Tag: water street garage

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5-star offensive: Council okays incentives for Dewberry Hotel

John Dewberry told City Council Charlottesville will reap benefits far exceeding the incentives from having a five-star hotel on its Downtown Mall. Photo Eze Amos

City Council approved 4-1 a financial assistance package estimated at $1.1 million over 10 years to assist John Dewberry in finishing the derelict hotel that’s loomed over downtown Charlottesville for the past eight years.

The folksy owner of the Landmark Hotel appeared before the council dais March 6. “I’m not used to people seeing my backside in a crowd,” said Dewberry, a former Georgia Tech quarterback, who noted he was born in Waynesboro.

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John Dewberry waits for his moment to pitch City Council—about two hours into the meeting. Eze Amos

Dewberry apologized for the delay in movement on the Landmark, which he bought in 2012, and blamed the length of time it took to finish the Dewberry Hotel in Charleston. He promised Charlottesville, too, would have a deluxe hotel, but cautioned, “You can’t do five-star without some help.”

The help he wants from the city for the 110-room, $50 million hotel includes tax breaks on the increased real estate assessments that likely will occur once the project is completed. The city agreed to give Dewberry a 50 percent tax discount on the increased value of the building above its current $6.6 million assessment.

Dewberry also needs parking—75 spaces in the Water Street Garage, which currently has a waiting list for monthly spaces and is involved in litigation between its owners, the city and Mark Brown’s Charlottesville Parking Center.

According to the deal City Council approved, Dewberry will pay at least $40,000 for the first year, paying the city 25 percent of the revenue he generates and keeping 75 percent. Dewberry wants the spaces to be on the garage’s upper deck, and plans to “grow the pie” by cramming even more vehicles into the 75 spaces with valet parking.

Brown, who is suing the city, would only say about the incentives, “It’s certainly an interesting strategy on their part.”

Kristin Szakos was the nay vote against the incentive package. “I’m eager to see the project finished and I’m not against the project,” she says. “I couldn’t quite see the cost-benefit analysis working. It didn’t quite rise to the level of something that the city should invest taxpayer funds in.”

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Kristin Szakos, center, cast the only vote against the city subsidizing John Dewberry’s hotel. Eze Amos

Vice-Mayor Wes Bellamy also asked why the city should give a tax break to a “multi-millionaire” when it hasn’t to other projects.

A five-star hotel is more labor intensive and capital intensive, answered Dewberry, who pointed out that two-star hotels don’t have doormen or valets waiting to park cars.

Bellamy also asked about how the low-income jobs will benefit the city. Dewberry said that while he may not make a huge profit on his five-star restaurant, the people working there “get tipped well.”

Councilor Bob Fenwick was concerned about the structural integrity of the building, which Dewberry said he’d had checked out by a friend who has a Ph.D. in engineering.

Mayor Mike Signer, who campaigned on getting the Landmark finished, said, “People are furious about this situation.” He told Dewberry he appreciated his “note of contrition,” and said he believes the negotiated assistance will be a good deal for the city in the long term.

About that point, Dewberry returned to the dais and asked if the city was being “rude” to him. “Will you spell my name right?” he asked. On-screen, where the meeting was being broadcast, he was identified as “Dewbury.”

Councilor Kathy Galvin wanted a bond to assure Dewberry completes the project and doesn’t let it sit unfinished another 10 years. He said that would be too expensive, but agreed to sell the property if he doesn’t have a certificate of occupancy by 2021. “It’s critical this project move forward,” she said.

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Hell no: City responds to parking center proposals

Mark Brown says he’s not angry the city rebuffed scenarios to settle the Water Street Garage litigation, but he is selling the Main Street Arena and looking for more hospitable municipalities. Photo Jackson Smith

In the ongoing melodrama between the city and Charlottesville Parking Center owner Mark Brown, a letter from City Manager Maurice Jones says there’s no way the city will sell its Water Street Parking Garage shares to or even work with Brown, who, perhaps not coincidentally, announced plans to sell the Main Street Arena and take at least part of his investments elsewhere.

