NEWS- Grand land: Does CPC breakup mean windfall?
Good things come to those who wait. Now, 48 years after businesspeople pooled their money to save downtown from competition from the newly opened Barracks Road Shopping Center, some folks may be in for a windfall. The company known as Charlottesville Parking Center Inc., created to provide cheap downtown parking, could soon, as first reported March 19 in the Daily Progress, be broken up and/or sold.
And if hunches about its assets prove true, CPC president Jim Berry and the heirs of the late Hovey Dabney could realize a windfall of several million dollars. The future of downtown businesses, however, may be a bit more problematic, as they perhaps face the loss of downtown shoppers who have come to expect two hours of free parking simply by strolling into, say, CVS or the downtown library.
In just the past dozen years, the City has divested itself of three public lots downtown. One by Court Square became the headquarters of the McGuire Woods law firm, one by the Omni Hotel became the Charlottesville Ice Park, and just last year the one located by the C&O restaurant became a luxury condo tower called the Holsinger.
"This whole parking thing is getting ridiculous," says Sandy Ruseau, who operates an art gallery in York Place. "When you have a pedestrian mall, you make it successful by getting people down here.
"A lot of the businesses are having trouble, and they say it's all based on parking," says Ruseau, who says the accounting firm she used moved from downtown because of the paucity of parking, which can cost as much as $110 per month.
However, even though his business currently pays just $75 a month to validate customer parking, the manager of Chaps ice cream parlor, Tony LaBua, doesn't see any parking problems that could result from a CPC breakup.
"We're getting to look like a regular city," says LaBua. "If people wanna see Bonnie Raitt at the Pavilion, they'll pay 75 cents or whatever for parking. You gotta pay for what you want to do."
A couple of years ago, a developer wanted to pay more than $7 million for one CPC asset– a 126-space asphalt parking lot on Water Street– and spent $40,000 a month from October 2005 until sometime in 2006 to maintain his purchase option. Other CPC assets include the land under the adjacent Water Street Parking Garage and 284 parking spaces within the structure.
In the mid 1990s, says Spencer Connerat, who was a young banker at the time, he was fascinated when Jim Berry and Hovey Dabney– his bosses at Jefferson National Bank (now Wachovia)– began buying CPC shares for themselves. During 1996 and 1997, Berry and Dabney divided up shares as they became available, each purchasing blocks of shares ranging from 1,485 to 29,690 at prices of $1.00 and $1.05 per share.
At such prices, Connerat says, the shares looked like a bargain, and he wanted to get in on the action. But when he did buy some shares from a customer, the elder bankers retaliated by firing him from his job. He then successfully sued to get on the CPC board, he says.
By the time of a 1998 report to shareholders, Berry and Dabney were not only buying shares for themselves, but had also begun directing the company to buy back shares from stockholders for $1.15 each. Too low? Not according to a 1998 business appraisal performed by Michael Semanik of Triumph Associates. He found the company had a liquidation value of $1.5 million and about half that as a going concern.
Another note in Berry and Dabney's defense (Dabney died in February, and the Hook has been unable to speak directly with Berry), the price offered to weary owners in 1981 was just fifteen cents a share.
These two lead shareholders combined to own over 183,245 shares, or about 36 percent of all the stock, by the end of 1997. But if they were gobbling shares, they were also continuing to operate the business like a charity. They paid themselves no salary, and they allowed the manager of the company, Bob Stroh, to devote his energy to downtown promotions. Stroh has long said that the company sees its mission as providing low-cost parking for downtown shoppers and businesses.
Indeed, the first board of CPC reads like a who's who of Eisenhower-era Charlottesville businessmen. The roster included Miller & Rhoads manager Francis Brawley, Charlottesville Hardware's Frank Burnley, and Keller & George jewelery boss Harry George.
In an early 1959 letter, CPC's founding president H.A. Haden, then president of what would become Jefferson National Bank as well as both the Jefferson and the now demolished Lafayette Theaters, implored Altha Davis of Davis Florist to invest $1,000 in the CPC.
"The amount required to finance this venture is very substantial," Haden wrote, "and unless each of us does his best, we are likely to fall short of our goal."
That effort to provide surface parking resulted in the demolition of numerous buildings, including the C&O freight depot. The CPC's downtown benevolence continued at least until the early 1990s when the company spearheaded a partnership with the City and Jefferson National Bank to turn part of its sea of asphalt into the Water Street Parking Garage– with the CPC retaining the land underneath it in a 99-year lease.
Back at the company, the payments from operating parking lots continued to make CPC a profitable company. But lurking underneath were parcels growing increasingly valuable in the 21st century real estate frenzy. While the city tax assessor still thinks the one-acre Water Street parking lot is worth just $2.022 million for tax purposes, a private appraisal found its value to be $7 million, and that was over two years ago.
With investors like Connerat and local developer Richard Spurzem making waves to get a return on their CPC investments and open up the organization's books, the board has finally revealed that the investors– at least those who didn't sell their shares for a dollar or so in the 1990s– could be looking at a sale. According to our calculations, the per-share dividend just on the sale of the Water Street asphalt lot could be nearly $20. The total value of the company, which holds lucrative management contracts in addition to its real estate, might conceivably be double that.
"This is a long time coming," says Spurzem. "The time has long since passed that CPC needs to subsidize downtown parking, and it's time to redeploy the assets and return the money to the shareholders."
When the Hook, which owns a single share of CPC, requested a peek at the company documents in late February, CPC's lawyer demanded that we sign a confidentiality agreement and state a proper corporate purpose. So we withdrew that request. The annual meeting is set for Thursday, March 22. Maybe then we'll find out exactly what's going on.
"Hindsight is perfect," says accountant Frank Birckhead. "You have to remember that people– including myself– at one time thought the parking garage was way too big, and no one had the slightest inkling that downtown condos would be the hottest new place to live. We all benefit today from Hovey Dabney being a visionary."
This $7 million acre is just one of CPC's holdings.
FILE PHOTO BY HAWES SPENCER