Paid Parking Via Cellphone in Coral Gables

Parking_metersThe Miami Herald reports an innovative system that lets people pay for parking using cell phone text messaging.

The automated system allows drivers who subscribe to simply dial in from their cell phone, punch in the number assigned to their parking spot, and the required costs -- plus a 25-cent usage fee -- will be billed to their credit card. When leaving, subscribers call back and end the billing cycle.

It reportedly takes just six-and-a-half minutes to complete the signup process, which involves entering a credit card, e-mail, license plate and telephone number. A competing service is reportedly operating at the University of California Santa Barbara.

Now that Coral Gables has found a way to increase parking revenues via SMS, how long until they start accepting other types of city fees - such as tolls or public transportation fees - using the same method? To see what may lie in the future, one need look no further than London, which has combined real-time monitoring with SMS-based payments so as to be able to tax literally anything that moves.

"The Gap" in Percentage Rent

Gap_logoOnce upon a time, a certain retailer made the argument that if you had a kiosk in a mall, sales made through that kiosk were different than the normal exchange of money for physical goods. That retailer went on to assert that because of that difference, they should not have to pay percentage rent on goods sold via the kiosk.

Other retailers created separate divisions that operated online exclusively, thinking this would enable them to  avoid paying sales taxes to states where they have no physical presence, pursuant to a 1992 U.S. Supreme Court ruling.

A little-known ruling in California may put a dent in that line of thinking. California's 1st District Court of Appeal in San Francisco ruled against Borders, ruling May 31 that the company's website and retail stores have been too intertwined to call themselves separate companies. The three-judge panel cited in-store advertising for the website, receipts that said, "Visit us online at http://www.borders.com " and the ability of customers to return online goods at retail stores. The judges also noted that the companies had board members in common and shared a similar logo.

Shopping centers have long argued for tax fairness, as opposed to new taxes. As municipalities and others reach their breaking point in budgeting for police, fire, schools, and other critical infrastructure, people need to think harder about what it really takes to fund the places they have chosen to live in.

Airports 3.0: How City Governments Fail Their Citizens

A380_2Now that the Airbus A380 has had its first test flight, Americans need to decide what role - if any - they want their airports to play in the global economy. Adding fine dining options will dress up airports in the short term - long term, there are bigger issues that need a steady hand.

Today, there are three times more general aviation flights than commercial flights. In the U.S. there are 400 scheduled air service airports and 5,000 general aviation airports. However, primarily due to a lack of funding, general aviation airports are closing at an alarming rate of one per week, while general aviation is steadily increasing.

This gap is the fault of city officials who cave in to the demands of some 655 rather selfish airport groups. These groups attempt to curtail the use of airports with curfews, weight limitations and so forth. This is coming primarily from a small group of unknowledgeable people who, very candidly, are selfishly concerned about their own interests, and not at all mindful of the enormous impact that airports have on their local communities. As a result of failing to take a principled stand, municipalities are fighting over table scraps while ignoring the big picture.

Most American airport directors, like their counterparts around the world, believe the future is smart growth: larger aircraft, and to primarily longer-haul international markets. Unfortunately, changing direction at airports is painfully slow. The typical change can take 10 years of unglamorous work like getting permission to reinforce taxiways, improve the retail experience and retrofit gates (registration required). Rather than cater to vocal lobbyists, European governments instead provided $15 billion in upfront loans to manufacturer Airbus SAS. Today, the European company has expanded its share of the world passenger aircraft market to over 50 percent, at Boeing's expense.

Airlines like Virgin Air are looking to the A380 to reinvent the air passenger experience. Frequent international flyer Alicia Plumley told me of entire Starbucks kiosks residing within these environmentally-friendly behemoths. To be a part of this noveaux world order that connects Old World economies like Paris and Frankfurt with emerging powerhouses like Dubai and China, American airports need stronger city support to continue to act as a credible gateway.

To the mayors of cities with second- and third-tier connecting hubs - c'est votre tour. Don't let your citizens and local businesses down.

Wal-Mart's Growing Local Influence

Walmarttv_1Wal-Mart rang up $285 billion in sales and $2.3 billion in profits worldwide last year, and its customers and employees didn't do so badly either, said H. Lee Scott Jr., the company's president and CEO, addressing this year's ICSC Retail Real Estate World Summit in Istanbul.

