Cincinnati Approves Parking Privatization, But Judge Halts It

CHICAGO -- The Cincinnati City Council Wednesday approved a controversial long-term lease of its parking system to plug a budget shortfall -- but a judge almost immediately issued a temporary restraining order stopping the city from implementing the deal. 

Hamilton County Common Pleas Judge Robert Winkler issued an injunction Wednesday that had been requested earlier by opponents to the lease, who are calling for a voter referendum on the proposal.

By Thursday morning, a federal court had reportedly taken over the matter after Cincinnati officials successfully requested that the case by heard by a U.S. District Court. A hearing date has not yet been set.

Cincinnati joins a growing group of cities and universities to consider privatizing parking systems for cash. In the Midwest, Indianapolis, Chicago, and the Ohio State University have closed deals. Indiana University is considering the option.

Cincinnati Mayor Mark Mallory has been pushing for the $197 million lease deal for months. His administration says the cash is needed to offset budget shortfalls that could lead to police and fire layoffs.

The city was hoping to get the money by the end of June, according to a local report.

The proposal calls for the city to lease its system to the Port of Greater Cincinnati Development Authority, which would team up with a group of private firms to operate the asset.

The city plans to lease its meters to the authority for 30 years and its garages for 50 years.

If the proposal goes forward, the port authority would sell up to $92 million of bonds to finance a one-time up front payment to the city for the asset.

It would sell another roughly $105 million of notes over the life of the deal to finance annual payments to the city.

Guggenheim Securities LLC would be the underwriter on the deal.

Officials from the city and the port authority did not return phone calls by publication time.

Xerox, which also runs Indianapolis’ newly privatized parking system, would operate the meters for the authority.

Like Indianapolis, Cincinnati touted how its parking deal would differ from Chicago’s deeply unpopular 75-year lease.

City Manager Milton Dohoney’s presentation to the city council in February featured a “This is NOT Chicago” slide that highlighted the differences between the two leases.

Chief among the differences: Cincinnati will retain control over all rates, hours, and enforcement.

Regular rate increases are built into the agreement and rates can be increased over that if unanimously approved by an advisory committee.

Of the $92 million cash payment, the city plans to deposit $53 million into its general fund and $39 million into a fund for various capital projects. It would use $6.3 million to add to the city’s reserve account.

The city would also get annual payments that are estimated at $3 million initially and rising over time, based on a 50% share of net income after debt service.

The authority would also invest up to $98 million over the life of the deal in capital upgrades to the parking system, according to the mayor’s office.

Cincinnati issued an request for proposals last October for interested private partners. It received nine responses, including from the port authority and a consortium called ParkCincy Team that includes Guggenheim, Xerox and the rest of the firms on the deal.

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