Pittsburgh rejects parking deal, state rejects Pittsburgh budget

The nine-member Pittsburgh city council turned down a $452m offer from a JPMorgan group, putting a final end to nearly two years of deliberations over whether to lease its parking assets. In related news, a state oversight body rejected Pittsburgh’s 2011 budget, which had assumed council would approve the deal.

The Pittsburgh City Council has issued its final rejection of Mayor Luke Ravenstahl’s plan to lease the city’s parking assets for $452 million, ending a nearly two-year long process for what would have been the biggest parking deal since Chicago’s lease of its parking meters.

As in last week’s preliminary vote on the deal, only one council member, Ricky Burgess, voted in the affirmative on Ravenstahl’s package of four bills authorising the plan. The rest of the nine-member council either voted against or abstained.

Council’s rejection coincided with another rejection: the Pittsburgh Intergovernmental Cooperation Authority (ICA), an oversight body created by the state to help Pittsburgh find its way out of its fiscal troubles, turned down the city’s proposed 2011 budget.

The budget had assumed that Ravenstahl’s parking lease would be accepted by council and leave the city with a $452 million windfall with which to shore-up its finances. ICA head Henry Sciortino had previously told Infrastructure Investor that the authority “will not accept numbers that are contingent”.

A video of the today’s deliberations on the parking deal was not immediately available. But the Pittsburgh Post-Gazette reported that representatives of local police and fire union attended the meeting to make a personal appeal to the city council to at least table the parking proposal instead of rejecting it.

Darlene Harris, the president of the city council, said in response, “one thing I've learned from unions is not to privatise,” according to the Post-Gazette’s report of the meeting.

Ravenstahl had championed the leasing of the city’s parking assets as a way to raise money for Pittsburgh’s under-funded pension plan. Absent a cash infusion of about $220 million, the city risks losing control of the pension to the state under a 2009 Pennsylvania law.

The Mayor’s plan had attracted a $452 million lease offer from a JPMorgan and LAZ Parking-led investor group. JPMorgan and LAZ said in a statement they were “disappointed” the deal did not advance despite their attempt to be sensitive to the council’s concerns.

“Our hope is that the City of Pittsburgh and other municipalities and government agencies around the country learn how important it is in a process like this one to have alignment between city council members, the office of the mayor and other important stakeholders,” the companies stated.

An alternative plan for saving Pittsburgh’s pension plan – one in which the city would sell its share of the parking assets to the Pittsburgh Parking Authority in exchange for up to $220 million – is up for debate tomorrow, according to city council’s calendar.