A Newcastle businessman says he has shelved plans to expand his inner-city car park due to the city’s new subsidised park-and-ride service.
Darren Nicholson won council approval in May to double the height of his five-level Gibson Street car park.
But he said on Wednesday that he would instead aim to build five levels of serviced apartments on top of the existing car park after sending the council a letter pointing out its park-and-ride service had “undermined” his business.
“When you do park-and-ride for nothing and subsidise it, people like us who had approval to do another 400 [spaces] say, ‘We’re not doing it now,’” Mr Nicholson told the Newcastle Herald.
“If you had a coffee shop in town, the council can’t come alongside you there and just offer free coffee.
“It bastardises the commercial market. They don’t do it commercially at the market value. It’s not long-term. It’s a political gain.”
Mr Nicholson said his car park used to be full but now had 80 vacancies a day, some of which he attributed to the park-and-ride service the council and state government launched in early November from Hunter Stadium to Newcastle East.
The council’s chief executive officer, Jeremy Bath, said in October that the park-and-ride service would offer an alternative for commuters paying “top dollar” to park close to work.
More than 1000 people have registered to use the service, which will start charging $2 from January 29.
Mr Nicholson said that at that price it would still be heavily subsidised. A bus from Broadmeadow to Civic and back costs more than $7.
“I don’t have a problem with park-and-rides,” Mr Nicholson said.
“I think they’re good and I think we need them, but it needs to be at the correct price that is sustainable, otherwise it undermines everything else.
“What does it cost to break even? It should be a realistic price. It’s not $2.”
Mr Nicholson bought the Gibson Street and Bolton Street car parks off the council in 2012.
He said he was also planning to add four storeys of serviced apartments on top of the Bolton Street property.
“If the council wants to subsidise parking all over the place, that’s OK, as long as I know their plan. I’ll just demolish those car parks and build units there.
“I’d get a better return on units now if I knocked them all down and just built units. I could make heaps more doing that.”
Mr Bath said on Wednesday that he could not disclose the council’s contribution to the park-and-ride service due to commercial-in-confidence agreements.
“When Darren Nicholson first purchased the Gibson Street car park in 2012, his plan was to add four storeys of office accommodation,” he said.
“Then 18 months ago he decided to instead build additional car parking.
“Now he is back to where he started in wanting to put accommodation on top of the car park.
“Clearly Darren has come to the conclusion that he can make more money from developing apartments than he can from car parking.
“That should come as no surprise given every new apartment in the CBD and Honeysuckle is being snapped up off the plan within days of release and for record prices.
“Council looks forward to working with Darren on a resubmitted development application to build residential apartments on top of the Gibson St car park.”