Video: City makes really, really horrible deal marginally less horrible

Water Street parking deal will cost city millions for decades

On Monday night Charlottesville City Council saved the absolute worst for last, reluctantly voting to approve something none of them wanted to approve and something that will cost taxpayers millions for decades to come. Indeed, you can watch the truly painful proceedings below.

In 2014, developer Mark Brown bought the Charlottesville Parking Center, which would end up giving him sole ownership of a 99-year ground lease the CPC and the City entered into in 1991 for what would be home to the Water Street Parking Garage. That lease has recently required the City to pay Brown $415,000 a year to keep providing parking capacity downtown. But a clause in the lease allows Brown to adjust that rent every 10 years, and in 2024 Brown demanded $2.4 million a year. Not wanting to be locked into paying Brown $2.4 million a year for the next 67 years years, with similar bumps in price every 10 years, the City attempted to negotiate.

As Chris Engel, the City's Director of Economic Development explained last night, the deal they worked out goes like this: the City will start paying Brown $1.8 million a year and it will increase by 3 percent every year or the annual inflation rate. Then, in 10 years, there will be a one-time increase of 15 percent followed by the yearly increases, and in 2044 the City will be given an option to buy the ground lease at its estimated value. As Engel put it, that would allow the City to "get out of the ground lease 47 years early."

As Charlottesville citizen Rory Stolzenberg pointed out during the first public comment period, the City would be paying Brown an estimated $70 million over 20 years, and it could cost as much as $95 million to buy the property in 2044, making it “one of the biggest expenditures in City history,” he said.

In response to Engel’s report, Vice Mayor Brian Pinkston, with a pained look on his face, seemed to speak for everyone on the dias when he said, "It sounds like we're making what was a really, really horrible deal marginally less horrible..."

Indeed, Councilor Michael Payne asked if there was any way for the City to just pull out of the deal.

"Right now we have an obligation for 67 years. We could walk away and say we don't want this, but I think we would be subject to legal action immediately," said Engel.

Stolzenberg, who was still there when the motion passed hours later, wasn’t pleased.

"To make that decision to hand Mark Brown over seventy million dollars into his pockets....without even asking staff what it costs, how much the city will lose in that presentation that didn't mention a single dollar amount...I think it's disgraceful."