Wal-Mart's economic power with municipalities is on the rise as cities and states continue to struggle with the collection of online sales tax. Some estimates place Wal-Mart's annual sales tax contribution as high as $2.9 billion.  In the meantime, Amazon.com blames its sagging profitability on new requirements to collect sales tax, a complaint echoed by many small businesses. Federated Department Stores estimates that it spends $5 million a year just to remain in compliance with all local sales tax statutes, distinct from sales tax actually paid out.

Wal-Mart Stores Inc. spokeswoman Cynthia Lin said that voluntarily collecting online sales taxes was the right thing to do. "Many states are struggling with tax revenue shortages that affect funding for everything from schools to fire and rescue. This is our effort to help customers and the states they live in," she said.

The Next Great Shopping Meccas

DigitalphillyAs home buyers get priced out of the market, other cities benefit from the spillover effect. WSJ published an interactive feature on six cities:

  • Baltimore - driven by young families willing to commute to DC, and interested in upgrading Baltimore's historic real estate
  • Ft. Myers - a tourism-friendly retirement alternative to West Palm Beach, Boca Raton and Delray Beach
  • Philadelphia - NY and NJ workers are finding affordable living here, with most houses sold in less than 30 days
  • Phoenix - California immigrants can save $100K on a house here
  • Reno - San Francisco Bay home prices is driving younger families to take advantage of low real estate taxes and no state income tax
  • Seattle - Former Californians who have earned some equity seem to flock to Seattle and surrounding cities like Tacoma

Shopping centers near growing residential areas are well-positioned to enjoy decades of solid performance. As REITs perfect their urban infill capabilities, properties like the Galleria at Tyler have matured along with their population.

EU vs USA: How The Marketplaces Rank

Eu_vs_usa_1The NYTimes reports on a new Swedish study that shows if European Union members were states in the USA, they would belong to the poorest group of states, on par with Arkansas, Mississippi and West Virginia. France, Italy, Great Britain and Germany have lower GDP per capita than all but four of the states in the United States.

The report (Adobe Acrobat required), published by Stockholm-based research company Timbro, complains that too many European policymakers and voters seem to be divorced from reality. While they publicly state their desire to enjoy the same luxuries and welfare benefits as Americans, there simply isn't the impetus to pursue stronger economic growth policies.

My view is that mall companies like The Mills Company and Westfield, through their European operations, have a unique inroad into a historically state-controlled political minefield. U.S. retailers like Brookstone are able to use their existing relationships to speed their time to launch. Countries like France, the UK, and the Netherlands have seen how this model spurs consumption in the short term, and helps develop exportable retail concepts like Zara and Hennes & Mauritz (H&M) in the medium term. This "colonization" approach enables success stories to be developed and then replicated.

The study appears to disproportionately favor Scandinavian countries. In late March, another study from KPMG noted that when disposable income was adjusted for cost of living, Scandinavians were actually the poorest people in Western Europe.

Globalization 3.0: The Napsterization of Sales Tax

Theworldisflat_2In our collective rush to find the lowest price for things we purchase, otherwise well-intentioned consumers might find these savings come at a terrible cost. This week Thomas Friedman publishes "The World Is Flat" (also featured in last Sunday's New York Times Magazine) and asks if globalization has made it possible for someone anywhere on earth to do your job, more cheaply, can Americans possibly rise to the challenge?

And after you read what Friedman has to say, what happens when we spend more and more of our increasingly scarce discretionary income on Chinese imports (registration required) we buy over the Internet? Is it our problem when police can no longer afford to provide insurance coverage for officers who are hurt when pursuing felons while they are off duty? Is it our fault when airports cut back operations and restrict the flow of commerce in and out of our cities?

The avoidance of sales tax is a much larger issue than the loss of income to the music, motion picture, and publishing industries combined. Yet without an organization as focused and free of political infighting as the RIAA to provide stewardship, the average citizen is left in the dark. 

The organization that is supposed to be pursuing this is the Streamlined Sales Tax Project. I'm hardly filled with confidence when I see the last news update to their site appears to be November 12, 2002. Maybe they should be posting this week's news that Ohio stands to lose $597 million in sales tax this year because less than 1% of residents are reporting purchases made over the Internet. There's no shortage of bad news that is coming in from all over the country.

