Appendix B - Working Smarter - Perth City Centre Car Parking Options and Kinnoull Street Multi-Storey
Perth and Kinross Council · 4 September 2024
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1 | P a g e Appendix B Working Smarter - Perth City Centre Car Parking Options and Kinnoull Street Multi-Storey Car Park 1. EXECUTIVE SUMMARY 1.1 The opportunity for Perth and Kinross Council to acquire Kinnoull Street Multi- Storey Car Park (MSCP) contributes to the overall successful delivery of the Perth City Integrated Investment Proposal as outlined in the covering report. 1.2 The Pullar House Public Finance Initiative (PFI) Project Agreement referred to in Appendix A also creates an opportunity for the Council to purchase Kinnoull Street MSCP at the same time as Pullar House. Pullar House can also be purchased without the car park. 1.3 If the Council wishes to exercise its right to purchase the car park at market value, this needs to be intimated to the owners by 10 September 2024. 1.4 This appendix provides detailed information to support recommendations 2a and 2b in the covering report. 2. KEY INTERDEPENDENCIES 2.1 Key dependencies and future opportunities have been identified whilst undertaking the required work to implement Council’s decisions around Pullar House and PH2O. On the basis there is a strong business case for the purchase of Pullar House and construction of PH2O on the Thimblerow Car Park site there is a robust case to purchase Kinnoull Street MSCP to release social, economic and environmental benefits by: Facilitating ongoing service delivery: the acquisition of Kinnoull Street MSCP secures parking infrastructure enhancing accessibility for essential services, ensuring seamless delivery to the community. Supporting the proposed public service hub: the car park will serve as vital infrastructure for the proposed Public Service Hub within Pullar House, streamlining operations and improving efficiency. Addressing parking needs for PH2O: where PH2O, or another future development, replaces Thimblerow Car Park, Kinnoull Street MSCP will offset the loss of related parking facilities, supporting the new development. Rationalising underutilised car parks: MSCPs offer efficient use of land by offering more spaces on a smaller footprint. The Council taking control of Kinnoull Street MSCP would present an opportunity to strategically review existing surface/ street car parks and potentially free up space for alternative service provision.
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Opportunity for asset acquisition: purchasing Kinnoull Street MSCP at market value presents a unique opportunity to secure an important city centre asset, with cost projections indicating potential savings and future profits. Enhanced customer experience: acquiring Kinnoull Street MSCP, would bring parking arrangements there in line with other Council-run sites, providing a more consistent and customer-friendly experience for visitors to Perth city centre. Mobility Strategy and Action Plan 2.2 A Mobility Strategy and Action Plan is currently being developed to enhance the transport network over the next 15 years. The strategy covers all modes of transport in Perth and Kinross, aligning with national targets and local objectives. It also considers car parking and its impact on the city centre. Currently, these documents have been in consultation following Council approval in May 2024 and an update will be reported in due course. 2.3 Within the city centre, two specific actions in the Draft Mobility Strategy highlight future opportunities relating to Kinnoull Street MSCP. City Centre Circulation Plan: This action emphasises re-evaluating parking and road space allocation. Adding another MSCP to the facilities within the control of the Council supports this by providing efficient, high-density parking within a smaller footprint, potentially freeing up surface parking for other uses. City Centre Parking Review: This action involves completing a Strategic policy and related car parking survey to inform future parking requirements in Perth city centre, providing an opportunity to consider disposal of under-utilised assets in favour of alternative service provision. Purchase of Pullar House – Creation of a Public Sector Hub 2.4 The ongoing work to consider the viability of transforming Pullar House into a Public Sector Hub has outlined adjacent parking as an essential operational need for many organisations. However, indications of the number of parking spaces partners would require suggest that sufficient parking will remain for general public use. 2.5 If the Council instructs the purchase of Pullar House without Kinnoull Street MSCP, the Council will lose access to the 85 spaces within the structure that form part of the current PFI agreement. 2.6 To inform investment decision-making and provide context for the city centre estate, Ryden Commercial Property Agents and Chartered Surveyors were instructed to provide a market valuation for Kinnoull Street MSCP. This report highlighted that a significant proportion of the current model for Kinnoull Street
