Maintaining Scranton’s five parking garages would cost $26 million over 40 years, while demolishing one or two of the older structures that need significant repairs could drop that figure substantially, according to a new analysis.
A June 3 report by Chicago-based consultant Desman Design Management titled “Parking System Due Diligence Market and Revenue Analysis” is the latest step in Mayor Bill Courtright’s plan to unload the Scranton Parking Authority’s five parking garages — Medallion, Casey, Connell, Electric City and Linden.
The aim is to “monetize” through privatization, either leasing or selling, the authority’s underused, high-debt parking garages that have 2,659 spaces, as well as the 1,479 city-owned parking meters. The goal is to reduce the amount of SPA debt the city guarantees and covers in annual bailouts.
The authority retained Desman to assemble various elements of the parking system for evaluation by potential bidders on a lease or sale.
“In just over a year, we’ve been able to tell a different story about Scranton. A story of hope and optimism, backed up by real progress,” Mr. Courtright said.
For example, plans to unload the Scranton Parking Authority’s high-debt and under-used garages are advancing and going better than expected, he said, as the city met this week with six firms interested in acquiring them. The goal is to complete a transaction by the end of the year. Another goal is “responsible monetization” of the Scranton Sewer Authority through a sale or lease that this agency is pursuing.
Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)
Landmark Community Bank on Friday sued Scranton, its parking authority and the authority’s court-appointed receiver over a $2.6 million loan default.
Landmark loaned the Scranton Parking Authority $2.9 million in September 2011, but the SPA has not paid on the loan since the authority was stripped last year of most of its functions, funding and power.
The lawsuit was not unexpected because Landmark’s attorney, Robert Gownley, last year threatened to sue if Scranton City Council terminated a 1995 cooperation agreement between the city and SPA that was used as the basis for collateral and security of the 2011 loan. The Landmark loan was secured by the 10 percent of parking meter revenue that SPA receives under the 1995 cooperation agreement.
The lawsuit claims that city administration solicitor Paul Kelly, who at the time the loan was made in 2011 was solicitor for both the city and SPA, had told Landmark that the city could not unilaterally cancel the cooperation agreement between the city and authority.
In a stunning about-face, Scranton City Council on Thursday voted to introduce a measure to cover a debt of the Scranton Parking Authority, only a week after refusing to do so and plunging it into default.
But it would appear to be only a temporary fix, as council solicitor Boyd Hughes cited a June 7 notice of default from bond trustee Bank of New York Mellon saying a takeover of the beleaguered authority is inevitable in 30 days because SPA has preliminarily defaulted on four other counts, including:
-âFailing to submit to the trustee an independent audit.
-âFailing to submit to the trustee an annual budget of facilities prepared by a consulting engineer.
-âFailing to keep financial records separate from city records and have them certified in an annual audit by city Controller Roseann Novembrino.
-âFailing to have an engineer perform an annual review of physical status of facilities.
The effect of Scranton City Council allowing the Scranton Parking Authority to default on a debt was immediate on Friday, officials said.
The bank that the city had been hoping to get financing from to be able to keep the city afloat this year, M&T Bank, backed out first thing Friday morning because of the default, said Mayor Chris Doherty and city Business Administrator Ryan McGowan.
On Thursday night, council voted against covering a $940,000 SPA debt that was due Friday, thus allowing the authority to default even though the city had backed the debt.
“The city defaulted on the guarantee. This default has left us with nowhere to go,” Mr. McGowan said of the city’s hopes for getting loans.