Parking-pension fix is certain to be costly
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It's a truckload of money, $452 million, but is the city getting a good deal?
Mayor Luke Ravenstahl's plan to lease the city's parking garages and meters for 50 years resulted in an offer that far exceeded the numbers he'd estimated. He'd like to take the lion's share of that windfall and shore up the city's pension fund and avert a state takeover.
But Martin Berger, a Downtown business owner and longtime parking lease holder, is among those suggesting the city would be getting hosed.
"They're selling a billion-dollar asset at half-price,'' Mr. Berger said, "to the shrewdest investors in the world.''
I walked down Liberty Avenue to see him. For the past 19 years, Mr. Berger, 73, has owned a building at Ninth and Liberty that still has an elevator operator. The man rides you up after he lets you in the front door. It's a setting straight out of a 1930s detective novel.
Mr. Berger has done well in real estate and also runs a company that connects inventors with industry. A Mount Washington resident, he doesn't expect that a hike in parking rates will put him on a bus. Most of his more than 100 employees arrive by bus, but Mr. Berger is worried for those who don't.
"I can't hire people if they shell out 3,000 after-tax dollars [for a year-long parking lease],'' he said. "That's three times what they pay for hospitalization.''
Some commuters pay that already, of course, and this deal would allow the private operator to jack up fees considerably. Mr. Berger suggests the city keep the garages and meters, adjusting the fees and enforcement somewhat, and netting the extra millions itself.
"We should not be blinded by the short-term fix,'' he said.
A private operator raising rates by 30 percent won't care much if he loses 10 percent of his parkers. He'd still be way ahead. The city wouldn't be, but once that asset is gone, there would be no way for the city to adjust if billions of business-tax revenues were threatened by 50 years of predatory pricing.
City Council spent a couple of hours Friday afternoon taking in a report that confronts these questions. No option really solves the city's pension woes. As Councilwoman Natalia Rudiak put it, choices range from "bad to worst.''
First Published September 26, 2010 12:00 am