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MSCP relies on the Council’s PFI payments, bringing the future viability of the car park into question without the Council’s contribution and introducing the risk of: a potential derelict building within the Culture Quarter of the city centre impact to the economy via the loss of 555 parking spaces change in business model with unknown impact on customer experience and potentially introducing further discrepancies in the Perth city parking offer. PH2O – Enabling a Leisure Asset Within the City Centre 2.7 As set out in the covering report and Appendix C, the preferred option for PH2O is to build at the current Thimblerow Car Park site, with the existing Perth Leisure Pool (PLP) and Dewars Centre sites being developed for housing once the new facility opens. 2.8 If this option is approved, Dewars, Glover Street and Thimblerow car parks would be redeveloped as part of the PH2O project, creating a potential loss of 579 Council/ Live Active Leisure (LAL) operated parking spaces, whilst bringing an additional annual footfall of 400,000 visitors to the city centre. 2.9 Purchasing and operating Kinnoull Street MSCP would both offset this loss and provide parking options for leisure centre customers within a five minute walk/wheel of the proposed PH2O site. Priority for Blue Badge holder parking on Thimblerow will be incorporated as part of the statutory planning process. Car Parking Site Current Council- Owned Parking Provision Proposed Council-Owned Parking Provision Dewars Centre/ Glover Street 174 200 - Thimblerow 205 70 Kinnoull Street MSCP - 555 Total: 579 625
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2.10 Kinnoull Street MSCP is currently operated by a private company and has complex payment arrangements. As both the largest car park in Perth and the nearest significant parking asset to the proposed new leisure site and Perth Art Gallery, Perth Theatre and Perth Concert Hall, there is significant reliance on this site for customer parking, but with customer experience in the hands of a third party. 3. ASSET INFORMATION Kinnoull Street MSCP Information 3.1 Kinnoull Street MSCP is currently owned by Kinnoull House Limited and leased to the Council, with the parking service delivered via their sub-lease to Smart Parking Ltd, providing 555 off-street car parking spaces at a similar tariff to Council-owned city centre car parking costs. 3.2 Kinnoull Street MSCP was constructed in 1999 and is a modern carpark which is suitable for modern-sized vehicles, with scope for future renovations. 3.3 As part of the PFI Agreement for Pullar House and Kinnoull Street MSCP, the Council pays a guaranteed minimum sum (unitary charge) for 85 spaces within the car park together with an indexation adjustment and receive a share of any profit above a guaranteed minimum sum. This cost is met from the ring -fenced parking budget. 3.4 At the end of the PFI agreement on 10 September 2025 the Council will lose use of these 85 spaces and pay no further unitary charge costs. 3.5 The Council’s expenditure for the last four years relating to Kinnoull Street MSCP is displayed in the table below: 20/21 21/22 22/23 23/24 Unitary Charge -380,851 -382,075 -389,661 -404,864 Rates -91,006 -92,486 -92,486 -91,074 Water -6,275 -6,387 -6,689 -6,960 Profit share 47,533 49,061 64,111 104,458 Total Paid -430,599 -431,887 -424,725 -398,439 4. PREFERRED OPTION 4.1 Having considered the previously described factors and following SWOT (see Appendix B1 and Appendix B2), officers are recommending that the Council purchase Kinnoull Street MSCP. 4.2 Based on the outcome of the future city centre parking review proposed within the Mobility Strategy, and future Council decision(s), the Council would be in the position to either:
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Own and operate Kinnoull Street MSCP alongside existing car parks throughout the city centre, or Own and operate Kinnoull Street MSCP and, subject to a parking review, dispose unrequired parking assets in favour of alternative uses Indicative costs Capital investment required: £2.25million Annual revenue loan charges for capital borrowing £101,250 Total revenue investment required (including annual loan charges): £414,741 4.3 Acquiring Kinnoull Street MSCP eliminates the need to pay the unitary charge, creating a £380,000 budget saving, which could be repurposed and bolstered by income to purchase and run the car park without additional budget requirements: Projected Annual Income/ Expenditure Indicative Costs (£) Revenue investment requirement -414,741 Unitary charge budget saving +380,000 Projected partner parking income (should Council instruct the purchase of Pullar House) +54,600 Projected Kinnoull St MSCP income based on Smart Parking data (low utilisation) +100,311 Total +120,170 4.4 If Council instructs the future closure of Thimblerow Car Park and Dewars Centre/Glover Street Car Parks to facilitate the construction of PH2O and redevelopment of the existing PLP/Dewar’s site into housing, income levels currently attributed to these assets can be redirected to Kinnoull Street MSCP: Potential Future Income Indicative Income (£) Redirection of Thimblerow car park income £237,000 Property cost savings from releasing Thimblerow car park £39,257 Redirection of Dewar’s Centre/ Glover Street car park income - currently paid to LAL £31,000 Property cost savings from releasing Dewar’s Centre/ Glover Street car park N/A costs met by LAL (£12,000) Total +307,257 4.5 In addition to this, following the proposed parking review, where under-utilised assets are identified and declared surplus this may provide further savings and income to Kinnoull Street MSCP.
