Consultant: Long-term lease of Wilkes-Barre parking assets unattractive to investors

By Jerry Lynott - [email protected]
The Park & Lock East on East Market and North Washington streets in Wilkes-Barre was among the garages Desman Design Management looked at in its study of a long-term lease of city parking assets. Sean McKeag file photo| Times Leader - Times Leader file

WILKES-BARRE — The consultant hired to look into the possibility of the city entering into a long-term lease of its parking assets said the meters, off-street lots and garages did not generate enough income to attract an outside investor.

The city Tuesday provided a copy of the 20-page report produced by Desman Design Management, the Chicago-based consultant hired by council in January for $45,000 to determine if such a deal would help stabilize Wilkes-Barre’s finances.

Desman’s analysis took into account 3,360 parking spaces, revenues, expenses and projected revenues in a 30-year deal and concluded, “as a whole, the parking assets of the City of Wilkes-Barre would not generate significant value to an outside investor in a long-term Concession-Lease transaction.”

City Administrator Ted Wampole said the report is still being reviewed and a decision hasn’t been made on any next steps.

“The bottom line is I think it’s pretty clear they’re saying there’s not a lot of value in the parkades,” Wampole said.

The report showed there is value in the meters and the enforcement of them, Wampole said, and both of those are controlled by the city.

The report was also provided to Tom Torbik, executive director of the Wilkes-Barre Parking Authority. That agency contributed $20,000 for the analysis.

Torbik said a similar study done by Desman in 2012 came to the same conclusion. If it was bad for an outside investor six years ago, it hasn’t gotten any better, especially since revenues have decreased, he said.

Among the recommendations to improve the performance of the parking system was “consolidating the operations, enforcement and maintenance responsibilities for all of the City’s/Authority’s parking assets under one entity,” a point that resonated with Torbik.

“I personally think that’s a good idea,” he said.

Whether the entity is the city or the authority should be discussed in the meeting Torbik said he wants to have with the administration of Mayor Tony George.

The authority oversees the operation of two of its own garages, Park & Lock North on North Main Street and Park & Lock Central on South Main Street; one city garage, Park & Lock East at East Market and North Washington streets; and the off-street lot on West Northampton Street across from the YMCA. The city also owns 837 metered spaces, the former Hotel Sterling lot at South River and West Market streets, and the James F. Conahan Intermodal Transportation facility on South Washington.

Desman’s comparison of on-street to off-street parking showed the the meters consistently generated a profit: $301,008 in 2014, $618,698 in 2015, $490,178 in 2016, $501,698 in 2017 and a projected profit of $604,979 this year.

On the other hand, the lots and garages were up and down during the same five-year period, recording losses of $542,884 in 2014 and $82,289 in 2016 and profits of $39, 464 in 2015, $44,065 in 2017 and a projected profit of $161,487 this year.

The off-street assets carried a larger expense load and the maintenance and repair of the garages over the 30-year term of the lease cut deeply into their profitability, Desman noted.

In addition, other factors affected annual revenues. The city and authority negotiated long-term agreements to provide parking for employees in downtown offices. The city sold the former Hotel Sterling lot to a developer. And in 2019, the Park & Lock East will lose approximately $170,000 in annual revenue when 200 Geisinger employees move to another building outside the city.

Last month, the city attempted to sell Park & Lock East for $2 million to Washington & Market Street Properties LLC, a private company set up by the owners of an office building adjacent to the facility. But city council would not support the deal to sell the garage that was making an annual profit.

At the time, Desman supported the proposed sale. But it noted the number of public parking spots could decrease and the Parking Authority might not be able to make its annual $150,000 contribution to the city.

Torbik opposed the sale of the garage then and still is against it.

“It’s a short-term gain, but a long-term loss,” Torbik said.

The Park & Lock East on East Market and North Washington streets in Wilkes-Barre was among the garages Desman Design Management looked at in its study of a long-term lease of city parking assets. Sean McKeag file photo| Times Leader
https://www.timesleader.com/wp-content/uploads/2018/06/web1_ParkingGarage-2.jpgThe Park & Lock East on East Market and North Washington streets in Wilkes-Barre was among the garages Desman Design Management looked at in its study of a long-term lease of city parking assets. Sean McKeag file photo| Times LeaderTimes Leader file

By Jerry Lynott

[email protected]

Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.

Reach Jerry Lynott at 570-991-6120 or on Twitter @TLJerryLynott.