Melissa Bailey Photo
An effort to plug a multi-million dollar city budget hole with the sale of the Temple Street Garage has apparently come up short.
Last month, the city put the Temple Street Garage up for sale. It issued a request for proposals (RFP) seeking bidders interested in purchasing the city’s 66 percent share of the garage. The city’s portion was assessed at $7 million, budget director Larry Rusconi said.
That was the last piece of a plan to close the current fiscal year’s budget gap, estimated at the time at at between $5 million and $8 million.
The city’s RFP netted only one bid. It came from ProPark, a company that runs lots and garages in over a dozen states, including over 25 in New Haven. Dennis Safford, a spokesman for ProPark, said the company hopes to install a variety of environmentally friendly amenities and technology to make the facility into a “Green Garage Demonstration Site.”
ProPark’s bid wasn’t as high as the city had hoped, according to Mayor John DeStefano. The bid came in lower than the $7 million hoped for to close the budget, he said. He declined to say how much the bid was. But it fell below the amount needed to fill the budget gap.
“We’re still reviewing the bid at this point. We don’t know if it will be accepted,” DeStefano said.
Under the conditions of the RFP, a right of first refusal belongs to the adjacent Temple Medical Center, which uses the garage. The hope all along was to entice Temple Medical to buy the garage.
“We got the bid. We’ll see what it is. We’ll talk to the bidder. Then we’ll initiate a conversation with the party that has first refusal. We’ll go from there. At the end of the day, it’s not the only factor in how the budget turns out this year,” DeStefano said.
Green Garage
Safford, the ProPark spokesman, said the company would like to install its “‘Green Garage Oasis’ suite of sustainable initiatives’ at the Temple Garage.
“This would include, but not be limited to, the installation of electric vehicle charging stations, electric bicycle charging stations, complimentary bicycle parking, a state-of-the-art energy-efficient LED lighting retrofit and a comprehensive recycling program, complete with conveniently-located recycling stations throughout the facility,” Safford wrote in an email.
Those improvements could make the garage a “Green Garage Demonstrator” with the United States Green Parking Council, an organization that oversees the creation of environmentally friendly parking garages.
“Propark believes that ‘Good Carma’ benefits everyone,” Safford wrote.
The “M” Word”
Matthew Nemerson, president of the board at the New Haven Parking Authority, said this week that he had not yet seen the bid. Informed that it was under what the city had hoped, Nemerson said, “There’s got to be more than one way to skin a cat here.”
“There are many different ways that municipalities or any entities can monetize things,” he said. “We may need to look at borrowing money against dedicated revenues.”
The city could take a loan in exchange for the promise of revenue from the garage, he said. If the city isn’t happy with the bid, he said, the parking authority will try to present the mayor with other options, including monetization — basically borrowing money on the private market for a quick up-front payout in return for decades-long debt.
“We’re just waiting to see how we can be most helpful to the administration,” Nemerson said.
Nemerson’s suggestion echoes a now-discredited plan that would have traded 25 years of parking meter revenue for an up-front cash infusion of $50 million. The administration proposed that idea during last year’s budget season. It met with stiff resistance and eventually died after months of debate because — much like the pension plan deals and monetization schemes that got Connecticut, California, and Chicago, Illinois, in trouble — it saddles future officeholders and politicians with decades of crushing debt or obligations.
If we need money, get a loan.
A loan is up-front, clear, and transparent.
Do not--repeat--do not take the easy route of "monetization". As MacMillan aptly notes, it has crushed states and entire nations. It is an off balance sheet and sneaky way to get a loan.
Our CFO has the same answer to EVERY instance of this type of financial dealing: "If you need a loan, get a loan. Do not take on debt in relation to resources."