The latest barrage was in response to an August 8 letter from CPC general manager Dave Norris outlining three scenarios in which CPC would sell its parking spaces in the garage to the city or vice versa, complete with an optimistic plan that CPC would build a parking garage on a Market Street lot jointly owned by the city and county to appease the county, which has threatened to take its general district court out of the city because of the dismal parking situation.

Jones writes that former mayor Norris’ statements that the scenarios represent an opportunity to end the dispute “quickly” and “in the city’s favor” represent a “fundamental misunderstanding” of the city’s position.

He scoffs at the idea that the city would buy Brown’s interest in the Water Street Garage, which includes 390 spaces, the land underneath and commercial spaces, for $8,995,400, the amount CPC contends the city would have to pay if it goes through with its eminent domain threat. Brown bought CPC, including a surface lot across from the garage, for $13.8 million in 2013.

A major sticking point for the city is that while Brown offers to sell his spaces for $18,232 each, his offer to buy the city’s 629 spaces was at a much lower $7,822 each. “That huge discrepancy suggests that CPC either has no interest in seriously negotiating the sale” of its garage spaces or that it “continues to mistakenly believe” the fair market value of its spaces is far greater than the city’s because it owns the land upon which the Water Street Garage sits.

That, says Jones, is like the city arguing its spaces are more valuable because they’re exempt from real estate taxes. Neither “advantage” would be passed on to a purchaser, he says.

And in case there’s any doubt about the city’s position, using both bold text and underlining, Jones says, “City Council has no interest in selling its spaces in the WSPG to CPC.”

As for working together to build a garage on Seventh and Market streets after Brown’s attempts to force the city to sell its Water Street shares, says Jones, “I can unequivocally respond that no one on City Council can imagine any scenario where this type of partnership would be of interest to the city.”

On page three of the four-page letter, Jones lists Brown’s, er, CPC’s misdeeds, including suing the city, secretly negotiating with Albemarle to build a garage on Market Street, allowing downtown businesses to believe he was contemplating closing the garage because the association that runs it had not approved a budget and filing a second lawsuit seeking the emergency appointment of a receiver.

Norris declined to comment on the city’s letter, but Brown had something to say about it: “It seemed like the ramblings of a lunatic. Maurice Jones didn’t write a word of that.” Brown says he believes Mayor Mike Signer and the city’s Richmond attorney, Tom Wolf, wrote the letter.

“Not true,” says Wolf. He also downplays the tone of the letter. “I think it’s just responding to their letter. I don’t think it’s a go-to-hell letter.”

In a September 14 statement, Wolf says, “I would think that after a while people would get tired of Mark Brown’s constant whining and his relentless efforts to twist everything to benefit himself at the expense of others.”

Jones’ letter says, “This dispute is not, however, about parking rates and never has been,” and alleges that Brown’s scheme all along has been to force the city to sell its interest in the garage to him.

“That was an outright lie,” declares Brown. He contends the only time CPC ever made an offer was when the city requested one in writing.

As for an amicable settlement of the increasingly hostile dispute, says legal expert Dave Heilberg, “As of today it doesn’t look like it. It’s hard to tell how much [of the city’s letter] is posturing.”

Heilberg calls such communications in civil litigation “nastygrams.” And if the parties really want to settle, he says, “They’ll come in with offers a lot closer.”

City Attorney Craig Brown says, “Yes, there is a possibility for the case to settle. …CPC just needs to offer to sell its spaces in the Water Street Parking Garage for their fair market value.”

While Mark Brown, who also owns Yellow Cab, has listed the Main Street Arena for sale before as what he calls a “teaser,” this time he says he’s serious and has ordered a for sale sign. The arena is listed at $6.5 million.

“I don’t have any confidence in [city leadership’s] ability to function in a rational way,” he says, as Charlottesville transforms from a town to a small city. He sees “signs of dysfunction” in how the city is run. “You can’t put out patio chairs in the wrong color but they let the Landmark sit for eight years,” he says, referring to the hotel skeleton on the Downtown Mall.

“I’m not angry,” he says, while expressing concerns about the Belmont Bridge (“How long has that dragged on?”), the Strategic Investment Area and the West Main streetscape. “I don’t see any leadership from City Hall,” he says.

Brown believes money invested in municipalities that have “real leadership” will result in a higher return.

