City Double Parking on Lease Idea

Under the timeline contained in the "Request for Concessionaire Qualifications" released by the Pittsburgh Public Parking Authority earlier this year, prospective bidders interested in entering into a long-term lease for the publicly owned parking assets were to submit responses to the RFQ by March, due diligence on the applicants would be done through June, final proposals would be due in July, and a close of the deal would occur in November.

That timeline is predicated on the fact that the purpose of the lease is to turn an up front lump sum into a deposit for the anemic pension funds. Under existing state law, if the City can show a 50% minimum funded ratio (assets/liabilities) by the valuation taken in January 2011 then it is business as usual. If that 50% is not met, then the state is going to take over administration of the plans.

So one has to wonder what, if anything, the proposed action by City Council to spend $250k by amending the Capital Budget and Community Block Grant Budget to engage a consultant to study the lease idea does to that timeline and the plan. Presumably, Council is going to have to sign off on the lease idea in the end (notwithstanding any complicated financial arrangements, the Authority owns the assets up for lease consideration) and wants to have the best information available. But what happens if their analysis stretches past the established period of due diligence that is supposed to wrap up this month? What if it even goes into the dog days of July when the pool of bidders (11 parties as of March) is submitting final proposals?

The Parking Lease: What’s Included?

The City will arrive at a critical juncture in the next ten days: that because parties interested in pursuing a lease of the City’s parking facilities have until 5 PM on March 19th to reply to the Request for Qualifications proposal. The lease (or concession, as it is described in the RFQ) will "grant certain operating management, and revenue collection rights for a certain period of time in exchange for an upfront, lump sum payment".

That lump sum payment is expected to be used to pay off the Parking Authority’s debt and the remainder for helping the City’s ailing pension funds. At least $200 million would be needed to bring the funds to a level of health necessary to avoid a state takeover of the pensions.

So what exactly is to be included in the lease?

  • 8,987 spaces in 11 garages and 1 attended lot in Downtown, Oakland, and Shadyside
  • 6,931 spaces served by on street meters
  • 1,776 spaces in metered surface lots

All in all, some 17,694 spaces are up for grabs, but the RFQ points out that "certain facilities, assets, and elements may be added or removed during the process and will be further detailed in the subsequent RFP". Much of that continues to play out as Council debates as to how the deal will be structured.