City looking to sell Love Park garage

**BarryG** · 08-28-2012, 08:54 PM

Originally Posted by CATHERINE LUCEY, Daily News

The Nutter administration has put out a request for proposals seeking a broker to oversee the potential sale of the 810-space parking garage beneath the iconic LOVE Park....

Mayoral spokesman Mark McDonald stressed that the city wanted a "responsible buyer" who would seek to update the aging garage in conjunction with planned renovations of LOVE Park, at 15th Street and JFK Boulevard....

...under Street it was speculated that the garage could sell for $35 million to $40 million. Proposals are due by Sept. 21, and the city is looking for the broker to start Nov. 1.

Link: City looks to sell garage under LOVE Park

**five apples** · 08-28-2012, 09:47 PM

Originally Posted by BarryG

Link: City looks to sell garage under LOVE Park

Kudos to Nutter for doing this and for looking at selling anything else.

McDonald said the proceeds would go to onetime expenses like paying off debt, shoring up the cash-strapped pension fund or investing in aging infrastructure.

Good use of the cash too. Especially paying down debt and shoring up the pension fund. If the PGW sale is for real and not just a way to get city connected law firms some cash, than that is a great move too.

**phillyaggie** · 08-28-2012, 09:57 PM

Originally Posted by five apples

If the PGW sale is for real and not just a way to get city connected law firms some cash, than that is a great move too.

you don't think this RFP for a broker is also a way to shovel some tax money into private coffers? Can't the city's property office and law office sort out a sale directly?

All this might do is get the contract for the broker signed and money delivered, and that will take enough time to get some public sector unions riled up about the city selling its crown jewels or some such bs, and lo and behold the sale idea will be scrapped.

**thoth** · 08-28-2012, 10:20 PM

Well what is the financial benefit from this if the city pulls in $1.2mil a year? I get that philosophically you could argue that the city shouldn't be running parking lots, but aren't they just torpedoing 1.2mil in revenue?

Does the city store vehicles here?

**Dayman** · 08-28-2012, 10:21 PM

Originally Posted by thoth

Does the city store vehicles here?

I believe it does.

**BarryG** · 08-28-2012, 10:23 PM

Originally Posted by thoth

Well what is the financial benefit from this if the city pulls in $1.2mil a year? I get that philosophically you could argue that the city shouldn't be running parking lots, but aren't they just torpedoing 1.2mil in revenue?

Does the city store vehicles here?

If it can really sell for $40 M, it probably does make sense to sell to pay down debt or pension obligations now. It would take 30+ years to make that up at the current rate, we don't really have that much time.

**mixiboi** · 08-28-2012, 10:44 PM

And don't forget the cost of repairs that comes with being under the fountain...

**thoth** · 08-28-2012, 10:51 PM

Originally Posted by BarryG

If it can really sell for $40 M, it probably does make sense to sell to pay down debt or pension obligations now. It would take 30+ years to make that up at the current rate, we don't really have that much time.

Selling off a money making asset to pay off .1% of the cities pension obligation may not be the best strategy, particularly if the city is going to end up paying someone else to park part of its fleet.

**five apples** · 08-28-2012, 10:55 PM

Originally Posted by BarryG

If it can really sell for $40 M, it probably does make sense to sell to pay down debt or pension obligations now. It would take 30+ years to make that up at the current rate, we don't really have that much time.

I also hope this means trimming the payroll and though that might sound harsh, the city needs to trim its future pension obligations. Paying down debt would be good. Paying down 40 million would should also result in less payment on the debt as well. So the net could be good. The city should really only own things that are essential to running the city, and a garage and public utility are not those things. Also, is the 1.2 million net or gross?

**phillyaggie** · 08-28-2012, 11:03 PM

also, do they need 810-space parking garage to park all the city cars?! isn't it a public garage too-- that's where the revenue is coming from.

so sell the garage except for a few spaces used for a few city hall vehicles...sell the rest.

**BarryG** · 08-28-2012, 11:13 PM

Originally Posted by five apples

I also hope this means trimming the payroll and though that might sound harsh, the city needs to trim its future pension obligations. Paying down debt would be good. Paying down 40 million would should also result in less payment on the debt as well. So the net could be good. The city should really only own things that are essential to running the city, and a garage and public utility are not those things. Also, is the 1.2 million net or gross?

It is net... the lot is run by the PPA. Actually earlier this year someone in City Hall remembered that PPA never paid the city their cut for the past several years. Lulz.

Originally Posted by Samantha Melamed, City Paper

Fiscal 2012 saw a couple of one-time revenue bumps. Among them: $11 million, paid from the Philadelphia Parking Authority. The money was revenue from the Love Park parking garage that was supposed to have come to the city over several years, but that the Philly Parking Authority...hadn't bothered to pay.

