For a few moments, it looked like the city and Charlottesville Parking Center owner Mark Brown were going to be able to settle out of court their differences about the Water Street Parking Garage. That was before City Council authorized a resolution June 6 to make an offer to buy Brown’s spaces in the garage without his knowledge, and before Brown filed a petition for an emergency receivership the next day.
The petition cites the deadlock on the board of the Water Street Parking Garage Condominium Association, the entity that runs the garage. Its seats are evenly split between the city and CPC, and because of a dispute over parking rates, the association has not approved a budget. CPC’s contract to manage the garage expires June 30, and a receiver is needed, says the petition, “to make necessary decisions related to the future operation” of the garage.
Those decisions include making a budget and approving rates. With the current deadlock, claims the petition, the condo association can’t negotiate with CPC to run the garage or hire a new managing agent. And CPC fears the deadlock will keep the association from maintaining appropriate insurance on the garage.
“A receiver is a fiduciary position like a trustee or guardian,” says legal expert David Heilberg. The receiver reports to the court about the assets and property for an entity, he says.
“Obviously Brown must feel like his hands are tied because the city won’t settle,” says Heilberg. “The receiver will sort it out until this is resolved. He’s saying, ‘I don’t want the responsibility of handling a disputed property.’”
And Brown wants $450-an-hour attorney Brian Jackson, a partner at white-shoe firm McGuireWoods, to be the receiver, with the help of $100-an-hour legal assistants.
“That’s pretty pricey,” says Heilberg.
But that rate may not even touch what the city is paying for its attorney, Tom Wolf with LeClairRyan in Richmond, who allegedly is one of the most expensive lawyers in Virginia.
City Attorney Craig Brown says he has to ask Wolf whether he can reveal his hourly rate, and he did not immediately respond to a Freedom of Information Act request.
The city attorney says he hasn’t seen the petition: “I’m not in a position to comment.”
As for whether the receivership request means a failure of the the city and Mark Brown’s efforts to settle their respective lawsuits out of court, Craig Brown says, “We haven’t made our offer” to buy CPC’s share of the garage. “We’ll have to see where that goes.”
Mark Brown declined to comment. The petition will be heard court June 22.
Says Heilberg, “It sounds like a mess.”
Timeline of contention
August 12, 2014: Mark Brown buys Charlottesville Parking Center for $13.8 million.
October 15, 2015: CPC proposes new rates of $145 a month, $180 for reserved spaces and $2.50 an hour at the Water Street Garage.
October 28, 2015: The city counters with $125 and $140 for reserved spaces and an hourly rate of $2.
February 2, 2016: The city declines CPC’s offer to lease parking center spaces to the city, says it will consider a fair offer to sell its 629 spaces to CPC.
February 17: The city refuses CPC’s offer to pay $6,792 per space—nearly $4.3 million.
March 14: Brown sues the city, alleging he’s being forced to run the Water Street Garage at below market rate and below what the city-owned Market Street Garage charges. CPC v. Charlottesville
March 28: Brown announces he’s hired former mayor Dave Norris to be general manager of Charlottesville Parking Center.
April 4: Chris Engel, Charlottesville director of economic development, sends a letter to Brown questioning Norris’ qualifications to run the parking garage.
April 6: Brown notifies the Water Street Parking Garage Condo Association that it’s in default of its agreement with CPC by not having a 2016 budget and gives the city 30 days to come up with one. Fears that the garage will close May 6 begin to foment.
April 28: Mark Brown writes the city, urging them to work things out. brown letter to City Council 4-28-16
April 29: Charlottesville countersues CPC, claiming the city didn’t get its right of first refusal for Wells Fargo’s parking spaces that the bank sold to CPC. city counterclaim 4-29-16
May 25: Violet Crown hires PR firm Payne Ross, calls for petition urging city to hold onto its shares in the Water Street Garage.
June 6: City Council passes resolution authorizing the purchase of CPC’s spaces in the garage.
June 7: Brown petitions for an emergency receivership. brown petition receiver 6-7-16