As for the fate of the only ice rink in the area, says Brown, “That’s going to be up to the owners of the building. I’m going to be investing elsewhere.”

CPC Response Letter 9-12-16

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CPC floats four parking scenarios

Former mayor Dave Norris urges the city to stop kicking the can forward and resolve the Water Street Parking Garage morass once and for all. Staff photo

The parking wars have quieted since a judge rejected the Charlottesville Parking Center’s petition for an emergency receiver June 27 and CPC owner Mark Brown decamped to Greece.

But here in the dog days of August, CPC general manager Dave Norris, whose June 24 proposal was rebuffed by the city, offers four scenarios for settling the dispute over the Water Street Parking Garage that has smouldered since the city nixed Brown’s parking rate increase last fall.

That led to a suit and countersuit, with the city threatening eminent domain on the jointly owned garage.

What’s different this time?

“These are new options that we feel have been responsive to the concerns expressed in the previous settlements,” says Norris. “More importantly, it addresses the bigger issue of the lack of parking downtown.”

And that’s an issue that has Albemarle ready to jump ship with its general district court. The county is studying a move from historic Court Square to the County Office Building on McIntire Road with its ample lots.

“The real news is that we’re proposing to build a new garage that would keep Albemarle courts downtown that we’d pay for 100 percent,” says Norris.

That’s scenario No. 3, in which the city sells its spaces in the Water Street Garage to CPC, which builds a 300-space, state-of-the-art garage on the lot owned by the city and county at Market and Seventh streets. Upon completion, CPC would guarantee 100 spaces for county court use at no charge for 30 years.

“That could be a significant win-win-win scenario for everyone,” says Norris. “If people are concerned about parking rates, the best thing is to increase the supply.”

He also offers to sell CPC’s spaces in Water Street Garage to the city at a rate it would have to pay under eminent domain, which CPC believes is considerably higher than the $2.8 million the city offered in June. Another scenario is the city sells to CPC and takes its earnings to build another garage. During that time, CPC pledges it will not charge more than the city-owned Market Street Garage.

“One of the concerns that’s been expressed is that we’d jack up rates to the roof,” says Norris. “We’d give them two to three years to build a replacement with rates not to exceed Market Street, and honor current validation and long-term parking leases.”

The fourth scenario is for the city to continue to pursue eminent domain, which will be a lengthy and costly proposition, says Norris.

His latest August 8 proposal came hours before City Council was to meet in a closed session to discuss parking.

And his predictions on how well received his latest proposal will be?

“My sense is there is a strong desire in some quarters to litigate this out under eminent domain,” says Norris. “That’s a lose-lose. The city has already incurred $60,000 in legal bills. It hinders expanding parking downtown.” That, he says, would be on hold until the Water Street litigation is settled.

City spokesperson Miriam Dickler declines to speculate on the latest CPC proposals. “Council hasn’t discussed these yet, so I really don’t know,” she says.

CPC to city 8-8-16

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Parking garage ‘soap opera’ leads city to reject Brown’s offer

Former mayor Dave Norris urges the city to stop kicking the can forward and resolve the Water Street Parking Garage morass once and for all. Staff photo

Mayor Mike Signer and City Councilor Kathy Galvin insist there is nothing personal in the city’s dispute with Mark Brown over control of the Water Street Parking Garage. In meetings with reporters July 6 after the city rejected Charlottesville Parking Center’s June 24 proposed settlement of the escalating controversy over the fate of the garage the city co-owns with Brown, the two said they decided to answer questions about the issue to demonstrate the unanimity of council.

“It’s a very unusual set of circumstances,” says Signer, because the other side at every turn has tried to “create a sense of panic.”

The city’s June 6 resolution to make an offer to buy out Brown’s share of spaces at Charlottesville Parking Center was not a change in course after months of discussions with Brown, says Galvin. His lawsuit against the city over parking rates and his threats to close the garage “make us think that single ownership of the garage should be with the city.”

The parking center’s proposed settlement, says Signer, was not a response to the city’s offer to buy out Brown.

