Plan to lease L.A. parking garages crumbles

Los Angeles Mayor Antonio Villaraigosa’s plan for shoring up the city’s budget by leasing out nine public parking garages collapsed on Friday, with the city’s top budget official reporting that no one was willing to submit a bid.

None of the 12 companies that have been in talks with the city for the last year were interested in the proposed concession agreement, which was supposed to generate $53 million for the city’s general fund budget in the middle of a deep financial crisis, City Administrative Officer Miguel Santana said.

The City Council redesigned the proposed parking concession agreement last month after its members received a barrage of complaints from business leaders in Hollywood, Westwood and elsewhere. Those changes, which were designed to keep parking rates from spiking dramatically, also made the deal unpalatable to potential bidders, said Councilman Bernard C. Parks.

“The more restrictions we put on it, the less money was available,” said Parks, who opposed the deal from the beginning on the grounds that it was “fraught with problems.”


The news eliminates the last flicker of hope that the city will secure an influx of parking revenue in time to erase a $54-million shortfall. And it leaves Villaraigosa and the council with a dwindling number of options for closing that budget hole eight months into the fiscal year.

In a report issued Friday, Santana said the council should either change the terms of its proposed parking concession agreement to make it more appealing to potential bidders or abandon the idea altogether. Either way, the parking deal is off the table as a solution to the problems of the current budget year, he said.

Instead, a more sweeping budget reduction strategy is expected from Villaraigosa in March, one that would erase at least $100 million in expenses. That plan would likely involve new cuts to the workforce, Santana said.

Villaraigosa spokeswoman Sarah Hamilton said the mayor was reviewing Santana’s report Friday. He still wants to complete a parking garage deal before June 30, Hamilton said.

City officials had hoped the parking deal would generate between $200 million and $300 million, enough to wipe out the debt on the various garages and still provide some money for basic services, such as public safety and parks.

Santana warned last month that the plan was in jeopardy and said any changes to keep parking rates low could kill the deal. He recommended that the council pursue other strategies for cutting expenses, including 10 additional furlough days for certain employees.

The council killed that idea. Santana then came back and proposed five furlough days. The council took a pass on that as well. Although council members did approve $33.7 million in other cuts, they rejected key proposals, including a 50% reduction in graffiti removal contracts..

The mayor has proposed using parking spaces to raise money in each of the last three budget years, Parks said. The latest plan was expected to cover more than 8,000 spaces — three-fifths of them in Hollywood — and last for 50 years.


Santana said taxpayers have been subsidizing parking rates in a variety of city-owned garages. In his report, he restated his support for the idea of hiring a private parking garage operator, saying the city’s current arrangement is “broken.”

Opponents of the concept contend that such a move amounts to a sale of the city’s assets in a down economy. They also argued that the proceeds would buy the city’s elected officials only a few months of budget relief before more cuts would be needed.

Councilwoman Jan Perry said it is time for the city to drop the parking plan permanently. “We’ve wasted a lot of time on it, and we haven’t been able to achieve any of our objectives,” she said.