Hey Luke. Don't try to 'lease' those parking garages. Rather, liquidate the Parking Authority.
I've been calling for the liquidation of the parking authorty for years. The parking spaces should already be leased.
Sell the buildings. Sell the land. Have the buildings become tax assets for the long-haul. When the parking decks are sold, there will be some up-front money that can go into the pension fund, if that is where you want to put it. And futhermore, the annual tax on the property will come to the city. If the buildings are leased, fewer dollars would arrive to the city.
If the real aim is to raise money, then sell.
Mayor: City to explore leasing parking facilities to pay pensionsWhy have the Parking Authority get proposals for consulting for the future of the Parking Authority? That creative thinking and vision efforts are why we have boards and parking authority administrators. And, the work of the city is for the mayor and the mayor's office too. You can do the report with administration folks -- not outside contractors.
Thursday, January 15, 2009
By Rich Lord, Pittsburgh Post-Gazette
Pittsburgh Mayor Luke Ravenstahl said today that he has asked the Parking Authority to explore the possibility of leasing its network of garages to a private operator, with the aim of raising money to shore up the city's pension fund.
Mr. Ravenstahl said the leasing of parking garages and meters raised $1.7 billion in Chicago, and that Harrisburg is working on a plan to bring in $215 million that way. He said that given those results, it's something he has "a fiduciary responsibility to explore."
"This is another piece of the ultimate, I believe, plan for the long-term legacy costs of the city of Pittsburgh," he said. "Clearly, in order to have a fully funded pension fund -- we're going to need some sort of influx of cash."
He said it could result in some increase in parking rates, and said he would try to structure any deal so that it would limit the effect on people who use the lots.
At the end of November, the pension fund contained $261 million, which is 29 percent of what it should hold to cover the payments due to retirees and current employees when they retire. The city must now put 11 percent of its operating budget into the fund.
If the city does nothing new to address the problem, the fund will be just 19 percent funded in 20 years, and will devour 20 percent of the city's operating budget.
City leaders have long viewed the authority's garages as an asset that could potentially be converted into cash, but none has gone so far as to study it, he said.
Next Thursday, he wants the Parking Authority board to vote to solicit proposals from consulting firms that would advise the authority on how it might lease the garages for, perhaps, 75 or 99 years. The chosen firm would then craft a second request for proposals to companies that would actually lease the garages.
Both processes, like all city-related contracts going forward, should be competitive, he said.
Mr. Ravenstahl said he wouldn't pull the trigger on a deal unless it would pay off the authority's $108 million debt, plus yield "hundreds of millions of dollars" for the pension fund.
If the city can pump $200 million into the fund, projections are that it would be 61 percent funded in 20 years. A $300 million infusion would bring it to an 87 percent funding level, which is considered to be healthy.
After you all write the report, then you can put it onto a web page or wiki and then the citizes can go at it. Citizens from anywhere in the world should be able to look at the plan, offer improvements and debate it on its merits. We'll make projections and hold you all to the high standard of being open, honest and prudent with these resources for the sake of the future.
Or, the mayor could let out some consulting contracts to beef up his campaign war chest. This is the ugly side of pay-to-play, more consultants.
As the process unfolds, we'd expect to see open bids -- perhaps a couple on eBay event. Sell the buildings to the highest bidders.
Furthermore, it is not wise to talk about the incomes being attached from one project to the expenses of another. The sell off of the parking authority should not be linked, as you have done, to the pensio fund. Sure, pension cash issues present a big problem. Sure, it should be talked about. But that's for another discussion.
After we liquidate the Parking Authority, over time, in a prudent and open way -- then we can talk about breaking up the Port Authority into a bus line. Then we can spin off PAT's RAIL into its own agency or private business. Same too for the tunnel and bridge and bike (err) busways.