Arena: Sacramento looking for “partner” in parking deal
Updated: 10:20 am
The effort to build a new downtown arena took a small, but important step forward last night. The Sacramento City Council unanimously approved the list of firms bidding for the rights to the city’s parking assets.
Fran Halbakken, downtown Railyards project manager at the City Manager’s Office, outlined the request for qualifications process in a presentation before the council’s vote. She noted that Sacramento has never embarked on a transaction like this before. So in due diligence, city staff conducted research and looked at cities that have monetized their parking assets in the past. They explored both success stories and failures.
Their findings, according to Halbakken, concluded that Sacramento should privatize their parking using the following guidelines:
- Find a firm that will be a partner, not just an operator.
- Be transparent and open about the process. Let stakeholders have their say. (Stakeholders, in this case, are the citizens of Sacramento and its greater region.)
- There is no “one size fits all” approach. Sacramento gets to dictate the terms of a deal with any potential parking partner. The city must shape any agreement to meet their needs.
- Create incentives for both the city and parking partner. An example would be agreeing to revenue sharing of generated profits.
- Select a team that is committed long-term to managing parking properly.
- Ensure that customers/users get “added value” when rates are adjusted.
- Use proceeds to fund capital projects rather than a return on investment.
Sacramento received inquiries from 13 companies interested in the city’s parking assets. City staff narrowed that list to 10, judging them based on the criteria below:
- Financial strength of the team.
- Sources of capital.
- Ability to make an upfront payment.
- Strength and experience of the parking operator.
- Prior municipal experience managing parking program (i.e. how will they enforce rules and regulations).
- The likelihood of being the long-term steward of those assets.
- Ability to implement new technology improvement in parking areas.
- Provide value to city customers with creative ideas.
Before voting unanimously to move forward, council added an 11th team to list of qualified companies – a local firm called Revitalizing Sacramento.
- A non-binding term sheet or outline for the finance, design and construction of the arena.
- A plan to backfill Sacramento’s general fund from lost parking revenue.
- A budget to pay for lawyers/consultants to help with the parking lease negotiations.
“This has been a long road to get to where we are,” said Mayor Kevin Johnson following the conclusion of public comment. “And the 28th of February has the possibility of being (historic) for a lot of reasons. And I want to say to the folks that have the questions and those who are on the opposition of this particular issue, we are going to do our best to address all those questions on when this comes before you on February 28th.”