Link: http://www.citypaper.net/blogs/naked...ed-by-PPA.html

**raider.adam** · 08-29-2012, 01:00 AM

Originally Posted by phillyaggie

you don't think this RFP for a broker is also a way to shovel some tax money into private coffers? Can't the city's property office and law office sort out a sale directly?

I doubt it.

Originally Posted by thoth

Selling off a money making asset to pay off .1% of the cities pension obligation may not be the best strategy, particularly if the city is going to end up paying someone else to park part of its fleet.

And that 1.2 million makes up .00033% of the budget.

**eldondre** · 08-29-2012, 08:46 AM

Originally Posted by thoth

Selling off a money making asset to pay off .1% of the cities pension obligation may not be the best strategy, particularly if the city is going to end up paying someone else to park part of its fleet.

so where else are you going to get $40 million?

**BarryG** · 08-29-2012, 08:53 AM

Thoth has a point, it might make more sense to put the $40M towards an infrastructure project the city has been putting off. Or if it were me, a trust fund for the park system.

**eldondre** · 08-29-2012, 08:59 AM

Originally Posted by BarryG

Thoth has a point, it might make more sense to put the $40M towards an infrastructure project the city has been putting off. Or if it were me, a trust fund for the park system.

don't get me wrong, I wouldn't mind seeing them simply put the money into making the city owned broad st line ADA accessible but debt reduction might be the only thing council can agree on and the return is predictable. anyway you slice it, imo, selling off a parking garage is a good move. I'd also like to see them issue an RFP for street meters instead of guaranteeing the contract to the PPA

**BarryG** · 08-29-2012, 09:05 AM

Originally Posted by eldondre

don't get me wrong, I wouldn't mind seeing them simply put the money into making the city owned broad st line ADA accessible but debt reduction might be the only thing council can agree on and the return is predictable. anyway you slice it, imo, selling off a parking garage is a good move. I'd also like to see them issue an RFP for street meters instead of guaranteeing the contract to the PPA

Pensions aside, what is the city's debt right now?

**eldondre** · 08-29-2012, 10:20 AM

Originally Posted by BarryG

Pensions aside, what is the city's debt right now?

here's a thread from a couple years back, in fact some of the posts are five or six years old, culled from phillyblog before its demise
http://www.philadelphiaspeaks.com/fo...-us-again.html
references to the city being near it's debt limit
according to
http://www.phila.gov/pdfs/Mayors_Ope...ief_FY2013.pdf
debt service was $398 million in FY11, estimated to be $421 millon in FY12, and budgeted at $441 million in FY13
I don't know what the city's total debt is though I'm sure it's out there somewhere

**thoth** · 08-29-2012, 10:33 AM

Originally Posted by eldondre

so where else are you going to get $40 million?

Where are we going to get it next year when the city spends this 40million dollars in 5 seconds? You're throwing money into an unquenchable fire, i.e. the city's out of control pension and benefit growth. They could sell off all the assets they had and the obligation would continue to grow. You show me a plan to wisely invest 40mil, to grow that money into a sustainable fund, such as BarryG's park trust plan and maybe I could see the point. But I just don't know if I see the logic in cannibalizing moneymaking assets to feed a wildfire.

**eldondre** · 08-29-2012, 10:52 AM

Originally Posted by thoth

Where are we going to get it next year when the city spends this 40million dollars in 5 seconds? You're throwing money into an unquenchable fire, i.e. the city's out of control pension and benefit growth. They could sell off all the assets they had and the obligation would continue to grow. You show me a plan to wisely invest 40mil, to grow that money into a sustainable fund, such as BarryG's park trust plan and maybe I could see the point. But I just don't know if I see the logic in cannibalizing moneymaking assets to feed a wildfire.

you're right, we should do nothing about our pension, benefit, and debt service.
I don't know that I see the logic in the city owning parking garages which it poorly maintains. the city is struggling to fund basic services and $40 million could help alleviate debt service while getting an underutilized asset off its balance sheet...and help give it some borrowing flexibility in the future should it need it.

**phillyaggie** · 08-29-2012, 10:55 AM

The ROI is simply too low for this "moneymaking machine". And a good time to sell off assets is when they're still making some money-- you might actually get some buyers and a good price. Otherwise you're left holding the bag (and accruing debt, costs, labor, pensions, etc.)....just look at bloated nature of other "assets" the city owns. This garage needs expensive repairs and maintenance-- something the city wisely seems to think it doesn't want to take on.