A judge heard Charlottesville Parking Center’s emergency petition to appoint a receiver to run the Water Street Garage June 27, three days before the parking center’s contract with the city expired, and he concluded such a move wasn’t justified.
“This is an emergency of your own making,” said Judge Rick Moore in Charlottesville Circuit Court. “I don’t think there’s a compelling need for the court to intervene.”
The Water Street Parking Garage Condominium Association, the organization that owns the garage, has been deadlocked since late last year when its board, with four seats controlled by the city and four by the Mark Brown-owned CPC, was unable to approve a budget with the higher rates desired by Brown, and has operated without a budget since December 31.
CPC’s own agreement to manage the Water Street Garage expires June 30. “We are standing at the precipice of July 1,” said CPC attorney Christopher Malone.
The city, represented by Richmond attorney Tom Wolf, said the garage had been operating just fine the past six months, the city had okayed expenses, and there was no emergency and no evidence of irreparable harm.
Wolf said the Water Street Parking Garage Condominium Association’s articles of incorporation say owners do “not contemplate pecuniary gain or profit to the members.” Brown testified the city earned $596,000 in profit last year from the garage.
“We’re not saying there’s no profit,” said Wolf. “We’re saying the purpose is not to maximize profit.”
Brown testified he did not accept a city offer to implement the rate increase he wanted over years, instead of in 2016. “It was not acceptable,” said Brown, who has filed suit against the city contending he’s being forced to operate parking at below-market rates.
According to Wolf, Brown’s lawsuit is based on the “bogus theory” the city and CPC were involved in a joint venture and the city was breaching its fiduciary duty by not trying to maximize profits from the garage.
And while Brown, as a condo owner, has a fiduciary responsibility to keep the garage open, said Wolf, there were plenty of other companies that could manage the garage. “It’s not rocket science to run a garage,” he said. Ironically, the city earlier had challenged former mayor Dave Norris’ qualifications to become the parking center’s general manager.
The hearing came after the Downtown Business Association of Charlottesville sent a letter June 23 asking the city and Brown to knock off the “extreme threats” like eminent domain and closing the garage.
The next day, Norris sent a letter to the city offering a resolution in which the city could set whatever parking rates it wished—as long as it compensated CPC for lost revenues resulting from rates “lower than what the market would reasonably bear.”
City Councilor Bob Fenwick said that’s an offer the city has seen before. “That was old news repackaged,” he said after the hearing.
Also present at the latest parking wars skirmish were Susan Payne and Joan Fenwick, who rallied downtown businesses to petition City Council to not sell its shares in the garage to Brown.
Up until a June 2 meeting hosted by the Downtown Business Association of Charlottesville at Violet Crown with 60 riled attendees, Norris says he thought the city and CPC were on the verge of a settlement. “Mark and CPC agreed to all of the conditions the city set forth,” including maintaining the validation system, honoring the monthly parking contracts in place and maintaining his ownership in the garage until the ground lease expires in 2024, says Norris.
The city offered to sell its 629 spaces in the garage for $10 million. CPC offered the appraised value of around $4 million plus a 20 percent premium, says Norris.
According to Norris, Mayor Mike Signer asked Brown to not send representation to the meeting. “He specifically asked Mark Brown to pull me from the meeting,” says Norris. He didn’t go, he says, “as a good-faith gesture because we believed the basic terms had been reached,” a decision he now calls a mistake.
Signer referred a request for comment to the city’s attorney. Wolf said he was not at that meeting.
Wolf also disputes that they were near a settlement. “Absolutely not the case,” he says. “There was absolutely no indication that we think this is a good offer we were inclined to take.” Had Brown offered the $10 million the city wanted, “that would have been a good offer,” says the attorney.
Instead, a “spooked” City Council voted June 6 to offer to buy out Brown’s spaces in the garage, a surprise move to CPC, according to Norris. “Basically it’s a story of how the city snatched defeat from the jaws of victory.”
Along with a June 8 offer to buy CPC’s share was a threat that if CPC didn’t sell, the city would begin eminent domain proceedings.
In a phone call June 24, Wolf backed off that. “The city has not irrevocably committed to eminent domain,” he says. “All we said is we were going to take the first steps.”
Fenton says she thinks eminent domain is a reasonable solution “once Mark Brown said he was going to shut down the garage.”
However, not everyone supports what Norris calls the “nuclear option” to settle the parking rate dispute. Says Charlottesville Regional Chamber of Commerce President Timothy Hulbert, “Eminent domain is a hammer that isn’t necessary.”
The next round in the ongoing saga is June 30, when the deadlocked Water Street condo association meets to make a plan to run the garage. Stay tuned.