Seven teams, including several prominent private equity firms and parking operators, have qualified to compete in the next round of bidding for Pittsburgh’s parking assets, according a statement issued by the city.
But the bidding process continues to be clouded in uncertainty by Pittsburgh City Council’s decision to evaluate alternate proposals for refilling the city’s depleted pension besides leasing, or monetising the city’s parking garages, lots and meters. A bill to undertake such an evaluation has now become law.
Last month, 11 potential bidders expressed their interest in such a lease. After reviewing the submissions, the city said in a statement Monday that seven teams were qualified to continue in the competition. The firms included:
• Infrastructure fund manager Alinda Capital Partners, Xerox-owned outsourcing company ACS, parking manager InterPark;
• Private equity firm The Carlyle Group’s infrastructure fund, parking manager Standard Parking Corporation, UK-based outsourcing company Serco Group;
• Spanish road developer Cintra Infraestructuras;
• Private equity firm EQT Partners and parking manager Central Parking System;
• JPMorgan Investment Management, the asset management arm of JPMorgan Chase;
• Private equity firm Kohlberg Kravis Roberts, parking manager Amcpo System Parking, parking enforcement provider Duncan Solutions;
• Infrastructure fund manager LambdaStar, private equity firm Aurora Capital Group, parking manager LAZ Parking, a LAZ-affiliated investment vehicle known as P4 Partners.
The four firms not selected to compete in the next round of bidding included UBS Global Asset Management, the asset management arm of UBS; Prestige Infrastructure Capital, a municipal asset investor named Prestige Infrastructure Capital; Philadelphia-based parking manager Parkway Corporation and real assets-focused private equity firm Bainbridge ZKS, according to the statement.
Scott Kunka, Pittsburgh’s director of finance and chairman of the city’s parking authority, said in the statement that the “strength of the qualified parties will result in a highly successful outcome for the city and its residents”. The city is looking to lease the parking assets for 50 years in order to raise cash for its pension, which is only about 30 percent funded.
But the final outcome of any bidding will have to withstand the scrutiny of an independent valuation of Pittsburgh’s City Council. Last month, the council passed a bill that would evaluate the financial attractiveness not only of the lease proposal, which is being championed by Pittsburgh Mayor Luke Ravenstahl, but also several other money-raising proposals floated by Pittsburgh city council members.
One such proposal is a so-called “public plan”, where 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. Other proposals 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.
Mayor Luke Ravenstahl declined to sign the bill authorising such an evaluation, thereby indicating his disapproval. But the bill still became law without his signature because he did not veto it. A spokesperson for the mayor did not return a request for comment.
Pittsburgh Deputy City Clerk Mary-Beth Doheny said the likely next step in the evaluation will be for the city’s law department to draft an agreement to hire the party selected to conduct the study. The bill handed the job to the Government Finance Officers Association, a professional organisation for public-sector financial executives.
The next step for the lease bidding process will be for the seven qualified parties to analyse the parking system’s more than 17,500 spaces, according to the statement from the city. Each team will be given the opportunity to respond to a request for non-binding feedback and a request for proposals, which will ask each team to indicate how much they would be willing to pay up-front for a lease of the assets.
The request for proposals is expected to be issued in June with responses tentatively due in July, according to the statement.