Board Perspective

According to the Council on Foreign Relations on the “State of US Infrastructure,” our country fell behind France, Germany, Japan, Spain, the United Arab Emirates, and the United Kingdom in infrastructure spending. In fact, by 2040, US numbers are expected to fall further to 1.5%.

While the word “infrastructure” typically refers to bridges, roads, water systems, mass transit, and other types of civil projects, it also applies to public buildings such as schools, hospitals, and parking garages, among many others.

The American Society of Civil Engineers points out that the US must spend $1.6 trillion above current levels to get the infrastructure to a state of good repair. The deteriorating infrastructure already costs the economy close to $200 billion a year, and if these investments are not made now, they will cost more later.

While replacing an existing asset is not without challenges, Miami Parking Authority (MPA) has the peremptory responsibility to redevelop its aging infrastructure to protect public safety and avoid operational failures. Furthermore, upgrades to decaying infrastructure spur economic growth, put shovels in the ground, and enhance the community’s quality of life. Aside from the overarching purpose of preventing a threat to human life, infrastructure breaches can negatively stall economic growth and business productivity.

Many funding sources and financing instruments are available to build infrastructure projects; however, one size does not fit all. In the specific case of transportation projects, there are several funding mechanisms, such as gas and sales taxes, tolls, impact fees, and customer facility charges. Transportation capital improvement projects can leverage innovative financing mechanisms such as the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which backs low-interest loans for projects of regional and national significance so long as these initiatives are “federalized.” For instance, the Port of Miami Tunnel was significantly built with TIFIA-backed loans. Some of the tunnel’s benefits include enhancing the safety of the Miami central business district streets by reducing congestion on downtown roads.

In the specific case of parking authorities, by their semi-autonomous structure, they can issue bonds or enter a public-private partnership (P3) agreement to reduce the debt burden and risk. When public entities struggle to find funding to retrofit or redevelop decaying infrastructure, public-private partnerships offer a limited-risk and financially responsible alternative to deliver a safe and appropriate infrastructure that meets the community’s needs.

These original MPA facilities were built in the twentieth century when most major civil projects were developed in the United States. Built about five decades ago, the garages had reached the end of their lifespan. While over time, the Authority has adequately maintained and made safety upgrades, there came a time when these investments fell prey to the law of diminishing returns, and a decision had to be made.

MPA parking garages, built in the 1970s, could not anticipate the seismic population growth, traffic demand, and construction boom that has dramatically reshaped the Miami urban ecosystem. The demographic shift and rapid growth in Miami’s urban core have stressed these facilities and increased the service demand. As a semi-public entity, MPA is responsible for anticipating these trends, keeping pace with, and responding to, the public demand for adequate services.

Against the backdrop of a temperamental global economy, Miami’s financial resilience and outlook are steady, fueled by the relocation to the city of technology and financial giants, significant investment in sports teams, and a burgeoning Miami art ecosystem. This flourishing outlook gave MPA the impetus to redevelop these garages in the heart of the urban core.

These two garages will become premier mixed-use developments that will expand the parking and housing footprint and offer retail and other amenities to meet the demand of the current and projected downtown residents. Since these projects will be built close to various transit modalities, they are expected to enhance these transit-oriented neighborhoods by providing the public with connectivity and mobility options.

As the demographic of urbanized cities changes, parking organizations must recognize the need to identify financing instruments that support micro-mobility initiatives that optimize the customer experience, close the first- and last mile, and increase walkability. While each city has its unique characteristics, this strategy could work well in any major urban area to help reduce traffic congestion, boost sustainability, and respond to the demand and expectations of the public.

To wit, MPA is currently funding in its totality the Freebee, an automated, low-speed public shuttle. To incentivize its customers, the Authority offers a 50 percent discounted rate in its garages to users who park and hop on the Freebee to go to their destinations. In so doing, MPA is helping close the first- and last mile, reduce traffic congestion, and enhance connectivity in the urban core.

The Authority is also funding and deploying a network of electric charging stations to support these modalities. In essence, MPA supports the city of Miami as it transitions to a more electric mobility ecosystem.

While the Authority fully funds these two initiatives, once the new mixed-use projects come to life, it may be necessary to identify alternative funding sources to help expand the mobility footprint near them. In the future, the Authority could explore ways to collaborate with the Miami-Dade County Transportation Planning Organization (TPO) to identify initiatives that could connect bicycles and pedestrians to micro-mobility options. The TPO’s Miami-Dade 2045 Bicycle/Pedestrian Master Plan focuses on projects that can safely connect bikers and pedestrians to their destinations, such as educational institutions, major medical facilities, large employment centers, and outdoor recreational locations.

It is well chronicled that as much as the parking business is experiencing a tectonic change due to technological advances, so are large, urbanized cities across the globe. Cities all over the world are facing exponential population growth. More than half of the world’s population now lives in towns and cities, and by 2030 this number will swell to about 5 billion. (Source: United Nations Population Fund). This demographic shift will require innovative funding sources to underwrite transportation modalities that swiftly move people and goods to and from their destinations safely and reliably.

Anticipating these trend lines, MPA looks forward to working closely with the TPO to seek its advice, support strategic approaches, shape policies, and strengthen mutually beneficial collaborations to fund mobility projects that will enhance the quality of life of the local communities.

The United States’ infrastructure is the cornerstone of the nation’s economic vitality and progress. As new technology continues to emerge and shape the parking and mobility sectors, creative funding sources and financing instruments will be necessary to meet the needs of the public and improve the quality of life in future urban environments. ◆