Los Angeles moves to privatize city parking structures

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Frank Stoltze/KPCC

Los Angeles city workers pack City Hall. They asked the City Council to avoid extending unpaid furlough days and layoffs. The city faces a current $62 million shortfall, and a projected $350 million deficit for the fiscal year that starts July 1.

The Los Angeles City Council Wednesday voted to move forward with a plan to privatize nine city parking structures. The unanimous vote came despite pleas from some business owners who fear the move will push up parking rates and drive away customers.

The city, facing its worst budget crisis ever, is hoping to haul in $53 million from the parking deal. L.A. faces an immediate $62 million shortfall.

Under the plan, the city would sign a 50-year deal with a private operator who would pay a one-time sum to the city – plus a share of annual revenues.

Wendy Shane, who owns a jewelry store near a city-owned parking structure in Westwood Village, denounced the move. She worried a private operator would raise rates at the facility and drive customers away from an area already hard hit by the recession.

“I can guarantee you there will be more businesses closing,” Shane said.

Councilman Paul Koretz, who represents the area, sounded sympathetic.

“The fact is we are competing with Santa Monica, which is now hugely successful, and Beverly Hills and Culver City.”

But Koretz said he may go along with a deal if the city found a way to ease the pain for businesses. City administrators warned that placing too many restrictions on a private operator would reduce revenue to the city.

A proposal is expected to go out to bidders later this month. A deal could be signed in March.

The city’s financial outlook is dire. It faces a projected $350 million deficit for the fiscal year that starts July 1.

Bond rating agencies are closely watching how the city proceeds. So are the city's powerful labor unions.

City workers packed City Hall pleading with the Council to avoid extending unpaid furlough days and more layoffs.

Councilman Grieg Smith said the city must protect police and fire services as tax revenues remain flat and health care and pension costs soar.

“We have to lay off people to get there. If you want to protect public services, we have to take the pain.”

Councilman Koretz, a staunch ally of the city’s labor unions, conceded that the council needs to take drastic action in next year’s budget.

“We’re looking at layoffs probably anyway. We’re looking at furloughs probably anyway,” he said.

“It’s just a matter of how much we devastate things.”

The city already has eliminated more than 4,000 positions; 400 people have lost their jobs.

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