A JOURNEY THROUGH THE ARCHIVES Allright Takes Aim On East, Midwest For Acquisitions
This story was published Dec. 12, 1965, in the Chronicle. The text and headlines are reprinted.
Just two weeks after Allright Auto Parks, Inc. shares were listed on the American Stock Exchange, its president, Durell M. Carothers, is saying, “We’re going on the Big Board someday.”
This attitude of constant growth is typical of Carothers and the unique organization he heads. Allright, founded and headquartered here and operating nationwide, is:
• The largest car parking operation in the country with 800 locations in 49 cities. They park 43,000,000 cars a year.
• A company which in effect has no real competitor. In the $600 million a year car parking industry there is no other firm doing what Allright is doing — forging a national organization devoted solely to parking cars.
Carothers, a big man physically, has a seemingly boundless enthusiasm for parking. He gives a visitor the impression parking automobiles is the most exciting thing in the world.
In cold business statistics the Allright story is exciting. For the last 5 years, Allright’s profits have grown at the average rate of 22.5 percent annually. In 1961 profits were $411,030. In 1965 they were $932,357.
Acquire 7 Firms
Aggressive acquisition of other parking operators is the Allright growth route. In those 5 years they have acquired 7 companies in 5 different cities and gained 231 parking lot locations.
The map showing Allright´s operations is full of dots across the entire southern half of the United States. The northern half of the country shows the blank spaces and it is on these areas Carothers is now concentrating.
“The big cities and the heavily populated areas of the East and the northern Midwest are our area of commanding interest now,” Carothers said.
Within the last two weeks, Allright has had conversations with six firms in the East, he said and “something may come of these.”
Having its stock listed on a major exchange has helped, Carothers said. He said they had been courting one parking operator in a big Eastern city for two years, but the man had remained cold to all of Allright’s wooing.
“When he read about our listing on the American Exchange he called and wanted us to come up and talk to him,” Carothers said.
Sees No Limit
And he sees no limit to Allright’s growth “I can’t see how we can reach the saturation point,” he says, pointing out that Allright’s projected revenues of $25 million next year represent only 5 percent of the industry’s $600 million revenues.
Carothers said 70 percent of the parking industry is composed of small individual operators and this is Allright’s big market for expansion.
“Many of them started at the same time Allright did in 1926 and now they’re looking for the protection of a big parent company for personal estate purposes,” he said.
Carothers apparently intends that Allright will remain just what it is, a car parking operation, without diversification into any offshoot of the business.
“Why diversify when there is so much opportunity in the things we’ve done successfully and can do again?” he asks.
With all the potential of at least 43 million people a year going through his locations, however, he does say they have looked at but turned down possibilities such as the rent-a-car, small luncheonettes and the auto accessory business.
And Carothers is equally cold to merger proposals which he say he gets all the time from companies wanting to diversify their operations. “They always want to take us over, but we’re going to be the dominant part of any merger. I can’t see us as part of some company with other interests,” he says.
There has been one recent departure from the policy of only operating parking facilities but it was into a field so natural as to be almost inevitable.
Within their 40-man headquarters organizations, Allright has developed what is one of its most valuable assets, experts who bring modern management efficiency to the seemingly casual business of parking your car.
They know which piece of property will make a profitable parking lot and which won’t; when it would be better to tear down a building and make more money on parking than the building will yield; whether it’s better to have a park-andlock operation or attendants on duty.
From there the Allright engineers take over. Park the cars at an angle or straight in? Customers parking their own cars find the angle parking easier but it takes more space. How many spaces on the lot? What’s the traffic flow in a multi-story garage? And how much headroom?
It is this engineering department which Allright decided to allow to do consultation work for others on a fee basis. They had insisted previously on having a management contract or a lease commitment to operate parking before letting their engineers do any work.
“We decided we were cutting ourselves too thin,” Carothers said. He cited the case of a large Houston building where they couldn’t get the owners to commit themselves to a lease for Allright to operate a garage being built. The owners built the garage sans benefits of Allright engineering; Allright got the lease and now operates a garage which “could have been so much better,” Carothers said.
Carothers has talked with a lot of stock brokers since the move came to go on the American Exchange. “They seem puzzled by the business,” he says, “they want to read into the parking business such things as electronic parking, mechanical parking” and the like.
But the “whole secret” of the business is cash control, Carothers says. Cash control is his management phrase for making sure the company gets all the money that comes in, accounting by strict bookkeeping procedures and supervisory checks for all the cars that come in and the fees they bring.
Locations of a parking lot is another aspect. Carothers speaks fondly of a lot he no longer has in downtown Houston which, with its average 5 times a day turnover for each parking space, produced $115 revenue per car space per month.
As much as Carothers insists they are not in the real estate business, Allright certainly appears to be. He discusses land and its values with an expertness a real estate agent would envy.
Allright currently owns 42 pieces of downtown real estate here and in other cities which cost $4,596,978 and have a current market value of $8,263,270. But of its 800 parking locations, 90 percent are leased and 50 percent of these leases are for three years or less. The short lease gives the company flexibility to move as the business moves.
Carothers got into the parking business because he couldn’t find another job. Upon graduation from Rice University in 1930 he took a summer job managing three downtown parking lots owned by his uncle, W. W. Towell, because there was nothing else.
He kept at it while going to night classes at South Texas College of Law, took over when 1932 and remained in charge when Towell died a year later.
From then until 1962 there grew up a rather bewildering array of 47 corporations and 22 partnerships in many cities known as the “Allright organization.” The common denominator was Carothers, he was part of all of them.
In ’62 they made order out of this business complexity. Allright Auto Parks, Inc., was formed and acquired the stock of substantially all the previous businesses. The central headquarters functions such as engineering came into being. In 1963 Allright went public as an over-thecounter stock.
On the 20-member board of directors there are only three Houstonians and Carother’s explanation is simple. “We’re not a Houston company, we’re a national company.”
Only three of the directors are public members. The rest, Carothers says, “learned to park cars.”
One of these is Austin banker Howard T. Cox who back in 1940 made the first bank loan ever on an open parking lot in Texas. “People thought it was illegal then.” Carothers says, “but now it’s common.”
At Allright they still “learn to park cars.” The headquarters recently hired a new assistant chief accountant. What’s he doing? He is on a parking lot for 30 days, hopefully putting no creases in anyone’s fenders.