Reporting Mike Dunn
Filed underBusiness & Economy, Heard On, Local, News, Philadelphia, Politics, Syndicated Local, Watch + Listen
By Mike Dunn
PHILADELPHIA (CBS) – It was a thirty-year old deal gone bad, involving the parking garage at the Gallery in Center City, and now City Council and the mayor’s office are trying to salvage it.
In the early 1980s, with the Gallery under construction, the city agreed to guarantee bonds for the Gallery parking garage in order to convince JCPenney to sign on as an anchor tenant. That deal proved disastrous all around, and three decades later, the garage owner, Parametric Garage, owes the city $52-million after years of missed payments.
City Budget Director Rebecca Rhynhart asked City Council to approve a new deal in which the owner forks over $15-million now, and its profits going forward.
“This transaction is to get the upfront money, as well as getting operational control going forward, so that we squeeze the cash flow out of this garage for our benefit.”
Rhynart says for most of the past 30 years the garage was not profitable, but with the Convention Center nearby, it finally has become so. Council’s Finance committee approved the new deal and a final vote by the full council is expected this coming week.