The Parking Authority met last night and voted on a sale/lease agreement on city garages. We voted unanimously in favor. It’s a great deal for the city and it’s going to help dig us out of the deep hole we’re in.
- The SPA will sell the Electric City Garage (next to the movie theater downtown) to John Basalyga (the gentleman rescuing the Mall) for $1. He will lease it back to us in return for an up front payment of $2.8 million. That money is earmarked for the repair of the garage. While the SPA is paying 55% of the repair cost, it ends there. As in, Basalyga will cover all costs related to repairs and upkeep, since he owns it. This lasts the life of the agreement (which, for this garage, is 29 years). It will, along with all SPA garages, be restored and upgraded to a first-class facility. Oh! And it’ll be on the tax rolls.
- The SPA will lease 500 parking spaces at the Marketplace at Steamtown for $4.8 million. This sounds hefty, but it’s not quite so bad. First, the money is going to function like a development loan in that Basalyga will be using it to invest in the mall. Second, and most importantly, the SPA makes most of its revenue from monthly parkers, not random day-to-day parkers. We get all of that revenue for the life of the agreement. Between this and the EC Garage sale, we’ll pull in around $10 million when all is said and done. A worthwhile investment.
- NDC, a non-profit, will lease the garages, EC and the Mall included, as well as the parking meters, from the SPA for a period of 45-49 years.
I’ll stop with the bullets now.
The benefits of this agreement are pretty awesome, to put it simply. Right now, the city has paid the Receiver about $1.5 million since the default. That doesn’t include the roughly $3 million in guaranteed debt service that’s paid yearly. With the $33 million purchase price, the majority of the debt goes away. The city refinances the rest at historically low interest rates, saving a fortune. And the city isn’t guaranteeing the debt from NDC, so we are off the hook!
Also, once this is done, no more legal fees! Currently the city and SPA spend a fortune on legal fees related to the receivership.
Here’s where it benefits the community (bullets are coming back):
- Monthly parking rates go down. (This is where the revenue really is.)
- The city reserves the right to halt meter enforcement for downtown events (like Parade Day and La Festa, for example). This is great because the city essentially is retaining a say in how things are run, despite the lease agreement.
- The meters and garages will be operated by the same entity. This is a big one for me. The plan is to set meter rates in a way that drives longer-term parkers into garages. This makes sense. Right now, this doesn’t happen. Additionally, the city has a say in any rate changes NDC makes.
- And, are you ready? This is why I voted for NDC: after NDC pays its bills, any money left over RETURNS TO THE CITY! Even better, it’s in the form of grants for community projects, so we won’t see it thrown at debt service or anything. Need a park upgrade? Grant! Need a street paved? Grant! That’s NDC’s mission, basically. They exist to invest in communities.
Despite the Times editorial from the other day (which stated that we should’ve bid the EC garage), we bid it last year. Nobody wanted that garage individually. The Times really was just looking for an excuse to attack the Mayor, since they haven’t in about a week or so. Their editorial team gets antsy if they don’t blame Courtright for Doherty’s mistakes.
Anyway, the blistering public comment mentioned in today’s article wasn’t all that blistering. The two women who spoke stated that they couldn’t hear the presentation or see it due to their ages. So, while it may not have passed their smell test, as they stated, they didn’t have all the information, I think. Even though we’re selling the EC garage for $1, we are making back a ton in the long term. And along with EC, we also get fully upgraded facilities. At no cost to us. So when the lease ends, we will have state of the art garages that have been maintained for decades. We just can’t do that right now. Probably not ever, on our own.
One comment did stick out, though, and I feel the need to respond. Marie Schumacher, whose comments I often enjoy, said we should table the resolutions for a week since the assets we are leasing are the property of the public. The public, she said, needed more time to digest. We on the SPA are there to represent the best interests of the public, a duty I take very seriously. It’s how representative democracy works. There wasn’t any kind of end-run or shadiness or backroom deal here. Our lawyers negotiated with the parties involved, we reviewed everything, and we made a decision that we felt was best for the city. In fact, it’s pretty demonstrably wonderful for the city. I wouldn’t have voted for it otherwise.
If anybody has questions, I’m happy to answer, despite the Times article suggesting otherwise. Feel free to post in the comments or e-mail me!