Pittsburgh passes bill to study parking PPP alternatives

Council member Ricky Burgess warns that conducting such a study so late in the process could have a ‘chilling effect’ on investor interest and jeopardise Pittsburgh’s ability to get a good price in a potential auction for its 20,000-space parking system.

A resolution to study alternatives to a proposed long-term lease of Pittsburgh’s 20,000-space parking system has passed its city council by an 8-1 vote, opening the door for a different course of action even as the city is actively qualifying bidders to participate in an auction for such a lease.

“We’ve had months, not weeks, to begin this process”, said council member Ricky Burgess, the lone dissenting vote on the measure. “Once we ask investors to come in, all this has a chilling effect.”

Ricky Burgess

The study would put a price tag on the value of a long-term concession, or public-private partnership (PPP), for the parking assets, as well as several other alternatives. These include keeping the parking assets in the hands of Pittsburgh while increasing parking rates and issuing bonds, an outright sale or privatisation of the assets and a privatisation with a revenue-sharing agreement.

A so-called “public plan” is also under consideration, whereby the city would transfer enough of the parking assets into the ownership of Pittsburgh’s pension plan to bring it up to an adequate funding status.

The city must get the pension, which is only about 30 percent funded, up to the 50 percent mark by 1 January of next year or risk losing the management of the pension to state authorities and pay $20 million a year to refill it. This has been the main motivating factor behind a parking deal of any sort.

Mayor Luke Ravenstahl, who has come out in favor of the PPP option, has yet to sign the measure authorising the study into law. A spokesperson did not return a call for comment before press time.

Burgess said his biggest fear is that the measure will prevent any deal from getting done, leaving the city’s property owners on the hook with a tax increase of between 30 to 40 percent to scrape together that extra $20 million a year.

We'll be tipping our hand

Ricky Burgess


“This really is just an attempt to slow down the process, to micromanage the process. And my fear is, in micro-managing the process, we will not get the deal done,” Burgess said.

City council members Darlene Harris and Nataila Rudiak, who are both supporting the measure, have said that the study is just an attempt to complete the due diligence on the part of the taxpayers, as the council will ultimately be asked to approve any long-term lease of the parking assets.

The proposed study came on the heels of a hearing at which Chicago alderman Leslie Hairston, one of five dissenting votes in the Chicago City Council’s 2008 decision to lease its parking meters, urged Pittsburgh to carefully study all alternatives before making a decision on a similar deal.

“It is important to have all of the information before a decision is made that is that significant,” Hairston said, adding that she wished she had known what the value of the meters was to the city before she cast her vote on the $1.16 billion deal.

By pricing all the alternatives and determining their value for the taxpayers, council member Harris said in an interview last week that the Pittsburgh city council will have a quantitative way to compare the value of a long-term lease with other options.

Burgess said he has no problem with due diligence. But he worries that pricing the alternatives may give away too much information to potential bidders and undermine an auction process for the parking assets.

“I don’t think we ever want a public number to be released if we’re trying to get people to give us the best bid,” he said. “We’ll be tipping our hand.”

To prevent this, the bill passed with an amendment from Burgess that would limit the disclosure of the findings of the study only to the city council members. But Burgess still worries that, as a public body, information will leave the city council.

“The concept is right,” he said of the study. “The execution is wrong.”