In the CPC settlement proposal that came one day after the Downtown Business Association of Charlottesville sent the city and Brown a letter urging both sides to tone down the “extreme threats” and four days before a judge denied CPC’s petition to appoint a receiver for the garage, general manager Dave Norris basically ceded control of the garage to the city as far as rates, as long as the city paid the difference in fair market rate to CPC.

It was Brown’s insistence on being able to profit from the public/private partnership that was the breaking point. The councilors reiterated that the Water Street Parking Garage Condominium Association agreement “does not contemplate pecuniary gain or profit to the members thereof…”

Throughout the discussions, says Signer, Brown accused the city of “stealing my money.”

That CPC wanted the city to subsidize his share “suggests a sense of entitlement,” says Galvin. “It reinforced the sense we should go our own way.” CPC can still manage the garage for one year, rather than the five years it wanted in its proposal, the city said in its response. “His behavior has destabilized the community,” she says.

“The soap opera has all been on one side,” adds Signer.

And that soap opera includes Brown’s March 14 lawsuit against the city, the city’s April 29 countersuit that claims it didn’t get the right of first refusal on spaces CPC bought from Wells Fargo and the DBAC splintering over the garage, with one faction saying it wasn’t taking sides, while Violet Crown hired Susan Payne, who did PR for Signer’s council campaign, to sway downtown businesses to urge the city not to sell out to Brown.

“We’ve tried to be stabilizing,” says Signer. “The more deliberate we’ve been, the more erratic he’s been.”

And the city is still not ruling out eminent domain as a remedy, “one that we would consider only reluctantly,” says Signer.

The attorney Brown hired to handle any eminent domain moves by the city, John Walk, in a July 11 letter, rebuffed the city’s $2.8 million offer to buy Brown’s shares of the garage, and said it would cost the city at least $9 million, based on the tax assessed value, to buy him out. Not that he’s selling, says Walk, who reminds the city Virginia’s constitution prohibits the use of eminent domain for economic development.

The CPC camp has maintained that it thought an agreement was almost a done deal during negotiations June 2, the same night DBAC held a meeting at Violet Crown. Norris says Signer specifically asked Brown not to send Norris to that meeting, something Norris now says was a mistake.

“We said we weren’t planning on attending,” says Signer. “Ms. Galvin said she wasn’t going to be there. With the ongoing litigation, we said it wasn’t a good idea for us to be there. I think they’re reading way too much into that,” he says, calling the CPC depiction “false theatrics.”

Norris did not immediately return a phone call.

Sitting outside the conference room in City Hall where Signer and Galvin were meeting with reporters, Payne handed out a statement expressing the support of Violet Crown and many downtown businesses for the city holding firm in its decision to pursue affordable parking in the Water Street Garage.

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CPC letter to T. Wolf re_ eminent domain 7.11.16 (1)

Updated July 11 with Brown’s eminent domain attorney’s letter to the city.

 

 

 

 

 

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No emergency: Judge rejects parking center petition for special receiver

After a judge denies the Charlottesville Parking Center’s petition for a third party to run the garage, CPC general manager Dave Norris says there are much bigger challenges facing parking downtown than one garage. Staff photo

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.

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Susan Payne and City Attorney Craig Brown after the city prevails in court. Staff photo

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.

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DBAC urges city and parking center to knock off bully tactics

Former mayor Dave Norris urges the city to stop kicking the can forward and resolve the Water Street Parking Garage morass once and for all. Staff photo

The Downtown Business Association of Charlottesville sent a letter to city councilors and Charlottesville Parking Center owner Mark Brown today requesting the city and the CPC “reach a quick agreement on the parking stalemate” over the Water Street Garage and withdraw “extreme threats” such as eminent domain and closing the garage.

Mary Beth Schellhammer wrote on behalf of the DBAC board of directors to ask the city and Brown to consider the “significant impact the lack of resolution is having on the image of downtown Charlottesville.”

An impasse over parking rates at the garage, jointly owned by the city and Brown, has escalated to lawsuits, with the city saying last week it had begun the condemnation process on the garage for eminent domain, while Brown filed to have an emergency receivership appointed to run the garage.

“I think this is a very welcome development,” says Dave Norris, CPC general manager and a former mayor of Charlottesville. “Anytime government threatens eminent domain, it really is pushing a nuclear button.”

