The Charlottesville Parking Center has purchased 106 spaces in the garage from Wells Fargo for $600,000, a price that is one quarter of the property’s assessed value of $2.3 million.
“The spaces were private and we need more spaces in the public pool,” said Mark Brown, the sole shareholder of the Charlottesville Parking Center.
Brown said Wells Fargo employees will continue to lease the spaces from CPC. He added negotiations lasted about a year.
“I think there’s always been an assumption that the bank would sell their spaces, so it’s not a terrible surprise,” said Chris Engel, the city’s director of economic development.
The Water Street Parking Garage is owned by the Water Street Parking Garage Condominium Association, which includes the city of Charlottesville and the Charlottesville Parking Center as unit holders. The property is governed today by an eight-person board of directors as codified in a 1994 agreement that created the Condominium Association.
The Charlottesville Parking Center’s role at Water Street began with a June 18, 1992, agreement when it entered into a 99-year lease to operate parking services and manage commercial spaces.
Rent in the first year of the lease was set at $131,000 a year and was to increase to $167,691 by the end of the 10th year. The terms of the lease required the rent to be recalculated in 2014 using the fair market value as determined by an appraiser. Appraiser Ivo Romenesko established a figure of $415,000 a year.
Brown has filed suit against Romenesko, making the claim that the rent payment should have been higher. Brown is seeking $4.25 million in damages, but the suit does not seek to change the rent. The case is pending in Albemarle CountyAlbemarle CountyAlbemarle County Circuit Court.
The rent is scheduled for another reset in the lease’s 32nd year.
The Condominium Association agreement also establishes that a majority vote requires 70 percent of the board members, or at least six of the eight voting members, to amend the by-laws or make major policy changes.
Membership on the board is determined by the percent of property ownership. The city has four directors based on its ownership share and the retail establishments select one director.
On Oct. 28, the same day that CPC picked up its third seat from the
Wells Fargo agreement, attorney J. Tyler Grisham wrote to the Water Street board of directors, notifying them that CPC elected to appoint William van der Linde to replace the Wells Fargo representative.
Brown said he did not anticipate that there would be any changes due to the sale.
“The city and the CPC have had a partnership with the garage since it was opened and that will continue,” Brown said. “We’ll both continue owning part of the building and continuing to work together to provide the public with its parking needs.”
Engel said the documents will continue to be studied to see what mechanisms are in place to resolve any future disputes.
“We’ve never had a situation where there’s been a disagreement, and so we need to dig through what the documents say,” Engel said. “The city and the CPC have always been in agreement … on how to set the policies for the parking garage.”
There has been much talk this year about the future of parking in downtown Charlottesville.
In January, Brown asked the City Council to consider metering on-street parking and create an authority to manage parking. In response, the council agreed to conduct a $120,000 parking study.
They received the Nelson Nygaard study in early October. Among other things, the consultants recommended on-street spaces close to downtown should be metered at a higher rate than the parking garages. The study also suggested the possibility of free parking on the top floor of the Water Street garage.
The study also called for all revenue from on-street and off-street spaces to be collected through a new parking department under the city’s control.
“There were parts of the study we agreed with and parts of the study that seemed to be lacking information and research,” Brown said.
Engel said he is still considering how the sale affects implementation of the study.
“The parking study is much broader scope and there’s a lot more to it than just the rates at the garage,” he said.