PHOTO | COSTAR
Alan Lazowski and Shelbourne Global Solutions bought the Gold Building in 2019 for $70.5 million.
March 22, 2021
LAZ Parking CEO Alan Lazowski eyes digital transformation of his parking empire
HBJ Photo | Steve Laschever
Alan Lazowski in LAZ Parking's downtown Hartford headquarters in the Gold Building.
By Sean Teehan
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Prior to 2020, parking magnate Alan Lazowski had been through a number of economic downturns, but never had to furlough an employee.
Then COVID-19 hit, upending a business he grew for four decades into a nearly $2 billion, 15,000 employee operation.
As offices, stadiums and entertainment venues emptied this past year, demand for nearby parking spaces plummeted across LAZ Parking’s 35-state footprint. At one point its daily parking business dropped by 95%. That cut in half the company’s 2020 revenues.
Lazowski had to furlough nearly half of his employees, a gutting decision for an executive who describes his business as a "people-first" operation that values its workers.
But as temperatures rise with the spring, and COVID infection rates fall with increased vaccine distribution, Lazowski is only focused on the future. And he's in the middle of what he hopes to be a transformational period for LAZ Parking with intentions to remake the company into America's most innovative digital parking operator.
That pivot includes adopting new technologies that allow for a completely hands-free parking experience to opening entirely new business lines within his parking properties like parcel delivery and ghost kitchens, in addition to deploying thousands of electric vehicle chargers across the country.
"The future of parking is not only going to be around traditional parking," Lazowski said. "We're going to put 50,000 charging stations in all our parking lots and garages … and we'll be taking sections of our garages and creating 5,000- to 10,000-square-foot micro-warehouses, and doing picking and packing for last-mile delivery."
On a recent late winter evening, Lazowski sat down with the Hartford Business Journal at LAZ's new downtown Hartford headquarters in the iconic Gold Building. The hometown parking magnate talked about the pandemic's effect on his business and employees, the new direction LAZ Parking will take over the next few years and how his business fits into the future of an ever-changing digital economy.
Deep impact
During a recent tour of his company’s 34,000-square-foot headquarters in the Gold Building's 13th and 14th floors, Lazowski pointed out conference space and executive offices in the silver-tinged ultra-modern looking space.
He also stopped occasionally to take in the panoramic views of downtown Hartford — from the state Capitol and Bushnell Park to Constitution Plaza and the I-84 Mixmaster bridge. His grin portrays the pride of a man who owns the most recognizable building in the city where he started out parking cars.
"I had a little bit of an attachment to this building because one of my great mentors in Hartford, David Chase, built it back in '74, and he gave us a real help in our business early on," said Lazowski who teamed up with New York realty investor Shelbourne Global Solutions in 2019 to purchase the Gold Building for $70.5 million.
The late Chase gave a 20-something-year-old Lazowski one of his earliest business deals, handling some of his downtown parking facilities.
Over the next several decades, Lazowski would grow LAZ Parking into a behemoth managing 1.3 million parking spaces across 420 cities by March 2020. COVID-19 struck almost immediately after the company moved its headquarters from 15 Lewis St., where HBJ was a former tenant.
Pre-COVID LAZ Parking would have about 220 employees roaming its halls in Hartford; on some days during the pandemic there have been fewer than 10 LAZ employees downtown as many of its corporate office staffers continue to work from home.
It's hard to express the degree to which the pandemic hit not only LAZ's business, but also clients that pay the company to handle parking.
"We either own, lease or manage parking for universities, airports, arenas, stadiums, commercial office buildings," Lazowski said, listing many of the locations that were forced to close or significantly limit their capacities over the last year. "As an example, we ran [parking for] about 250 hotels throughout the country. … If a hotel isn't open the parking lot or garage isn't open."
About 150 LAZ Parking locations, mostly hotels, temporarily closed over the last year. The company expects they'll be back up and running in September.
Lazowski said he, as former chair of the National Parking Association, personally lobbied members of Congress like House Speaker Nancy Pelosi to pass an additional $600 in weekly unemployment payments in last year's CARES Act.
He said that gave him some comfort that his furloughed workers who live paycheck to paycheck would be taken care of.
As the pandemic continues to subside, Lazowski said he believes homebound workers will start to return to downtown Hartford and other cities where his company manages parking operations.
"I firmly believe that people are going to want to come back to work," Lazowski said. "The new work week might be four days a week instead of five days a week, but people will be coming back to work."
Future of parking
While business may have slowed last year, Lazowski’s strategic planning didn’t. In fact, he was plotting out the company's future, which will increasingly be tied to emerging technologies and markets.
It’s as if he’s built a skunk works operation trying to develop new ways to leverage LAZ Parking facilities — financially and otherwise — into new business opportunities. He’s got plenty of ideas.
For example, he wants to roll out electric vehicle chargers at many of his parking lots, to prepare for a future in which more non-gas powered trucks and cars roam U.S. streets and highways. LAZ would either purchase, install and manage the chargers independently, or work with another company, Lazowski said.
The Edison Electric Institute, an association that represents all U.S. investor-owned electric companies, said the country had 1 million electric vehicles on the road by the end of 2018, and projected that number will shoot up to 18.7 million by 2030.
"The gas station of the future is going to be getting [your car] electric charged in parking lots and garages, among other places," Lazowski said.
He is interested in other green technologies, including possibly installing solar panels atop parking garages. The power could cover electricity needed for the facilities and be sold to local and regional electric grids in states that allow it. Additionally, LAZ is in talks with regional and national agricultural groups about possibly using surface and rooftop lots for urban farming.
Lazowski also has a vision for micro-warehousing and last-mile delivery — or LAZ-mile delivery, as he calls it. Last-mile delivery, of course, is the final step in getting an online-purchased product from a warehouse to a customer’s doorstep.
It’s a business model made famous by e-commerce giant Amazon. Lazowski wants to convert portions of his parking garages into warehouses, which would hold anything from computer tablets and groceries to liquor.
LAZ employees would pick and pack items and then potentially deliver them. Or the parking company may partner with Uber, DoorDash or Postmates, which could deliver to customers' doors.
Lazowski said he’s also been in talks with Vermont-based BETA Aviation about installing vertiports — spots for aircraft to land and take off — atop 150 LAZ garages for drones and small electric helicopters, which could be used to deliver goods.
LAZ will likely begin to move into last-mile logistics with pilot programs this year, and officially roll out the new operations — if successful — over next year through 2023, Lazowski said.
Along with these new ventures, Lazowski said he sees promise in so-called "ghost kitchens," which are basically restaurants that operate on a delivery-only model, and don't offer dine-in service. Celebrity chef Guy Fieri has recently opened five delivery-only ghost kitchens of his Flavortown restaurant across Connecticut — to some criticism among Connecticut restaurateurs. Under Lazowski's plan, LAZ would build out kitchen space and rent it out to regional and national brands.
“LAZ is constantly updating its scope of services to find the best use of garages/real estate holdings based on location proximity and demand,” he said. “We're going to be part of one of the most advanced digital parking companies, innovative parking companies in the United States.”
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