Two weeks ago, members of the DBAC were circulating petitions urging the city not to sell its shares in the garage at the same time the parking center said it was on the verge of a settlement with the city. At the June 6 City Council meeting, councilors passed a surprise resolution to buy Brown’s shares of the garage.

“The consistent theme is DBAC communicating they want to see this matter resolved,” says Norris. “They want to be able to preserve affordable parking downtown. That’s their bottom line.”

Norris says he thinks some DBAC members were uncomfortable with the city’s threat to use eminent domain against fellow business owners. “If you read between the lines, they’re saying don’t use eminent domain in our name,” he says.

“The letter is not going back on anything we’ve said,” says Schellhammer. “Time is critical. We’re stressing to the city and Mark Brown not to let this drag on.” If a receiver is appointed to manage the garage, “this could go on for three, four, five years,” she says.

As for eminent domain, she says she doesn’t know that’s needed and there’s room for everyone downtown. “I believe Mark Brown deserves to own a business and be profitable. The city deserves to be able to provide affordable parking.”

The escalating dispute, she says, “is a bully fight.”

The Charlottesville Regional Chamber of Commerce also wants the city and CPC to negotiate a settlement. “Eminent domain is a hammer that isn’t necessary,” says its president, Timothy Hulbert.

Read the DBAC letter to Mark Brown and city councilors

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City lawyer: Condemnation of Water Street Garage has begun

Attorney Tom Wolf explains how the city is moving forward to condemn the Water Street Parking Garage. Staff photo

How many lawyers does it take to schedule a hearing? Well, if it has anything to do with the highly contentious battle between the city and Mark Brown’s Charlottesville Parking Center, that would be five attorneys in Charlottesville Circuit Court today to set a date for CPC’s petition for the appointment of an emergency receiver. During the hearing, the city’s lawyer from Richmond, Tom Wolf, told the judge the city had begun the condemnation process of the Water Street Parking Garage.

“We’re moving forward with the condemnation,” said Wolf outside the courthouse. That process involves getting an appraisal, making an offer and filing suit—not to be confused with the suit against CPC the city has already filed.

A June 22 hearing on the emergency receivership had been canceled, and CPC filed a motion claiming the city’s counsel falsely said that change of date was mutually agreeable to all parties. Judge Rick Moore said he was concerned with the representation that rescheduling was okay with everyone. “I don’t want that to happen,” he said.

Wolf blamed an assistant for the error.

The parking center’s attorney, Will Prince, said he was not required to give notice to all parties because of the emergency situation, with CPC’s management agreement to run the Water Street Garage expiring June 30. At that point, management of the garage reverts to the deadlocked Water Street Parking Garage Condominium Association, with its board evenly split between the city and CPC.

“It’s not an emergency,” said Wolf, who said the garage was an ongoing business and the city objected to appointing a stranger to run it.

“It’s not going anywhere,” observed Moore. He said that he wanted to hear from all parties to make an informed decision.

Ty Grisham represents the deadlocked condo association. “We’re in an untenable situation,” he said “It’s difficult for the association to have a position. We urge the court to consider all the concerns about timing.” He noted that the condo association board has to approve a management company. “Because of the stalemate, that’s not going to happen,” he said.

Prince said he had a problem with Wolf’s characterization of CPC “walking off the job,” and said the city had threatened to sue if CPC tried to close the garage. “CPC wants the garage to stay open,” he said.

Brown was not in court, but new CPC general manager Dave Norris was. Earlier today he called the city’s plan to take the parking garage “an egregious abuse of eminent domain power.”

For more on parking garage battle, read this week’s story, “Escalation Clause: City threatens eminent domain of Water Street Garage.”

cpc response to rescheduling 6-14-16

 

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Escalation clause: City threatens eminent domain of Water Street Garage

The city could attempt to end its public/private marriage in hell with Mark Brown with eminent domain, a divorce surely headed to court. Photo: Matteus Frankovich/SkycladAP

In this week’s episode of Charlottesville v. Mark Brown over the Water Street Parking Garage, the city makes an offer to buy Brown’s shares of the garage. If he declines, it plans to initiate eminent domain proceedings, according to the city’s outside attorney.

