Port Authority wants $27M from Cincinnati's parking lease
Port vice-chair: 'City lied to the public'
Kevin Osborne, WCPO Digital
7:12 PM, Jul 18, 2013
2:08 PM, Jul 19, 2013
CINCINNATI - Vice Mayor Roxanne Qualls is leading an effort to give the Port Authority $27 million of the $92 million upfront payment the city of Cincinnati would get from a controversial parking deal.
Emails obtained Thursday by WCPO Digital show why the request is being made: Some Port Authority leaders had serious misgivings about the deal before it was signed June 21.
Emails written by Port Authority Vice Chairwoman Lynn Marmer, who also is a vice president with the Kroger Co., called the lease "a gigantic distraction from our core mission."
Also, Marmer's email added, "The city lied to the public about the budget."
Neither Qualls nor any city staffer mentioned sharing any of the city's $92 million upfront payment to City Council before it voted on the deal in March. But under the latest plan being floated, the Port Authority would get a full one-third of the initial revenues.
Under the currently approved plan, the Port Authority would get an upfront payment of $319,125 and then about $300,000 each year of the 30-year deal.
When City Manager Milton Dohoney Jr. unveiled the parking lease proposal in late February, he said it was needed to avoid a deficit in the city's budget. Without the deal, the city would be forced to layoff hundreds of police and firefighters.
Also, Dohoney said the parking lease revenues were needed to quicken several development projects including the construction of an apartment building and grocery at Fourth and Race streets downtown; build an interchange at Martin Luther King Drive and Interstate 71; and add an ornate carousel at the new Smale Riverfront Park.
As the lease got delayed in a protracted legal battle, however, none of that occurred.
City Council was able to balance the budget in June without laying off police and firefighters. Meanwhile, the development projects continued without the lease revenue.
That didn't go unnoticed by Marmer. She was frank in a June 14 email sent to Port Authority CEO Laura Brunner and copied to Port Authority Chairman Tom Williams.
Referring to city administrators pressuring the Port Authority to quickly OK the lease, Marmer wrote, "The city lied to the public about the budget. I feel no obligation to live under their timetable or ‘expectations.'"
As Marmer's email makes clear, the Port Authority already was seeking more cash from the parking deal.
"From your assessment as I understand it, you have gotten changes in the lease," the email stated. "Not sure what they are but I would like to. And I would like to understand if those are lease changes what else could we get? And why can the changes you believe you got avoid going back through council but others will need council approval."
Also, Marmer was concerned the parking lease would divert the Port Authority from its primary mission, which is to promote economic development in Hamilton County and clean up and redevelop contaminated industrial sites.
"This whole parking issue has been a gigantic distraction from our core mission," Marmer wrote. "We need to be opportunistic but also focused and disciplined. And we need to build up better communication and decision-making processes and structure."
A week later, after the Port Authority had signed the lease, it was still busy making changes to the deal. Specifically, it wanted to alter terms with Xerox Corp., the contractor it planned to use to oversee Cincinnati's parking meters.
Williams, the Port Authority chairman who also is president of North American Properties, discussed the changes in a June 21 email to Brunner.
"I know we're not supposed to renegotiate any current agreements but, when Xerox asks you what they can do to help you, I think it's great that you could give them a direct and honest answer," Williams wrote.
In her emails, Marmer was concerned about the political implications of the parking lease. After Brunner mentions the Port Authority will get $27 million from the deal, Marmer is skeptical.
"As for the parking deal, Roxanne (Qualls) will promise anything," Marmer wrote June 14. "What she has the ability to deliver may be something different. Her words, according to you, about being able to compete for funding gives me no comfort. None. We could sign the lease and get nothing but the expense money. We will also incur a lot of political heat from a future Mayor Cranley. And others."
Qualls, who is among the lease's top supporters, is running for mayor against John Cranley, who is strongly opposed to the deal.
The Port Authority gets some of its operating budget from the city of Cincinnati.
Brunner's email mentioned how she wanted to allocate the $27 million.
It included targeting $12 million to redevelop the Swifton Commons site and surrounding area in Bond Hill; $10 million to help create an industrial park in Queensgate; and $5 million to use in land-banking properties in the Port Authority's "focus neighborhoods."
In her email to Brunner, Marmer expressed unease about how quickly the lease was being crafted.
"That is why I want a political discussion about whether we could or should open up the topic of changing the lease," Marmer wrote. "You told us clearly that approving the lease was just a first step and there would be other ways to alter things. That is the only reason why I agreed to the huge rush that was placed on agreeing to the concept of the lease."
The Port Authority signed a lease with Cincinnati June 21 to assume management of city-owned parking lots, garages and meters. It has 75 days to finalize the deal's details or back out, if it chooses.
Lease supporters said the deal will give the city much-needed cash to quicken several development projects that will help expand the city's tax base.
Opponents counter the lease would cause rate increases and aggressive enforcement that might drive away customers from small businesses.
City Council narrowly approved the lease in a 5-4 vote in March, just 15 days after it was proposed by Dohoney.
In today's dollars, the lease of city-owned parking meters, lots and garages to the Port Authority is estimated to have a value of $475 million.
Of that amount, Cincinnati would get $197.4 million or 41 percent of its current market value, according to a New York-based financial consultant hired by the city.