Questions on Garage Plan

Questions on Garage Plan

An alternative has arisen to the Mayor’s plan of leasing Parking Authority garages to a private interest in exchange for a lump sum payment (that sum would be used to pay off the Authority’s debt and bring up the asset total of the City’s pension funds): making the pension funds the "owner" of the garages.

News reports describe the transaction as "giving the pension fund ownership of some or all of the city’s 11 parking garages". It is doubtful that the pension funds could buy the garages as that would further deplete the low balance of the funds, and it raises lots of questions about the merit of this proposal versus the lease or sale.

Would the Parking Authority’s bondholders allow such a transfer? Would the Authority board resist "giving ownership" away? Could they be compelled? How would the lump sum needed for the pensions be realized? How would the pension funds-which hold $52 million in debt securities and $207 million in cash and cash equivalents-do owning publicly owned infrastructure? What becomes of the debt elimination plan for the Authority?

The Mayor says he is open to the alternative and that "if this ends up being the proposal, that’s fine" while also noting that the transaction "doesn’t equate to real dollars" the way a lease or sale agreement would. Clearly it is going to take time to explore the proposal, all the while the clock on restoring the pension funds to health continues ticking.