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6 | P a g e Appendix B1 – SWOT relating to not purchasing Kinnoull Street MSCP Strengths Weaknesses No additional capital or revenue expenditure Saving of current PFI unitary charge, rates and water for asset No additional asset or related risks The Council currently has 85 spaces within Kinnoull Street MSCP, if these are relocated to Canal Street, or local street parking, this will impact the availability and income within affected car parks Loss of opportunity to purchase more modern MSCP within the city centre Loss of opportunity to support Mobility Strategy via reducing street parking/ surface parking in favour of utilising vertical space within MSCP Loss of opportunity to complete Parking Review to ascertain city centre parking needs and explore disposal of other car parks in favour of Housing or alternative options Doesn’t provide infrastructure to facilitate city centre development projects (PH2O, Pullar House Public Sector Hub) or cultural attractions such as Perth Art Gallery, Perth Museum, Perth Concert Hall and Perth Theatre. Opportunities Threats If Kinnoull Street MSCP were to close it would increase utilisation of Council car parks in the area, increasing income Smart Parking’s income level is significantly supported by the Council’s PFI payment, removal of this in September 2025 will significantly impact building income and attractiveness to operators to continue running the building - presenting risk of a vacant site within Perth city’s Culture Quarter - if the car park owner/ operator closes Kinnoull Street MSCP there is a loss of 555 spaces For a hypothetical operator to be attracted to Kinnoull Street, they would need to drive significant operational cost savings and/or to meaningfully increase income either through improving utilisation or raising the parking charges/tariffs: o Increasing the cost of parking would likely drive customers towards alternative solutions at Council
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operated surface parking throughout Perth or grant an advantage to the only direct competition within Perth, namely Canal Street MSCP– ergo potentially unviable for any other operator presenting risk of a vacant site within Perth city’s Cultural Quarter o Reducing the costs of parking to increase utilisation would impact Council-operated car parks as to remain competitive the Council would need to reduce costs, impacting available funding for management, maintenance and investment in parking Loss of adjacent parking provision to Pullar House will impact: o Council service delivery through loss of efficiencies for staff that only visit for short times and delay rapid response o Public Service Hub ambition as several key partners have essential parking needs that would rely on parking and external storage needs being met by the car parking operator, assuming ongoing operation o Ease of access for Council employees or customers with disabilities should the car park not continue to operate
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Appendix B2 – SWOT relating to purchasing Kinnoull Street MSCP Strengths Weaknesses Higher MSCP parking volume – would offer the Council an additional 555 spaces, providing opportunity (post Parking Survey) to consider disposal/ replacement of other car parks for alternate purposes in line with Mobility Strategy and property rationalisation ambitions: o Housing o Greenspaces o Street improvements/ green infrastructure o Connecting services to improve active travel within centre MSCPs offer better utilisation of limited and restricted city centre space via vertical use of space – removing on- street parking through provision of multi- level parking reduces street congestion and reduces car parking ground level m² needs. Higher income potential via provision of additional city centre parking spaces and removal of competitor Existing Kinnoull Street MSCP operating arrangements have a poor reputation, impacting public opinion - Council operation of this site would offer more consistent customer parking experience in Perth city centre Control of a key site in a strategic location within Perth city centre’s Cultural Quarter, serving commuters, shoppers and residents Mitigate risk of vacant car park post-PFI agreement Provides adjacent parking for Council vehicles and proposed partners (essential requirement for some) Purchase costs and costs of change - additional capital and revenue expenditure Additional asset and related risks
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Opportunities Threats Opportunity to implement modern parking system to improve customer experience and minimise future staffing requirements Future opportunity to add green infrastructure such as solar panels, EV charging stations and energy efficient lighting to support Net Zero ambitions Growing urban populations lead to higher demand for parking –this site offers suitable central parking for any future developments within the city centre Removing on-street parking provides opportunities for street improvements to provide safer and more attractive active travel options, reducing the number of cars in the city centre in line with the draft Mobility Strategy Action Plan Ongoing downturn in city centre footfall – impacts number of people using car park and therefore profit/ loss margins Expansion and improvement of public transportation infrastructure may reduce reliance on personal vehicles, decreasing the need for parking o However, excess parking spaces could be removed from on-street car parking, providing space for future alternate use or improved transport planning options