Federal investigators have asked questions about Urban Redevelopment Authority parking lot leases that were issued through a controversial process to a firm run by a supporter of Pittsburgh Mayor Luke Ravenstahl.
The lot leases were extended by the Urban Redevelopment Authority of Pittsburgh to William Penn Parking, a Green Tree firm owned by Robert Gigliotti, 46, of Banksville, despite the fact that the company ultimately offered the URA lower monthly payments than did other bidders.
On Monday, two people who were involved with the lease process told the Pittsburgh Post-Gazette that FBI investigators have asked them questions about it. One of them said the FBI asked about the leases in 2008. The other said the FBI reached out in September 2012 and again in January. Both asked not to be named because they did not want to jeopardize their business interests.
Their accounts come as a federal grand jury probing the administration prepares to meet again. The grand jury on May 8 heard testimony from the mayor's senior secretary and two police sergeants who have served on his security detail. Another former bodyguard, Fred Crawford Jr., is expected to appear today.
It's unclear whether the grand jury will hear testimony today on the parking lot leases or on other interactions between Mr. Gigliotti and the city. On May 6, city police brought to the U.S. Courthouse records reflecting parking variances granted to firms -- including valet companies like Mr. Gigliotti's Tri-State Valet -- that seek authorization to park cars on city streets. Police have said that Tri-State got more variances than did competing valet firms.
The URA controls a number of properties that are used as parking lots and long has leased them out to bidders willing to commit to monthly payments in return for the right to collect cash from commuters. According to a firsthand account provided to the Post-Gazette, the mayor was copied in late 2007 on emails from his chief of staff Yarone Zober to URA staff regarding the status of the lot leases.
In December 2007, according to the account, Mr. Zober authorized URA staff to issue a request for proposals from companies interested in leasing four lots. He later had the process postponed, and it ultimately occurred in February. Mr. Ravenstahl was copied on the emails.
Mr. Zober said in an interview that he did not recall the email exchanges and did not know why the mayor would be copied in them. He also said he doesn't recall giving a directive to put out a request-for-proposals for the lots, but may have been acting on a recommendation from URA staff.
Though he was, and is, the chair of the URA board, he said the issue of bidding out leases for URA-owned parking lots was a minor one.
The exchange came about a year and a half after the mayor took office, and Mr. Zober surmised that he may have been attempting to keep the mayor in the loop on URA developments.
Though the process outlined in the requests called for a vote of the URA board before any lease award, and set maximum rental payments as the first goal, neither occurred. Instead, in June the URA staff, then led by Rob Stephany, picked the winners based on other considerations in consultation with Mr. Zober.
One of the lots in question sits immediately behind the building at 200 Ross Street that houses the URA and other city-related offices. William Penn Parking bid $12,950 a month, while another firm pledged $15,000. Nonetheless, the URA awarded the lease to William Penn Parking, explaining later that the company promised to keep its parking charges flat for a year, while a competitor planned to raise rates.
Mr. Zober said he recalls there were service issues that were considered in addition to how much the leaseholders planned to charge patrons. It was not a decision made purely on how much revenue the URA could bring in on the lots.
Mr. Stephany, who was the executive director of the URA in mid-2008 and now works for the Heinz Endowments, said Monday that the agency decided to forgo the added revenue in order to improve customer service and avoid a jarring rate increase for people who visit the city-related offices.
He said he remembered "Gigliotti getting a shot at this because it was out to bid," Mr. Stephany said. "I did not have Yarone or the mayor breathing down my neck."
In 2008, Mr. Gigliotti committed to retaining, for one year, a rate structure that ranged from $5 for one hour to $9 for more than four hours. William Penn Parking has since increased the rates to $8 for an hour, and $12 for anything beyond two hours.
Also in 2008, William Penn Parking bid $1,200 a month for the right to operate the Pittsburgh Produce Terminal lot in the Strip District, but was later allowed to lower its bid to $717 a month -- $450 below a competing bid, and just $17 above another. That lease terminated at the end of 2010 when The Buncher Co. took control of the lot.
Mr. Zober said he did little more than endorse the URA's choices for the lots. Someone on the URA staff -- he could not recall who -- sent him a slate of the authority's recommendations for the lots, which included William Penn Parking. Mr. Zober said he trusted their expertise. He said he wouldn't have seen the other bids.
"I wouldn't have done an analysis on a bid by bid," he said.
In 2011, the URA sought bids on another lot, just a block from Consol Energy Center in the Hill District. According to documents provided by the URA, three firms bid, and that time William Penn Parking was the uncontested highest bidder, at $7,500 a month. That lease was signed on Feb. 28.
FBI agents in or around September approached one person with knowledge of the lot lease process and said they were "looking over old papers and old newspaper stuff," and wanted more details, that person told the Post-Gazette. The agents then asked for, and received, a second meeting in January, the person said. The person said the FBI wanted to know whether campaign contributions could have affected the process.
Tri-State parks cars for the Le Mont restaurant on Mount Washington, where many political fundraisers are held. In 2011, Mr. Gigliotti was one of many host committee members for a $500 per person fundraiser for the mayor's political committee.
Mr. Gigliotti could not be reached for comment by phone or through visits to his office and home.
The mayor's attorney, Charles Porter Jr., could not be reached for comment. The mayor's press staff did not respond to an email and phone call inquiring about Mr. Ravenstahl's involvement in the process.
An attorney for the URA said that federal investigators have neither visited the city-related agency nor asked for documents.
The Nov. 16 indictment of Robinson entrepreneur Art Bedway was the first public indication of what has become a broad investigation. Mr. Bedway, 63, was charged with conspiracy, bribery and mail fraud in relation to a contract to install and maintain radios and computers in police vehicles, and is scheduled to plead guilty on Aug. 6.
Former city police chief Nate Harper was indicted in March for conspiracy related to the diversion of some $30,000 in public funds for his private use, and failure to file tax returns. He has pleaded not guilty, but his attorneys have said that he plans to plead guilty and has met with investigators at least seven times this year.
Federal investigators also have received records of Mr. Ravenstahl's home renovation project, Mr. Porter has said previously.