Wilkes-Barre—a community of 42,000 in Pennsylvania—has commenced procurement on a controversial parking tender that would lease garage and on-street parking for a one-time, lump sum of up to $30 million.
But the proposed bid, which last month led to a request for qualifications (RFP) due Friday, June 8, is proving a tough sell to the city council, and has been greeted with scepticism by the public.
“The response hasn’t normally been positive,” admitted Mayor Thomas Leighton.
The city is asking for a minimum $20 million bid for a 30-year lease or a minimum $30 million bid on a 50-year lease, according to the RFQ.
Under a concession agreement, the eventual private partner “would assume responsibility for the operation, maintenance, management and future development of [city parking],” read the RFQ.
The $20 million asking price is too low, according to the Wilkes-Barre council, which has final say-so on the prospective deal and which has expressed its leeriness on the would-be parking concession.
The public, meanwhile, has voiced lukewarm support for privatised parking, questioning if a private entity can be trusted to charge a reasonable rate for parking.
Leighton called suspicion of privatisation understandable, but said his administration structured a deal designed to protect public interest.
“[A private partner] can only increase the price by a certain percentage point each year,” he countered, adding the Wilkes-Barre Parking Authority has to give permission to any rate hike. “And they can only charge what the market is going to bring in”.
Wilkes-Barre first began examining privatisation in 2004 when Leighton, a Democrat, was elected mayor.
In the course of his time in office, he has tried to “rebuild [the city] in a tough economy,” said Leighton, noting Wilkes-Barre now has the fourth-largest workforce in the Keystone State, trailing, according to him, Philadelphia, Pittsburgh and Harrisburg.
That decade-long job growth, which Leighton said is concentrated in downtown Wilkes-Barre, has transformed parking—considered a noncore infrastructure holding with an inelastic demand—into a dependable source of cash flow, and in turn a potentially attractive asset.
Wilkes-Barre has 830 metered, on-street parking spots, 2,113 garage spaces and 160 surface lot spaces, Leighton explained, noting a monthly garage parking pass is priced at $70.
A concession would give Wilkes-Barre the capital needed to retire its parking garage debt, which Leighton estimated to be near $7 million. The rest of the subsequent upfront payment would be placed in a “long-term investment account,” Leighton explained, “and we would spend it on an annual basis, not all at once”.
In particular, Leighton said he planned to put the money toward “public safety and infrastructure,” claiming Wilkes-Barre is in dire need of roadwork.
The city has retained Philadelphia-headquartered law firm Fox Rothschild as an adviser, along with parking consultant Desman Associates. Desman, in the process of advising the city, publicly claimed to have never approved the price or length of either concession option listed in the RFQ, provoking further city council criticism.
Leighton said a request for proposals (RFP) would be issued about a month after Wilkes-Barre sifted through its RFQ tally. So far, he said, six consortia have responded to the RFQ.
Wilkes-Barre is the third Pennsylvania municipality to consider a parking concession: Pittsburgh and Harrisburg have both explored privatisation.
Leighton characterised the economy in Wilkes-Barre, a city founded in 1769, as far from robust.
“We’ve come a long way, but quite honestly, the economy is having an adverse impact on us,” he said.