NEWS- CPC selling: April 1 deadline nears for parking firm offers
Charlottesville Parking Center Inc., founded in 1959 to save downtown but later dominated by a pair of quietly-moving bankers, intends to be sold, and CPC's most dissident shareholder fears that a sweetheart deal with the City is in the works.
"Private business is what's going to feed Charlottesville's growth, not government ownership of our rich soil," says shareholder Spencer Connerat of Clearwater, Florida.
A spate of recent moves stoke Connerat's concern that although a sales prospectus has been available to any would-be buyer willing to sign a non-disclosure agreement, the buyer named "Charlottesville" is getting some particularly serious consideration.
For instance, CPC's surface parking lot, located just south of the Downtown Mall, was a subject in a City-sponsored two-block design contest last year, an effort that cost the City over $150,000, even though the City owns none of CPC's block and not all of the adjacent block either.
Also last year, the downtown office of H&R Block, located in that adjacent block, lost its lease with the City. That leaves just one impediment toward the City taking control of the entire two-block area: a small private parking lot owned by a group of psychologists in conjunction with their nearby A.G. Edwards building, and they say the City has tried to buy them out.
"It's not for sale," says psychologist Lester Pearlstein. "We're happy where we are. It's a great old building, and the building's value is very much tied to the parking lot."
An article in the Daily Progress recently revealed the City holds a special economic development fund, now measured at $4.3 million, that can be secretly tapped with neither a hearing nor a public vote— two things widely assumed to be prerequisites for government spending. The Progress reported that the fund allowed the City to sign a six-figure contract last August with law firm Williams Mullen. The lawyers are getting $200,000 for telling the City if it would be wise to buy CPC assets.
No doubt Williams Mullen's report will recall for Charlottesville officials the last time the City tried to play developer with the mid-1980s development of the Omni hotel and its subsequent early-1990s bail-out, a one-two punch that cost the taxpayers over $11 million. The deals allowed a wealthy group of New York investors to benefit from a pack of public subsidies, at least one of which– a 75-year tax-free land lease– will continue for approximately 50 more years.
In January, in a break with 49 years of history and as yet another signal that current owners are ready to cash in their chips, the current rulers of CPC paid the company's first dividend thanks to "excess cash." The January dividend means that the two largest shareholders, CPC chair Jim Berry and the estate of Hovey Dabney, unless they sold out shares since last spring, each saw a payout of over $46,000. (As the holder of a single share, the Hook scored a check for 50 cents.)
CPC is the little-understood company that began its life in 1949 as a desperate bid to stave off the threat of newfangled shopping centers, namely Barracks Road. But over the years, the company, according to a December 17 letter to shareholders, "achieved its primary goal of providing adequate low-cost parking for downtown shoppers."
And so the company is for sale. Besides the one-acre parking lot, valued at at least $7 million, are the contract to manage the City's Market Street Parking Deck, as well as partial ownership of the Water Street Parking Deck and all the land beneath that deck.
Connerat envisions selling to a "keen developer" like fellow shareholder Richard Spurzem, or to a private venture like Roanoke-based The Car Park Inc., or to banking company Wachovia, which already holds a nine percent stake in the company. He frequently jabs at Jim Berry, who allegedly had him fired for dealing in CPC stock a decade ago.
"Please remind Mr. Berry that he has a moral obligation to the people of our city, commensurate with his fiscal obligation to the stockholders of our company," Connerat wrote in a recent email after he learned that the under-construction Landmark Hotel entered into a long-term lease with the Water Street Parking Garage Condominium Association, which sits on CPC land in a 99-year land lease.
"CPC can write its own ticket!" Connerat exclaimed. "Maybe we shouldn't sell after all!"
The City's economic development director, Aubrey Watts, controller of the $4.3 million fund, recently took the Hook, "There's nothing impending and no specific negotiations at this time." A telephone call to Berry last week was not returned, but the company lawyer has already said that CPC "will not be making a sweetheart deal with the City of Charlottesville."
CPC has its annual meeting slated for Thursday, March 27. Could be interesting.