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Pasadena City Council Rejects LAZ Parking
News Oct 24, 2017
– Photos courtesy of Chabad of Pasadena
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Council’s decision to reject LAZ Parking defied Pasadena’s long-time objective of consolidating management of the city’s parking garages. – Photo by Terry Miller / Beacon Media News
Parking management group’s litigation history proves too controversial
By Gus Herrera
At their latest regular meeting, the Pasadena City Council rejected a three-year, $9.37 million contract with LAZ Parking (LAZ) to manage eight out of the nine city-owned parking lots.
Council’s decision was heavily influenced by LAZ’s recent multi-million-dollar legal settlement with the Massachusetts Bay Transit Authority (MBTA) – a controversy which seemingly outweighed the city’s long-time objective to consolidate management of the city’s parking garages.
The matter originated in 2013, when an audit recommended that Pasadena directly oversee its garage revenue functions. The city then requested bids to oversee management, operation, and maintenance of the following garages: Paseo subterranean, Marengo, Los Robles, Holly Street, Del Mar Station, Schoolhouse, Delacey, and Marriott.
LAZ was subsequently rated as the highest proposer by city staff, but, when the item came before council on July 24, Council Member Victor Gordo circulated newspaper articles revealing that LAZ was in the midst of a legal battle with the MBTA.
“[This] appears to be a systemic issue … this isn’t an employee with sticky fingers,” said Gordo.
Unsettled by Gordo’s revelations, council directed city staff to “re-review” the matter and request any additional information necessary from the proposers.
Following the re-review, a panel formed by City Manager Steve Mermell once again recommended that the contract be awarded to LAZ, claiming that “LAZ Parking distinguished itself above all of the other proposers by providing specific recommendations for improvements to parking operations in each of the eight garages,” according to staff’s report.
Staff’s report also claims that the internal review was “satisfied” with the additional details/explanations provided by LAZ and that all but one of the proposers reported litigation histories, “[it’s] part of the nature of the industry,” said Brenda Harvey-Williams, finance and management services administrator.
Despite staff’s recommendations, the majority of council remained unconvinced that LAZ should be awarded a multi-million-dollar contract, citing the city’s recent struggles with embezzlement.
“I’m troubled by where we find ourselves … I’m disappointed with what the staff has come back to us with … I have as many questions as I had the last time this matter appeared,” said Gordo.
Vice-Mayor John Kennedy also struggled to trust city staff’s due diligence, questioning how they failed to report LAZ’s legal battle back on July 24, “it makes it difficult … for me to have confidence … in the investigation staff undertook as it relates to this particular possible award,” he said.
“I’m not comfortable awarding this to LAZ,” said Council Member Andy Wilson (center), who considered LAZ’s litigation history “too checkered” for him to look his constituents in the eyes. – Photo by Terry Miller / Beacon Media News
According to a statement released by Massachusetts Attorney General Maura Healey (dated July 31), LAZ failed to “detect and deter” the theft of millions of dollars in MBTA revenue.
“LAZ employees skimmed millions of dollars in cash from MBTA parking facilities, robbing the public of funds we need to invest in transportation,” said Attorney General Healey.
Healey’s office also alleged that LAZ “submitted false daily revenue reports and monthly audits, and falsely certified monthly invoices … ”
LAZ subsequently agreed to pay the commonwealth of Massachusetts $1.1 million and the MBTA $4.5 million to settle the lawsuit.
Several of members of LAZ leadership flew in from all around the country to plead their company’s case, arguing that fault in the MBTA case could be attributed to a handful of “rogue employees.”
But, in the end, council remained uncomfortable awarding the contract to LAZ and voted instead to extend the city’s current contract with the two parking management companies, Parking Concepts Inc. and Modern Parking Inc., for one year.
“I’m not comfortable awarding this to LAZ,” said Council Member Andy Wilson, who considered LAZ’s litigation history “too checkered” for him to look his constituents in the eyes.
Following the one-year extension, city staff will be tasked with recommending one of the two current contractors for consolidation of the parking garage management.
The motion was approved 6-2 with Council Members Margaret McAustin and Gene Masuda in opposition.
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