (year-1 $11M → year-5 zero) forced commercial self-sufficiency.

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*Case authored: March 2024 | Sources: operations annual report, traffic-monitoring report, citizen-satisfaction survey*
