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Cincinnati Port Authority adds bailout provision to city parking lease
Greg Noble, WCPO Digital
12:15 PM, Jun 21, 2013
5:31 PM, Jun 21, 2013
CINCINNATI - The Port Authority has added a provision to the controversial city parking lease that allows it to walk away from the deal any time during the next 75 days.
The Port Board asked the city for time to review the lease and the related components of the deal, said Vice Chair Lynn Marmer, and the city consented.
"This is a complex deal," Marmer said in a Friday release announcing that the Port Authority had signed the lease. "As a result, we will need time to make sure we have completely reviewed it. "
The Port Authority may also be hedging against possible city budget cuts or possible attempts by city council to renegotiate the lease. Some council members have declared interest in reworking the deal.
In addition, lease opponents are hoping the Ohio Supreme Court will agree to hear the case and allow a planned voter referendum in November to proceed. The planned referendum was squashed by an appellate court on June 12.
The Port Authority said its review will include an independent evaluation of the structural condition of the parking garages. That will take about 60 days, it said.
In the meantime, now that the Port Authority and the city have signed the lease, preliminary work – such as selling bonds to finance the deal -- can proceed.
Under the deal, the city's parking meters would be leased to the Port Authority for 30 years, while the city's parking lots and garages would be leased for 40 years.
In return, the city would get a $92 million upfront payment, along with annual payments of about $3 million for the remainder of the lease.
A New York-based financial consultant hired by the city to analyze the lease said the city would get $197.4 million – or 41 percent of its current market value. The remainder of the lease's value will go to the Port Authority, private contractors and Guggenheim Partners, the firm that will issue debt to support the deal.
"Implementation is still several months off," Dohoney Jr. said. "The Port still has to put the bonds out to market."
It should take about 60 to 90 days to sell the bonds, said city spokeswoman Meg Olberding.
Hamilton County Common Pleas Court Judge Robert Winkler dissolved his earlier injunction against the lease on Monday. An appellate court overturned Winkler's injunction June 12, ruling that city officials had the legal authority to enact the lease as an emergency ordinance.
Opponents hoping to force a referendum said the lease would cause rate increases, aggressive enforcement might drive away customers from small businesses, and the city was undervaluing a prime city asset.
City officials planned to use the money to help avoid deficits in the 2014 and 2015 budgets, and to quicken the pace of some citywide development projects. Instead, they used other sources of money to fill gaps in the budget, which was approved in late May.
WCPO Digital reporter Kevin Osborne contributed to this report.