City Council keeps parking lease conversation going

The City Council unanimously voted to keep conversations going with bidders interested in taking over the city’s parking operations – and set the stage for a Feb. 28 vote finalizing plans for a new entertainment and sports complex.

“Today is about narrowing 13 (bidders) down to 10, and it’s an intermediary step to a more significant vote,” Mayor Kevin Johnson said.

Council chambers were full Tuesday night, and members of the public who signed up to speak included eight opposed to the prospect of a long-term lease of the city’s parking and 30 people in favor of it.

Project Manager Fran Halbakken described the bidding for control of city parking operations as a competitive process, where the City Council whittles down the number of potential parking operators, eventually finalizing a term sheet agreement with a single operator.

The plan to turn over the city’s public parking assets to a private party – in return for an upfront payment of an estimated $185 million to $240 million – has come under fire since the idea was first floated by the Think Big Committee in November.

“The people who want the arena should pay for it,” Sacramento resident John Bloomer said during public comment. “Let them do it. We think people will be further inhibited from coming (to downtown) because the parking rates are going to go up.”

The proposed 50-year lease of the city’s parking operations is expected to be the cornerstone of a complex financing plan to build a new arena at the downtown railyards – and prevent the Sacramento Kings from relocating.

Thirteen bidding teams responded when the city began the search for parking lessees, according to the city staff report. The list of potential bidders was narrowed to 10 by staff and outside consultants before being presented to council members Tuesday.

Some of the criteria used to evaluate potential bidders included financial strength of the bidding team, sources of capital, ability to make an upfront payment and each bidding team’s strength and experience as a parking operator.

Tuesday’s vote doesn’t commit the city to continue the process – but it does indicate council members’ willingness to take the next step.

“This isn’t a vote for the arena or against the arena. There is no money exchanging hands yet,” Sheedy said after the vote.

According to the staff report, before the City Council can proceed to actual lease proposals, it will first need a financing plan in place for the entertainment and sports complex, and it will need to identify enough revenue to make up for initial parking revenue losses from the city’s general fund.

There will also need to be a budget for the consultant costs for the process of finding a parking operator, according to the report.

Sheedy called for a “much more in-depth” process for public outreach as the council starts to take a closer look at the bidders list.

“People really need to see what we’re doing,” Sheedy said.

Tuesday’s vote comes on the heels of a 5-4 vote Feb. 7 against putting the parking lease plan on the June ballot.

“Today (we took) a significant step,” Johnson said. “We voted unanimously to do something mostly ceremonial today, but it puts us in a position for Feb. 28 to be all in.”

Halbakken said the next step in the process will be for city staff to further evaluate bidders to reduce the list, and to begin to establish the parameters of financing terms for a potential lease.

Melissa Corker is a staff reporter for The Sacramento Press. Follow her on Twitter @MelissaCorker.

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Avatar of P W
February 15, 2012 | 5:54 AM

New arena or not – the Kings need new ownership. According to my sources within the organization, we’re not attracting big name entertainment because some acts have been complaining that they’re not being promptly paid. If we manage to actually get this thing built, perhaps that will attract a serious buyer who will have a turn-key opportunity with the Kings and be able to attract the all-important concerts to the new arena. Tractor pulls and Evangelical gatherings aren’t going to cut it.

February 15, 2012 | 10:14 AM

new arena would have AEG running it, not the Maloofs.

February 15, 2012 | 7:57 AM

I cannot believe how lazy, careless, and complacent Sacramentans have become. Their government is selling them out to private enterprise. The parking garages are a government function, and their government is telling them they don’t want the job. This is just so ridiculous. You have a handful of self-serving politicians who only serve for a couple years making a decision that lasts for dozens of years, just so they can spend the money during their short terms. The city is contracting out your government. why do you even need them if they won’t manage the city? What employee tells their bosses they won’t do the work, and they’re going to get a proxy at the bosses expense? Only in government…..

Avatar of P W
February 15, 2012 | 9:34 PM

But wouldn’t this result in, uh, smaller government and more opportunity for, uh, free enterprise?

February 15, 2012 | 10:57 PM

Yes, cutting in the middleman always makes things more efficient.

February 16, 2012 | 3:52 PM

It would be smaller government if the city sold off the property entirely, and let free market forces decide whether to build parking lots. But the city council through their planning department still decides if a parking garage gets built or operated in this scenario.

February 15, 2012 | 8:28 AM

Any time a news outlet reports on the leasing of public parking in Sacramento and they tout the $185-$240 million dollar estimate and then DOESN’T mention the fact that before any private firm can take control of the city garages $50 Million in bonds must be repaid, it is doing the people of Sacramento a disservice. Isn’t $50 million enough of a figure that it deserves to be mentioned? Russell Fehr,
City Treasurer, can explain it to anyone who bothers to listen.

February 15, 2012 | 9:32 AM

Just build it! Sheedy, McCarty, D. Fong and Pannell can just move to Mayburry.

February 15, 2012 | 11:22 AM

Why don’t you just pay for it then!

February 15, 2012 | 1:15 PM

That is Mayberry

February 17, 2012 | 11:08 AM

If this is Mayberry, who is our Barney Fife? :-)

February 15, 2012 | 12:15 PM

How wonderful to see a 9-0 vote on the ESC. Thank you Kevin McCarty.

February 15, 2012 | 1:57 PM

Get it done! Tired of this backward, urban redneck mentality.

February 15, 2012 | 8:16 PM

Staff narrowed it down from 13 to 10 bids–and Councilmember Cohn asked staff to add one of the.groups considered unqualified by staff (Aaron Zeff’s Priority Parking) back on the list. As I recall, Zeff raised the idea of privatizing Midtown parking back when he was President of Midtown Business Association. During his tenure, MBA produced a guide to Midtown parking that included his Priority Parking lots but not the state-owned East End Garage that the city paid to provide cheaper Midtown parking for visitors.

February 16, 2012 | 10:49 PM

In addition to explaining the $52M in bonds that will need to be repaid, the City’s documents also explain why the meters can’t be leased out — State laws prevent it.

This lease-out really cannot raise $200M. That would be nearly impossible. It’s extremely likely it won’t raise $150M. I hope the term sheets don’t revolve around too high a parking lease-out revenue estimate.

February 21, 2012 | 8:34 PM

Sacramento doesn’t need the olympics, we need cops and more charter schools not to mention less available metered parking spots near my bank on 7th.

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