Developer’s Use Of Sterling Lot Raises Objections

September 19, 2018
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Developer’s Use Of Sterling Lot Raises Objections

WILKES-BARRE — The developer of the former Hotel Sterling lot could recoup nearly 60 percent of the lot’s $600,000 sale price if allowed to run a for-profit parking lot there for two years — money the city parking authority director said could be used to repair and maintain the city’s deteriorating parking garages.

Wilkes-Barre Parking Authority Executive Director Tom Torbik on Tuesday told the authority board he can’t understand why Mayor Tony George’s administration and council aren’t opposing the developer’s attempt to get a 24-month zoning variance to operate a parking lot on the property.

“I don’t know why city council or anyone from the administration isn’t screaming about this,” Torbik said.

After the city demolished the condemned hotel at the corner of North River and West Market streets in 2013, it had been leasing parking spaces on the lot, mostly to employees of GUARD Insurance company, which was headquartered across the street. The city charged a flat rate of $45 per month to park there. Torbik said the authority board didn’t object because the city was receiving the revenue.

Then in March, council approved selling the property to Gateway Center Associates, whose principal, Sam Syla, announced plans for a $35 million mixed-use project at the site to include a hotel, condominiums and retail space. The $600,000 sale closed June 19. Project engineer George Albert said in March that the company’s goal was to break ground within 12 to 18 months of initiating the project.

Since the new owner assumed control of the property — H&N Investments LLC is the owner of record, according to the deed — the permit parking rate increased to $60 per month.

Torbik said the developer is “illegally using the lot without proper zoning,” and is undercutting the authority’s $70 monthly rate by 14 percent. The authority in August filed a complaint with the zoning office, and H&N incorrectly applied for a zoning variance for residential parking. The board will hear testimony today on a temporary 24-month variance to operate a commercial parking lot at the site.

“Each month that it’s allowed to operate, it’s taking (parking revenue from) 200 cars away from the parking authority (and) giving back $13,000 a month to the people who purchased that property,” Torbik said, noting H&N already earned $39,000 in parking fees through September.

Should the board grant the variance, “that would give them back $314,000, plus the $39,000 they already collected, for a total of $353,000.

“The property was (assessed at $2.6 million) and was sold for $600,000. If they were to grant the 24-month variance, ... 59 percent of the purchase price would have been refunded to the guys that bought the property,” Torbik said.

Torbik noted that a parking study for which the city paid $23,000 and the authority contributed $20,000 last year recommended establishing a reserve account to which funds are deposited annually to address the long-term repair and maintenance of the city’s and the authority’s parking assets. The parking authority has such an account, but “the annual amounts deposited are not sufficient to pay the future needs,” the study states.

“Hello! I’ll take the $353,000 and put it into an account so we can start doing repairs to the garages as opposed to the money that’s been taken away from us,” Torbik said.

City Administrator Ted Wampole said that although the authority board members should do what they think is right, he disagrees with them and doesn’t believe there’s anything wrong with the continued use of parking on the property. He said the zoning hearing board will hear the case today, “and we’ll see how that plays out.”

In addition, Torbik said, the city is allowing GUARD employees to park at the city’s Intermodal garage at a reduced $45 monthly rate as they continue a move from the old headquarters to the new headquarters on Public Square.

Last year, in an attempt to entice GUARD to stay in the city as the company expanded, the city agreed to offer up to 1,000 parking spaces for up to 10 years at $45 per space as opposed to $70 if GUARD prepaid a lump sum for a multi-year contract.

Because the city only has 752 spaces in the Intermodal garage, which is near GUARD’s new headquarters, city officials asked the authority to pick up any excess at Park & Lock Central at the reduced rate.

However, Torbik said, although negotiations on the parking contract are still ongoing, the city has been allowing GUARD employees to park in the Intermodal garage at the reduced rate. The number of spaces GUARD employees have access to at the Intermodal increased from 60 in November to 226 this month, resulting in a loss of $38,850 in revenue to date.

Wampole said the city promised GUARD the reduced rate, “so while we’re negotiating, we’re allowing them to park there for $45.” He expects negotiations to wrap up soon. The only issues outstanding are the number of parking spaces for which GUARD will pre-pay and the length of the term of the contract.

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570-821-2110, @MocarskyCV

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