“For months Mark Brown has been trying to bully the City into giving him control of the Water Street Parking Garage,” says Tom Wolf with LeClairRyan in Richmond in an e-mail. “He has even threatened to close down the garage, which he has no power or authority to do. Mr. Brown’s first lawsuit was meritless and this new one is a transparent attempt at further bullying. The City is not intimidated by Mr. Brown’s threats.”

Wolf calls the Water Street Garage “a public necessity,” confirmed by the recent public outcry demanding accessible, affordable parking in the city’s core. Downtown business owners have circulated petitions asking the city to not sell its spaces to Brown. 

On June 8, the city offered to buy spaces from Charlottesville Parking Center, which is owned by Brown, at the same price per space that CPC offered the city earlier this year. “According to CPC that price is above fair market value,” says Wolf. “If CPC refuses, the City will initiate the statutory procedure to make it possible to acquire CPC’s spaces through eminent domain.”

And that’s in a state that passed a constitutional amendment in 2012 prohibiting eminent domain for private enterprise, job creation, increased tax revenue or economic development.

Delegate Rob Bell wrote the constitutional amendment, and he says the key is that the use of a condemned property has to be public. He declines to weigh in on the city/Brown contretemps, but also notes that just compensation would have to be paid, including lost profits.

“The condemnor has the burden of proving it’s a public use,” he says. “Whether that’s a good use, the voters will decide. Ultimately it’s going to be settled by the court.”

“It’s unprecedented,” says CPC general manager and former mayor Dave Norris. “It’s a very extreme step that only escalates the current situation. Eminent domain is not designed to resolve a pricing dispute.”

The city’s move, says Norris, “creates a frightening precedent for any business wanting to do business downtown. If the city doesn’t see eye to eye on pricing or management, they’ll threaten to seize your property.”

While the two increasingly acrimonious sides had indicated they were going to attempt to settle their respective lawsuits, that conciliatory tone seemed to fall apart when council voted June 6 to make an offer to buy Brown’s spaces in the garage without his knowledge. Brown followed up the next day with a petition for an emergency receivership.

The petition cites the deadlock on the board of the Water Street Parking Garage Condominium Association, whose seats are evenly split between the city and Brown’s Charlottesville Parking Center. 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 the city’s attorney, Wolf, is known to be pretty pricey himself. Wolf declines to reveal the rate he’s charging the city because, he says, he doesn’t want his other clients to know how steep a discount he’s offering.

“I agreed to a large discount in my hourly rate because my fees will be paid with taxpayer money and because I love litigating against bullies,” says Wolf.

He points out that all good trial lawyers with decades of experience are expensive and he knows for a fact there are many lawyers in Virginia whose normal hourly rate is significantly higher than his.

Brown declined to comment on the eminent domain threat. The emergency receivership petition was scheduled to be heard in court June 22. Another hearing on that scheduling will take place at 4:30pm today.

Says Heilberg, “It sounds like a mess.”

“The city has taken a situation that was messy and made it messier,” says Norris. “My sincere hope is that sanity prevails.”

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.

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: 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.

June 8: City offers to buy out CPC for the same price Brown offered to buy the city’s shares.

June 10: The lawyer representing Charlottesville says the city will use eminent domain if Brown doesn’t sell.

Updated 11:33pm June 15 with Dave Norris comments.

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Brown petitions for emergency receivership against Water Street Garage association

Former mayor Dave Norris urges the city to stop kicking the can forward and resolve the Water Street Parking Garage morass once and for all. Staff photo

 

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

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Surprise resolution: City makes move to buy Water Street Garage

The city didn’t tell Mark Brown it was passing a resolution to buy him out of the Water Street Garage. Staff photo

City Council unanimously passed a resolution June 6 authorizing City Manager Maurice Jones to make an offer to buy the parking spaces owned by Charlottesville Parking Center in the Water Street Garage. Both the city and CPC owner Mark Brown have said they are in talks to resolve issues that led to the entities suing each other, but Brown says he was unaware of the plan offered up Monday night.

