Water Street Parking Garage

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The Water Street Parking Garage was built in the 1990's and is the subject of an ongoing dispute between the city of Charlottesville and the Charlottesville Parking Center. CPC sued the city in March 2016 alleging Charlottesville officials had conspired to keep rates artificially low. [1]

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Lawsuit

In its suit, CPC sought $1 million in damages as well as an injunction against the city making future decisions related to rates. In April 2016, Mark Brown hinted that CPC might close the Water Street garage at the end of the fiscal year if the dispute was not resolved. [2] He also asked the city to sell him their interests in the Water Street garage. [3]

The city filed a countersuit in late April 2016 claiming breach of contract when CPC purchased 106 spaces from Wells Fargo. [4]

Association information

Management of the Water Street property is governed by an eight-person board of directors as codified in a 1994 agreement that created the Water Street Parking Garage Condominium Association. However, rates are set by directors who represent the 973 hourly and monthly parking spaces that are not reserved for the garage’s commercial tenants. These spaces are referred to as “pooled parking units” in the lawsuit and the condominium association’s bylaws.

As of March 2016, the city controls 629 of these spaces while the CPC controls the remaining 344 spaces.

Rates are set each calendar year and must be approved by more than a two-thirds vote of the board of directors. According to the lawsuit, the city wanted to set the rate at $125 a month for public spaces, $140 for reserved spaces and to remain at $2 an hour for transient spaces. However, the CPC wanted to increase the rate to $145 a month for public spaces, $180 for reserved spaces and $2.50 an hour for transient spaces. The two sides deadlocked.

The suit also says the rates at Water Street are lower than those set for the Market Street Parking Garage, which is wholly owned by the city, although managed by the CPC. The CPC also claimed the city is actively competing against the Water Street garage by operating the Market Street Parking Garage with higher rates and proposing the installation of parking meters based on an October study.

To resolve the impasse, the CPC offered to hire an appraiser to establish a fair market rate for parking but the suit claims the city refused to consent. The CPC hired Integra Realty Resources to conduct one anyway and the firm’s appraisal established rates of $165 a month for public spaces, $200 for reserved spaces and $2.50 an hour for transient spaces.

In January, the CPC offered to lease or sell all of its parking spaces to the city.

In February, the city responded that leasing would not be an option but wrote to the CPC stating that the City Council would entertain selling the city’s 629 spaces. The CPC made an offer that the suit claims was a “substantial premium” over market value. However, the city turned down the offer in a Feb. 17 letter.

“While the City Council remains very interested in changing the structure where both the city and CPC own spaces in the garage, the decision to sell the city’s spaces or to acquire CPC’s spaces implicates several significant policy issues that must be resolved before the city can make a substantive counterproposal,” wrote City Attorney Craig Brown. “We anticipate that City Council will address all of those issues in the next six months.”

He concluded his letter by saying the city could support a phased increase in parking rates at the garage if the CPC would drop its opposition to that concept.

The CPC’s lawsuit seeks action on three counts. First, they want $1 million in damages related to a “breach of fiduciary duty.”

“The city is actively competing against the Water Street Parking Garage … and CPC by operating a competing parking structure in downtown Charlottesville,” reads the suit.

The second count seeks court intervention to remove the city from a decision-making role on the condominium association through a process known as “disassociation.”

The third count seeks an injunction from the city participating in any further decisions related to setting rates at the garage.

CPC acquisitions continue

CPC also purchased several commercial storefronts in the garage in March 2016, shortly before the suit was filed. The CPC paid $1.35 million for eight units previously owned by a limited liability corporation called Octo Aquavia. The CPC also is under contract to purchase another five commercial units from the Virginia Land Co.

In October 2015, the CPC purchased 106 parking spaces from Wells Fargo for $600,000.

References

  1. Web. Charlottesville Parking Center files lawsuit against Charlottesville, Sean Tubbs, News Article, Charlottesville Tomorrow, March 14, 2016, retrieved December 31, 2016.
  2. Web. Management could close Water Street garage over suit, Chris Suarez, Daily Progress, World Media Enterprises, April 19, 2016, retrieved January 2, 2017.
  3. Web. CPC owner asks city to sell interest in Water Street Garage, Sean Tubbs, Charlottesville Tomorrow, April 28, 2016, retrieved January 2, 2017.
  4. Web. City files countersuit against Charlottesville Parking Center, Sean Tubbs, News Article, Charlottesville Tomorrow, April 29, 2016, retrieved January 2, 2017.

External links