The Pittsburgh Parking Authority will pay global financial firm Morgan Stanley $3 million if it can engineer a nine-figure lease of the city's public parking garages and meters, officials revealed yesterday.

The authority's board voted to hire Morgan Stanley after 14 firms pitched their qualifications to shepherd the unusual lease of 12 parking garages, neighborhood lots with around 2,000 spaces and 8,500 street meters. The firm's job will be to guide a process that Mayor Luke Ravenstahl hopes will net $200 million for the city's pension fund -- but that will likely also boost parking rates, according to an analysis commissioned by the authority.

The city's pension fund contains about one-third of the $899 million it needs to meet future obligations, and the mayor's plan calls for combining the parking lease funds with a $15-million-a-year boost in the city's contribution to the fund.

A report by Chicago-based financial consultants Scott Balice Strategies, produced for the authority last month, estimated that a 29-to-50-year lease of the public garages could raise $185 million to $225 million, and the street meters could bring in $85 million to $110 million. From the resulting total, $270 million to $335 million, the authority would have to pay off debt of approximately $104 million, leaving $166 million to $231 million.

That means the net proceeds could fall on either side of the mayor's target number. Authority Executive Director David Onorato noted that the city owns the street meters, so city council would have to vote to lease them.

Throw in garages owned by the Sports & Exhibition Authority, and the lease could net another $29 million to $43 million, according to the Balice report. But Mr. Onorato said he hasn't yet been in talks with the SEA, which is a joint city-Allegheny County authority.

Pittsburgh Councilman Patrick Dowd, who has questioned the wisdom of a long-term lease, said the Balice report suggests that the city will barely get the minimum needed to restore its pension fund.

The report found that the deal could work if the new private operator increases garage rates to the level of the private market. That could equate to jumps in all-day rates at the authority's Downtown garages of anywhere from $2.50 to $8, according to authority pricing information.

"Then we could have an uncontrolled market, and it could be damaging to business development Downtown," said Mr. Dowd. "All of the things we've been working on, making Downtown a place people want to live, work and recreate, I'm pretty sure will become more problematic."

The Balice report also says that the city would maintain control of parking meter rates, even if the meters were leased. Mr. Ravenstahl has said he does not want neighborhood meter rates to rise dramatically, as they did after a lease deal in Chicago.

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