Under Whose Authority?
The Spokane Parking Public Development Authority should not be dissolved nor should the City Council submit the question of its dissolution to its electorate.
The authority was created in 1988 to administer federal grants, improve government services and living conditions, perform community services, promote historic preservation and allow broader community participation in projects and activities than city government structure would permit. The authority’s initial board was composed of citizens to depoliticize decision-making. The role of the authority, and the need for its existence, has not changed.
Although created to assist with redevelopment in the Davenport Hotel area, the authority is a participant in the River Park Square parking garage expansion. It’s the current operator of the garage and has obligations to make garage lease payments, ground rent payments and to pay operating costs.
The city has agreed to loan its parking meter money to the authority in the event garage revenues are insufficient to pay ground rent payments and operating costs. Prior to undertaking that obligation, the city reviewed and relied upon a parking feasibility study prepared by a nationally recognized consultant. The revenue projections in that study haven’t been met; revenues are insufficient to pay the expenses of the authority. However, the solution is not to dissolve the authority, but for the city to work with the authority and others to resolve the revenue problem.
Dissolution of the authority would not only frustrate community participation in municipal projects, but would result in increased costs to everyone.
Taxpayers, ratepayers and bondholders would be penalized if the authority is dissolved. Both Standard & Poor’s and Moody’s have lowered the city’s credit ratings, which will result in higher borrowing costs to the city. Those costs will result in higher taxes, water rates, sewer rates and special assessments.
The city’s action to set a public hearing to consider the dissolution of the authority has been perceived as action to avoid a financial commitment and already has resulted in another lawsuit against the city, which will cost the taxpayers money. If the authority is dissolved, there would be more lawsuits against the city by the foundation, the garage developers, bondholders and possibly federal regulators, and potential further ratings downgrades.
It’s been stated the authority is bankrupt and never will be able to pay its expenses. Under our legal system, we have a legal process to determine insolvency and to extinguish debts. That process has not been followed. It is inappropriate for anyone to “take the law into their own hands” to achieve a particular result. If people believe the authority to be bankrupt, legal process should be followed and our judicial system should make that determination. No one should be above the law.
Rather than dissolving the authority, efforts should be directed to solving the revenue issues pertaining to the garage. The authority recently commissioned its own parking feasibility study. That study contained both a “more optimistic” and a “less optimistic” revenue projection. Under the “more optimistic” scenario, the revenues of the garage would be sufficient to pay garage lease payments and over 50 percent of the ground rent payments.
Garage revenues currently exceed that projection. That study also contains numerous recommendations to improve garage revenues. It is time for all segments of the community to work collaboratively to solve the garage dispute. Spokane is a wonderful place to live and raise a family. Both city and community leaders should step forward to provide thoughtful solutions to the garage issues.
If the City believes that it was misled into entering into its commitment to loan parking meter revenues to the authority, it should not dissolve the authority but should pursue all of its available legal remedies.
Roy Koegen is a partner in the Spokane law office of Perkins Cole and has served as the city’s bond counsel since 1978.