Y2K fear-mongers used to scare us with stories of everything coming to a halt at the stroke of midnight. Without the political will to pursue an efficient sales tax policy, our lifestyle will end not with a bang, but with the whimper of our infrastructure gradually, invisibly rotting from the inside.

The Best & Worst Commute Times, And What To Do About It

FastracksThe Census Bureau has just published its ranking of average commute times in major U.S. cities and most extreme commute times (Adobe Acrobat required). The cities with the highest average commute times are:

1. New York, NY (38.3 minutes)
2. Chicago, IL (33.2 minutes)
3. Newark, NJ (31.5 minutes)
4. Riverside, CA (31.2 minutes)
5. Philadelphia, PA (29.4 minutes)

Commute time has become an important battleground in the war of the municipalities, along with how "wired" they are and their ability to attract conventions. By using a sales tax increase to fund a $4.7 billion dollar expansion project, Denver's RTD transportation authority is adding 119 miles of rail, but more importantly, acts as a catalyst for Transit-Oriented Development (TODs): real estate developments that mix residential, office and retail space, thereby spurring further economic investment and community planning. Real estate investors like Shea Properties (68 acres with 300,000 square feet of retail space) and Trammell Crow (438 unit apartment building, already sold) like TODs and are investing in Denver TODs (WSJ subscription required).

As cities like Phoenix, San Diego, Dallas and Houston successfully launch similar projects, TODs will need to market a sense of "place" to their stakeholders, and in the process helping consumers rethink their definition of what a mall is. A study by the University of North Texas found that the new DART system in the Dallas region has already generated over $800 million in development, and that the full system is projected to generate $3.7 billion in economic activity upon build out.

Where there is traffic, there will be commerce.

Vodafone Mulling a Halt to Premium SMS

Vertu_19450_phone_3European mobile giant Vodafone is reportedly on the brink of bringing all premium SMS services to a halt, frustrated by hard-to-use unsubscribe systems and ongoing regulatory logjams.

The potential adoption curves of new services combined with the declining tax bases has led politicians to explore novel interpretations of existing statute and creative approaches like international sales taxes. Emerging payment services like Tom Meredith's P2PCash, delivered on mobile platforms, may well face the same state-by-state regulatory questions brought up by New York AG Eliot Spitzer in his campaign against Simon Property Group. For example, will service charges for stored payment capabilities on mobile phones need to be in compliance with NY state laws which govern stored payment instruments like gift cards?

Overzealous interpretation by local legislators create unusual usability challenges. Just how much should carriers be required to customize their offerings by state, city, or county? A single misstep in localizing a service generally leads to subscriber complaints and subscriber churn. Who takes the blame for these problems? The network operator does. At some point it's just easier to say sayonara to enhanced functionality, along with potential benefits to the public good.

Link: European Commission E-Money Directive

RFID Unbound: The HyperSpace Plan for MPC

HyperspaceThe surprise purchase of MPC Computers by the tiny Denver-based HyperSpace may be explained with a single phrase: secure RFID.

In the past, I've mentioned RFID as the next critical project for companies like Alloy Marketing, simply because it enables supercheap 24/7 tracking of consumers and like the web, provides a platform for building retail applications that favors companies with real estate assets over their web-centric competitors.

RFID has been hurt by overhyped applications like Wal-Mart's supply chain program which probably never had a chance to meet their Jan 2005 deadline. MPC - a longtime leader in RFID - hedged their bets last year by quietly asking government agencies what they needed in their future wireless systems.

HyperSpace will apply its compression technology to solve one of RFID's biggest problems: normalizing data transmission speeds in a variety of environments. This puts them in competition with players like Sentec, Scientific Generics, and San Diego Magnetics. Early stage programs will probably focus on government projects like Homeland Security and automated meter reading for public utilities, and also near-term trials with

  • intelligent packaging (a product on the store shelf calls you up on your mobile phone to give you more information)
  • automated replenishment (your refrigerator is in communication with all of its contents to let you know what is near empty, and what has spoiled)
  • disposable cellphones as labels (peel off a label on the back of your LCD television screen to reach Toshiba customer support)

Look to parent company Gores Technology to direct HyperSpace to build out the platform and ultimately sell to one of the giants like Oracle or IBM, who have the larger architecture vision but cannot execute against this opportunity as quickly.

Link: Denver Business Journal article on the purchase

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