City council will meet with two of its authorities to try to figure out financing for a proposed parking garage downtown.

Jim Chiprean, chairman of the parking authority, said Wednesday night that Mayor Tom Donaldson requested the meeting in hopes of ironing out what it would cost to build a garage in the Centre City project, which also includes a Rite Aid pharmacy and a proposed Marriott Springhill Suites hotel.

“Because of recent developments, Mayor Tom Donaldson has requested a special meeting to be held by city council, the redevelopment authority, and the parking authority to attempt to resolve any difficulties,” Chiprean said at his board's meeting.

The parking authority Wednesday rescinded a motion made last month to accept a surface lot proposal for the hotel.

The authority planned to build an about 70-space surface lot instead of a previously proposed 225-space parking garage due to financial doubts about the garage's ability to pay for itself.

However, solicitor Robert Stock issued an opinion saying state law would prevent the authority from building a private lot. The law, Stock said, says that public parking authorities can only maintain primarily public lots and structures.

The authority now will sit down with city council and the redevelopment authority to determine how to deal with parking on the block.

Squabble over spacesChiprean said the redevelopment authority still owes his board 137 spaces stemming from a 2007 city resolution that deeded over the lot at the corner of Jefferson and McKean streets for the project.Chiprean said that agreement was made on the assumption the redevelopment authority would replace the spaces in a parking garage.Chiprean said the parking authority deeded over two parcels, which he valued at $1 million.“We have not received one cent in return,” Chiprean said.The parking authority sent a letter to Donaldson requesting him to intervene and to request the redevelopment authority reimburse it for the 137 spaces.

Art Cordwell, the executive director of the authority, said in an e-mailed reply to the mayor that if the redevelopment authority was forced to pay for parking, he would recommend that it “declare insolvency and turn all projects over to the City and the Parking Authority.”Cordwell said Wednesday morning that his authority is struggling to remain afloat, and any additional costs would prevent it from paying its existing debts.“We just don't have the money to pay for it,” he said.Parking authority officials suggested the authority could use the revenues from its share of the hotel to pay for parking, but Cordwell said that would drive the redevelopment authority to insolvency.The authority will own 36 percent of the hotel. It was to own 40 percent, but had to relinquish an additional 4 percent to the developer for NexTier Bank to approve financing to build the structure, Cordwell said.The bank in August approved a $2.9 million loan instead of the $3.1 million requested by the developer. To finalize the deal, the authority had to give up the additional 4 percent ownership to make up for the developer's expense to cover the shortfall.Cordwell said partial ownership of the hotel by the redevelopment authority is intended to help bring in revenue to begin paying off the authority's existing debts, most notably on Kelly Automotive Park.Cordwell said it is up to the city and the parking authority to finance parking for the Centre City project.“That's what parking authorities are for,” he said.The parking authority projects a garage would cause a $100,000 annual deficit that the authority would need to make up through rate increases or by raising taxes.

Parking authority treasurer Jeff Smith said at Wednesday's meeting it would likely take a $20 per month citywide parking permit rate increase or a 2-mill property tax hike on the city's debt service tax to cover the extra cost of the garage. The current debt service is 6.25 mills, which generates about $411,000 for the city.But Cordwell said the parking authority's calculations on the parking garage are too conservative.“They put together the worst case scenario,” he said. “They're not willing to take any risks to help develop downtown Butler.”The redevelopment authority issued its own projections on the garage through a letter sent Friday by the Butler County Chamber of Commerce to the city.Cordwell calculated that a $4.5 million bond issue would carry an annual debt service of about $386,000, a $175,000 increase on the authority's existing $211,000 debt service.Under Cordwell's calculations, the hotel would guarantee 30 spaces per day at a rate of $6 per space, bringing $64,800 in income. The hotel would pay for each space the hotel uses, but would need to guarantee at least 30 spaces per day. It would leave about $110,000 to recover through the remaining 195 spaces in the garage.If the garage maintained a 60 percent occupancy rate, it would generate about $190,000 in annual revenue with a rate of $4.50 per space per day — the average revenue from parking spaces in the city.Even with $15,000 in maintenance on the garage, Cordwell estimated the garage could bring in $64,000 per year from that scenario.However, Smith said there were flaws in Cordwell's calculations.Smith said the key mistake is that the calculations assumed a parker would pay $4.50 per day for 30 days, totaling about $135 per month.“People would simply buy a permit for $50 (per month),” Smith said.Smith said a $50 monthly limit should be placed on each space. Under that scenario, the figures bring in about a $100,000 per year loss that the authority would need to recover.

City Councilwoman Cheri Readie, who attended Wednesday's meeting, said she was confused why the authority was using a $4.50 per day rate instead of the $6 per day rate that the city used last year when calculating a bond issue for the garage.Smith said it was the number the redevelopment authority used.“You'd have to ask Art (Cordwell),” he said.Cordwell was not at the meeting.Readie also questioned why both authorities used a projected cost of the garage at $20,000 per space instead of $16,000 per space, which was used last year by the city during bond issue conversations.She also pointed out that the 30-space guarantee for the hotel was a 50-space guarantee last year.“The numbers have changed, and I don't know why,” she said. “And it would make a significant difference.”Smith said he projected last year that the garage would carry about a $90,000 debt that the authority would need to make up.

Board member Kirk Keys said it is important that the parking authority meet with the city and the redevelopment authority and find solid projections for the garage.“It's tough to make a decision on what to do if you don't have the numbers,” he said.Board member John Mossman said the parking authority felt pressured to make a decision at last month's meeting.“I think we all felt like we were put on the spot,” Mossman said. “We didn't want to delay or derail the Centre City project.”The authority last month said J.S. Capitol, the developer of the project, needed a parking plan before it would start construction of the hotel.Mossman said he was happy the authority rescinded the motion.“It was the right decision,” he said.Board member Jerry Johnson said officials can't afford to spend time trying to blame one another, but instead they need to solve the problems to get the hotel moving.“We just need to figure out how to pay for this without raising taxes and by keeping rates reasonable,” he said. “We can't scream at each other. We need to find a solution.”There is no date set for the special meeting between council and the authorities. City council meets 7 p.m. today.Representatives from J.S. Capitol did not return phone messages for comment.