Pittsburgh's Urban Redevelopment Authority discarded its own rules for awarding parking lot leases earlier this year, putting two parcels into the hands of a firm with political ties.
The lots -- Downtown and in the Strip District -- are now run by William Penn Parking, a Green Tree firm owned by Robert Gigliotti. He's known in government circles as the valet provider and some-time political liaison at LeMont restaurant, scene of high-dollar fund-raisers, including Mayor Luke Ravenstahl's.
The URA awarded William Penn control of the Downtown lot despite the fact that Kail's Parking offered to pay the agency $2,050 a month more. In the Strip District, William Penn won the contract with the high bid of $1,200 a month, then was allowed to lower the amount by $483 a month -- a move that an executive from runner-up Central Parking called "not standard procedure."
As a result, the URA is forgoing $91,188 in rent over the terms of the three-year leases, compared to what it could have gotten by sticking with the highest bids.
The leases were awarded without a vote of the URA board, though the agency told bidders in writing that the board would make the decisions. The URA gave the Pittsburgh Post-Gazette a written explanation for the awards, writing that acting Executive Director Rob Stephany made the decisions, in consultation with board Chairman Yarone Zober, who is Mr. Ravenstahl's chief of staff.
"I would think for the sake of transparency, you would want your board to approve that," said city Controller Michael Lamb, who is looking into URA contracting. "They've told [bidders] that this is going to come before the board, so why didn't it?"
The URA leases at least 16 parcels to firms that use them as parking lots, either for their own employees, or for people who pay to park. The firms pay the URA rents, some determined through competitive bidding.
Kail's Parking long operated three lots -- Downtown on Third Avenue near Ross Street, in the Hill District off Colwell Street and in front of the Strip District's Produce Terminal -- paying the URA some $2 million in rent since the 1990s.
URA staff had been considering rebidding the lots for some time, according to URA general counsel Don Kortlandt.
"We were paying a competitive rate and doing a great job, so there was really no reason to bid it out," said Bob Kail, co-owner of Kail's Parking, during a brief interview.
Early this year, Executive Director Pat Ford said the time had come.
"The mayor directed Pat to issue the [request for proposals] at issue," Lawrence Fisher, Mr. Ford's attorney, told the Post-Gazette on Aug. 26. Mr. Ford has since resigned, alleging "inappropriate affairs" after more than four months on paid leave during a state Ethics Commission review of his receipt of gifts from a billboard company executive.
In February, the URA requested proposals from firms interested in the Kail's lots, plus another on Fourth Avenue, Downtown, that was run by Nashville-based Central Parking.
The request for proposals said the goals were to maximize the rents paid to the URA, ensure good management and secure "competitive rates" at the lots.
The Downtown lots were the big prizes, and Kail's offered to pay the URA $15,000 a month each -- the highest bids.
Kail's got the lease for the Fourth Avenue lot. But Third Avenue went to William Penn Parking, though it offered just $12,950 a month.
"It's mind-boggling to me that Kail's can submit a far better price, and William Penn gets the contract," said James Tramonte, president of In and Out Valet Co., who said he'd have bid if he had heard about the solicitation.
The URA explained that while Kail's was proposing to raise parking rates at the lot -- by $1 to $2 on times longer than an hour -- William Penn pledged to keep rates flat for one year. "Many of the customers who use this lot are customers or employees of the city, and a rate increase was not justifiable," the URA wrote.
For the Strip District lot, William Penn made the highest offer, at $1,200 a month, edging out Central Parking by $33. But later, William Penn was allowed to change its bid to $717 a month -- $450 less than Central's bid, and $17 higher than Kail's.
Central was disqualified because it wanted changes in how the lot is manned and in some lease terms, URA staff wrote. William Penn got the lease.
"It's not standard procedure to allow an applicant to change a bid," said Richard A. Doetterl Jr., Central's general manager. If the winning bid doesn't work, "you go back out to bid."
Mr. Lamb said the law doesn't bar agencies from allowing firms to change bids on professional services contracts.
Now Kail's has asked for a break on its rent for the Fourth Avenue lot, Mr. Kortlandt wrote, and the URA will "determine an appropriate course of conduct."
All Colwell Street bids were rejected because the parcel is needed as a staging area for arena construction.
The leases took effect in July and August without going before the URA board. Staff was "not aware" that the request for proposals put the decision in the board's hands, wrote Mr. Kortlandt.
Mr. Gigliotti is best known in political circles as the valet for LeMont, where he is involved in handling political fund-raisers.
His wife, Linda Gigliotti, is the Pittsburgh police officer who coordinates other officers' off-duty, private details.
Mr. Gigliotti runs William Penn Parking and Tri-State Valet, both of which periodically hire city police officers to provide security for private businesses, including LeMont.
URA contracting is getting some scrutiny. Mr. Lamb met Wednesday with URA officials and asked for documents related to the award of a construction management contract to McTish, Kunkel & Associates, despite the fact that it was not the lowest responsible bidder, until it was allowed to change its bid.
The URA in May granted the road work management contract for South Oakland's Pittsburgh Technology Center to McTish, despite the fact that Trumbull Corp. was initially the lowest responsible bidder. McTish was then allowed to lower its bid by $100,000, to $425,000, which made it the lowest responsible bidder.
The URA explained that it is trying to widen its contracting pool, and while Trumbull has done much work for the agency, McTish has done little.
Mr. Ravenstahl has said there was no connection between the award and a $10,000 campaign contribution from Matthew McTish, the firm's president.
Rich Lord can be reached at firstname.lastname@example.org or 412-263-1542.