Just when things seemed to be quietening down in the ongoing battle between the city and Brown over the fate of the Water Street Garage, downtown business owners, not reassured by the two sides promising to play nice and work things out, met June 2 for an “open and impartial discussion” that ended with the 60 or so attendees endorsing a petition brought by Violet Crown and its PR firm that opposes privatization of the garage.

The city’s handling of downtown parking also was roundly condemned.

“We have a parking problem,” said downtown property owner Aaron Laufer—several times. He also wondered whether eminent domain for the Water Street Garage was an option.

The latest consternation started a week earlier at a Downtown Business Association of Charlottesville meeting when Violet Crown’s Robert Crane, aided by Payne Ross’ Susan Payne, proposed a petition to the city that it not sell its share of the complicatedly owned Water Street Garage.

“We would not have come into this community without affordable parking,” said Violet Crown owner Bill Banowsky at the June 2 meeting. The theater had an agreement with the Charlottesville Parking Center to pay 35 cents an hour for validated parking, the same rate that Regal Cinema had. Brown bought CPC for $13.8 million in 2014, and the parking rate doubled, said Banowsky. The city agreed to subsidize 20 cents an hour, but that agreement only goes through the end of the year, he said.

“CPC has gone on record saying they want to drive up rates to what the market will bear,” said Banowsky.

IX complex owner Ludwig Kuttner was even blunter: “We have a maniac who decides to blackmail us. He plays crazy, we play crazy.”

ludwigKuttner
Play crazy in dealing with Mark Brown, advises Ix owner Ludwig Kuttner. Staff photo

While Kuttner said building a garage at IX was an option, he also suggested the group find properties suitable for parking. “I know 20 spots we could use that are not used now,” he said.

Brown claims the city is forcing him to keep Water Street Garage rates below market rate and below what the city charges at the Market Street Garage. He filed suit against the city in March, and the city countersued in April, alleging it didn’t get right of first refusal on parking spaces Wells Fargo sold to CPC.

Brown was not at the June 2 meeting, nor was anyone from CPC. Before the meeting, brand new general manager and former mayor Dave Norris pooh-poohed the notion that Brown would jack up rates. “That doesn’t make business sense,” he says, especially when Brown’s share of parking downtown is 19 percent.

Norris pointed out that Violet Crown has a monopoly downtown and it didn’t jack up its rates, nor did Brown with Main Street Arena or Yellow Cab, companies he owns. “He’s a business guy,” says Norris.

Jones sent a letter on behalf of the city to DBAC president George Benford to reassure those at the meeting that work was going to address long-term parking needs. “It is important to emphasize that despite increased recent attention, we do not have a parking crisis in downtown,” said the letter.

Tin Whistle owner Jacie Dunkle wasn’t buying it. “For Maurice to send that, that’s bull,” she said. “Quite frankly, I don’t trust the City Council to make a wise choice,” she said, mentioning the recent increase in the meals tax despite restaurant owners’ objections. “They already know we don’t want meters,” a plan recommended by a city study and by Brown.

City councilors Bob Fenwick and Wes Bellamy were at the meeting. “These things are being discussed in executive session,” said Fenwick.

Councilors pay close attention to e-mails from constituents, said Bellamy, and the voices he’s hearing on the issue are fragmented. “Unity is what’s going to move things through,” he said.

“If another 1,000 spaces were parachuted downtown, I don’t care if Mark Brown owns Water Street,” said Laufer, who added that Brown is a friend. He urged the city to buy out Brown.

The city had multiple opportunities to buy the garage before Brown did, says Norris, and he questions whether it will be able to afford millions to upgrade the garage when it cut $50,000 for the municipal band from the budget. “There are 300 empty spaces on the third floor with a 200-plus person waiting list,” he says. “How does that make sense?”

Charlottesville is facing parking issues on multiple fronts. Albemarle is looking at whether to remove its general district court from Court Square because of parking. New businesses need parking, as do employees and the Landmark Hotel.

“My concern with the petition in general is it’s going to prolong and maintain the litigiousness going on now,” says Norris. “We have an opportunity to resolve it. Let’s resolve the long-term issues with parking.” That was before the City Council resolution. Norris was unavailable at press time, and Brown declined to comment on the city’s latest plan.