Two city authorities are at odds over who should be responsible for providing public parking as part of the Centre City project.

The parking authority on Sept. 24 decided to build a 75-space surface lot instead of a 225-space parking garage because of the cost of the garage. The decision has angered business owners in the neighborhood, who are now petitioning the city and the authority to have the garage built.

But the parking authority said it is not to blame for the lack of public parking. Instead, the parking authority claims it is the responsibility of the city redevelopment authority to pay for at least a portion of the spaces of a garage.

Jim Chiprean, parking authority chairman, said the redevelopment authority owes his board 137 parking spaces, stemming from a city resolution made in 2007. The spaces were in the lot where the Marriott Springhill Suites hotel will be built.

The parking authority signed away that property to the redevelopment authority for development of the Centre City project, which will include the hotel and a Rite Aid pharmacy already under construction. Chiprean said that was done on the condition that the redevelopment authority would replace those spaces lost in the new garage.

“They still owe us those 137 spaces,” Chiprean said.

The parking authority sent a letter to Mayor Tom Donaldson Thursday night requesting the city to intercede on its behalf and require the redevelopment authority to fulfill the obligation.

Chiprean said in the letter that the redevelopment authority has the means to meet the obligation by either selling its 40 percent interest in the hotel or by pledging its equity in the project as collateral to borrow sufficient funds to develop the 137 parking spaces.

Chiprean wrote there is no preference whether the redevelopment authority provides the spaces as a surface lot or as a deck, but asked the redevelopment authority to provide a plan by the parking authority's next meeting Oct. 22.

Art Cordwell, the executive director of the redevelopment authority, said the city waived his authority's obligation to providing the parking years ago on the basis that the redevelopment authority could not afford the investment of parking.

“The mayor and council at the time said this is a citywide project and that each of the authorities had to work together to make it work,” Cordwell said at the redevelopment authority's meeting Thursday. Cordwell had not seen the letter at the time of the meeting.

The redevelopment authority is struggling financially, and owes money on both the Penn Theater and Kelly Automotive Park. Cordwell said it has no money to put toward parking.

The status of the redevelopment authority is one of the reasons the parking authority said it is wary to take a financial risk on a $4.5 million parking garage.

The cost of the parking garage was estimated using an industry standard of $22,000 per space, although Chiprean said he thinks the price could be lowered to about $19,000 per space.

The parking authority estimated the bond issue to pay for the garage would cost the authority an extra $100,000 per year, which it would have to make up through citywide rate increases and other measures.

The surface lot is estimated to cost about $450,000 and yield about $15,000 in annual revenue for the authority.

Those estimations are based on a 50 percent occupancy rate in the hotel.

City clerk Mindy Gall said she was unfamiliar with an amendment to the original 2007 agreement, and was unable to locate any documentation of a waiver late Thursday afternoon.

Parking authority and city Treasurer Jeff Smith said he is unaware of a waiver as well, but said he didn't see how council would have the ability to cancel the agreement without giving the property back to the parking authority.

“The redevelopment authority has an obligation to repay that parking,” he said. “And if it cannot do that, it should return the property.”

That property is set to be sold to J.S. Capitol Construction for about $300,000. Cordwell said nearly all of that money will go straight to paying off outstanding mortgages on the property.

The redevelopment authority also received about $675,000 from J.S. Capitol for the land on which the Rite Aid pharmacy is being built. Again, nearly all of that money went to paying off mortgages on the property, Cordwell said.

The redevelopment authority made a profit of about $17,000 on the Rite Aid property and will receive about $10,000 from the hotel lot — not nearly enough to finance a parking garage.

Donaldson, who was at the redevelopment authority meeting Thursday, said there is no good solution to the problem.

“No matter what is done, somebody is going to be upset,” the mayor said. “But the city's priority is protecting its taxpayers.”

Donaldson also had not seen the letter at the time of the redevelopment authority meeting.

Donaldson said he wasn't aware of an amendment to the 2007 resolution transferring the property. However, Donaldson acknowledged the redevelopment authority isn't in a position where it could afford to pay for additional parking.

Smith said the redevelopment authority's contribution to parking may fall outside the lines of the Centre City project.

“We realize that may not be possible at this time,” he said. “But the parking authority does not insist that those spaces be on site.”

Chiprean said his ideal solution would be to build a 150 space, two-tier deck for about $2.5 million to $3 million. The authority paid $1.8 million to construct a two-tier deck on South McKean Street about a decade ago.

“If it were up to me, I'd build it today,” Chiprean said of a Centre City deck.

However, Chiprean said the authority cannot do that without the blessing from the city.

Donaldson said the city is not in position financially to be risking taxpayer's money on parking that may not pay for itself.

Smith said the authority is continuing to look for plots for other surface parking to help make up for the spaces lost to the project.

He said the redevelopment authority owns an empty lot across Main Street from the Rite Aid that could potentially be turned into a small lot.

While there is debate over the parking, Smith said he doesn't expect any legal action will need to occur.

“These are three different municipal agencies,” he said. “But they all work within the city. Hopefully they can work together and live up to their obligations.”

Smith said he doesn't know how the redevelopment authority would pay for the spaces. He said it could use its standing as a 40 percent owner of the hotel.

“The redevelopment authority is in the business of developing property,” he said.