Another shortfall in sight for a Richmond parking authority

A looming debt payment no longer looks ominous for the cash-strapped authority that oversees a number of parking garages in downtown Richmond, but another big shortfall already is in sight.

The city advanced more than $655,000 yesterday to the Broad Street Community Development Authority to make up a shortfall in the debt payment due June 1 on bonds that were sold six years ago to pay for new parking, demolition of Sixth Street Marketplace and public improvements to the declining downtown retail corridor.

Richmond will get the money back early next month when special taxes are due from property owners in the neighborhood. However, the city already has begun talking to the public authority about how to solve the long-term problem of too little revenue to repay debt on the bonds, much less build all of the parking garages originally promised.

The authority already expects to face a shortfall of $1.58 million in debt service over the next year in the budget it adopted Thursday. Richmond is obligated to pay up to $3 million a year in debt service on the bonds if there isn't enough money from parking revenues to pay the bill.

"Obviously, it gives the city some concern," said James Duval, the city's debt and investment manager.

The parking authority's dilemma also is underscoring concerns about the city's potential obligation to guarantee the bonds for a $60 million minor-league baseball stadium in Shockoe Bottom. The developer of the proposed stadium isn't asking for city backing, but a new economic study last week said it's highly unlikely that the project is financially feasible without the municipal guarantee.

"They're not exactly the same, but I think the principle is the same," said former Richmond City Council President William J. Pantele, who has favored keeping baseball at its current location on North Boulevard.

However, Mayor Dwight C. Jones says there are important distinctions between the shortfall to pay the parking authority's bond debt and the potential exposure for the city if it guaranteed the stadium bonds to lower the project's interest expense.

The parking bonds were issued in 2003 without an independent financial review comparable to the study that Jones released in part this week, said Tammy D. Hawley, the mayor's press secretary. The parking authority also doesn't have the option of drawing on 2.5 percent of the sales tax revenues generated in the district, as the stadium developer would under legislation adopted by the General Assembly this year.

"That's revenue that otherwise would not be available to the city," Hawley said.

The parking authority hasn't been able to generate the revenue that had been projected to finance $67.5 million in bonds issued in 2003 to spruce up the Broad and Grace street corridors in anticipation of a new performing arts center and hotel that were much slower to be built than expected then. As a result, the authority can't afford to build garages on two surface parking lots, or complete the renovation of three floors on an existing parking garage.

The authority's board is working closely with city officials to fashion a long-term solution to the recurring shortfalls in debt service. The cash advance yesterday fixed the timing problem in finding the money for the June payment and gave the city more time to study the bigger problem, Duval said.

"Do we leave it as it is, or restructure the debt?" he asked.

Members of the authority board are just happy to have a cordial conversation with the city after four years of acrimonious battling with then-Mayor L. Douglas Wilder. Chairman Ronald Stallings had a short report on the most recent meeting with city officials: "It went pretty good," he said, and smiled.

Contact Michael Martz at (804) 649-6964 or .