Lease Components Coalescing?

Here is a summary of the recommendations of an advisory task force on the proposed parking lease:

  • The prospective lease holder would not be constrained by rate caps, but would be guided by "market factors, industry standards, and regional inflation"
  • A 50 year lease term
  • The Parking Authority would continue to exist, but it might or might not be able to build new garages
  • Authority employees would get jobs with the lessee, the Authority, the City and would not lose existing pay and benefits

Since all of these recommendations are non-binding, it is anyone’s guess as to what would make it into an eventual executed lease. It is encouraging that the task force did not advocate for rate caps-perhaps it was because it was not their place to say, perhaps they realize that maybe the parking market forces can work to allocate the resource of parking, or perhaps they did not want to keep that condition going forward in the lease, realizing that the more conditions up front will lessen the take from the lease.

The recommendations do raise the important question about the Parking Authority’s place in the equation after a successful lease deal. For one, will they have any role other than managing the lease? Will they own other properties that will continue to operate as parking facilities? Or will they simply be monitoring the terms of the lease?

There is nothing in existing Commonwealth law that would prohibit the City from creating a new Parking Authority should the present one be dissolved (part of the up front lump sum is supposed to pay off the Authority’s debt) and likely some type of clause would have to be added to the lease that prohibited publicly owned parking. And if there are extensive and numerous lease details it is possible that the function could be moved to the City government proper.

Lastly, there has to be a realization that if Authority employees land jobs with the lessee and pay and benefits remain intact that rates will rise in order for the lessee to achieve an adequate return.