CINCINNATI -- It wasn’t exactly a debate, but the two major candidates seeking to be Cincinnati’s next mayor shared a stage Friday morning to discuss the city’s controversial parking lease.
The joint appearance before a class offered by the Cincinnati Bar Association was the first time Vice Mayor Roxanne Qualls and ex-City Councilman John Cranley addressed a political issue together in public during this election cycle.
Qualls and Cranley, both Democrats, are running in Cincinnati’s non-partisan mayoral race. So far, local Republicans haven’t announced a candidate.
There also is a Libertarian and two independents running, but it’s likely that it will be Qualls and Cranley who emerge from the Sept. 10 primary to face each other in November’s election.
City Council approved a 30-year lease of the city’s parking meters, garages and lots by a 5-4 vote in March, just 15 days after it was first proposed.
Shortly thereafter, opponents persuaded a judge to block the deal and collected enough signatures to force a voter referendum in November. City officials are appealing the decision.
Qualls is one of the lease’s strongest supporters, while Cranley is adamantly opposed.
“We are fortunate today to have experts here to discuss the important, controversial and timely topic of parking,” said attorney Peter Koenig, when introducing the candidates.
“All of all speakers care deeply about our city and want to make it a better place to live, work and play,” Koenig added.
Qualls described the lease as fiscally prudent.
Not only would it help the city cover deficits for two years, she said, it also would provide $92 million in upfront money that could be invested in projects like building a downtown grocery store and speeding construction of the Interstate 71/Martin Luther King Drive interchange.
Under the deal, the city would lease its parking system to the Port Authority. In return, the Port would use three private companies to operate it; those companies would make improvements, like installing parking meters that can be accessed via smartphone.
The Port Authority would issue $127.6 million in tax-exempt bonds to finance the deal. Bonds would be issued by New York-based Guggenheim Partners, which could write off part of the expense as a tax break.
“We’re using other people’s money to improve our parking asset...and the city maintains control of the asset,” Qualls told the crowd.
Also, the city would get annual payments throughout the lease’s term. The payments would begin at $3 million, and could increase to $20 million by the deal’s end.
Qualls emphasized the city and Port Authority retain most of the power over setting rates. The schedule has downtown meter rates increasing to $2.25 per hour in 2016, $3 in 2026, and $4 by 2036.
But Cranley said lease supporters rushed the deal in “a deeply undemocratic process.”
“We’re spending it all upfront at the expense of future generations,” Cranley said. “It’s all spent in two years. They have no plan (on dealing with deficits) for Year 3.”
Further, Cranley questioned some of the deal’s financial assumptions.
He noted the city currently gets $7.3 million in revenue annually from parking meters and tickets. It costs about $2 million per year to operate the system, meaning it nets about $5 million.
But the lease guarantees a fee of $6 million per year to one of the private companies by its third year; that amount rises to $9 million by the 10th year. In all, the private firm would get about $330 million over 30 years.
“This is a travesty,” Cranley said. “It was snuck into the budget because they don’t want to make any tough decisions on the budget.”
In today’s dollars, the lease is estimated to have a value of $475 million.
A New York-based financial consultant hired by the city said the city would get $197.4 million – or 41 percent of its current market value. City officials said the amount is closer to $220 million, due to improvements that would be made.
Over the lease’s term, it would require about $210 million in debt payments – or $116 million in today’s dollars.
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