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Cannon’s parking business and public role intersect

  • http://media.charlotteobserver.com/smedia/2013/10/15/21/45/Y1HUC.Em.138.jpeg|316
    T. Ortega Gaines - ogaines@charlotteobserver.com
    While on City Council, Patrick Cannon has been chief executive of E-Z Parking, which manages uptown parking lots.
  • http://media.charlotteobserver.com/smedia/2013/10/15/21/45/YMa6c.Em.138.jpeg|209
    DAVID T. FOSTER III - dtfoster@charlotteobserver.com

Since 2010, Charlotte city councilman Patrick Cannon has faced at least three votes in which the city’s business intersected with his own business, a parking management company.

Cannon, a Democratic mayoral candidate, recused himself from two of the votes, citing a potential conflict of interest.

But in a third, Cannon threw his support behind giving the Charlotte Regional Visitors Authority $7.5 million for marketing in 2011.

Cannon’s company, E-Z Parking, has a no-bid contract with the CRVA to manage a 330-space parking lot on Caldwell Street, across from the NASCAR Hall of Fame. Last year, a CRVA report shows the tourism authority paid E-Z Parking $72,144 in fees and incentives, in addition to documented expenses.

In a statement to the Observer, Cannon described the CRVA vote as a unique situation that allowed him to vote. City Attorney Bob Hagemann agreed that Cannon’s CRVA vote does not violate state conflict of interest law.

But Cannon’s vote came at a crucial time for the CRVA.

Mayor Anthony Foxx was opposed to releasing the money and wanted to keep the $7.5 million as leverage to force the tourism authority board to remove then-director Tim Newman.

Cannon voted to release the money, but he was on the losing end of a 7-4 vote. Newman was later forced out.

Two years later, Cannon’s contract continues with the CRVA. An examination of two other parking contracts raises questions about whether the tourism authority could get a better deal for taxpayers if it put the contract out for bid.

The CRVA-operated NASCAR Hall of Fame has lost more than $4 million since it opened in 2010, and the City Council recently took tens of millions of dollars from the CRVA’s Convention Center reserves to give to the Carolina Panthers.

Cannon, who is the mayor pro tem of the council, said he would welcome the CRVA to put the contract out to bid.

“That’s a decision they have to make,” he said. “Typically when a client is pleased, they don’t let the company go.”

Among the provisions E-Z Parking receives in the contract: a $1,200 monthly expense reimbursement, even though its expenses are already paid by the CRVA. In addition, the management company receives a $2,000 monthly management fee and a 10 percent incentive bonus when monthly sales pass $7,500.

Last year, E-Z Parking met that threshold easily, as the lot’s gross revenues were nearly $439,000.

For comparison, E-Z Parking has a less lucrative contract with Charlotte Mecklenburg Libraries to manage a garage at ImaginOn, a children’s library and theater. Under that contract, the library system pays E-Z Parking’s expenses, but only $750 a month in management fees, or $9,000 a year.

Business, politics intersect

Cannon has long been an ally of the city’s hospitality industry and the CRVA. He has received significant campaign contributions from hoteliers, restaurant owners and CRVA board members.

Cannon has said in the past that he hopes contributors aren’t seeking special treatment and that campaign money doesn’t influence how he votes on the council.

The CRVA parking contract is one of several in which Cannon’s business interests naturally are connected to City Council business. His company manages 25,000 spaces in Charlotte.

Some city actions are meant to bring people uptown, through projects such as helping the Carolina Panthers financially, building the NASCAR Hall of Fame and building a new stadium for the Charlotte Knights baseball team.

Cannon allowed himself to vote in favor of giving the Knights $8 million for the stadium because he doesn’t have a parking contract with the team. He manages a handful of surface lots within a few blocks of the stadium.

Republican mayoral candidate Edwin Peacock is a financial representative with Northwestern Mutual. Peacock says his company does no business with the city.

How N.C. law factors in

State law says that elected officials are compelled to vote, unless they have a direct financial interest in the outcome.

Hagemann and Bob Hall of Democracy N.C., an open government group, said a common interpretation is that an elected official must have a “unique” financial interest in an outcome to avoid voting.

Hagemann said a teacher who is an elected official could clearly vote on a pay raise for all teachers, just as a city council member could vote on a property tax decrease or increase that would impact all property owners.

In addition, Hagemann said, state law would prohibit an elected official from awarding a contract to a business in which the council member had at least a 10 percent interest in that company.

Recusals, votes

Twice, Cannon handled potential conflicts by recusing himself:

• In 2010, Foxx wanted to give the library system $1.4 million in emergency funds to ease the impact of county budget cuts.

Cannon said recently the library vote was about “facility operation, which includes parking.” Since that was a direct benefit to his ImaginOn parking contract, he asked to be recused.

• Earlier this year, when the City Council voted to give the Panthers money, Cannon asked to be recused because E-Z Parking has a contract with the team to provide game-day parking.

In 2011, then-Mayor Foxx pushed council members to withhold $7.5 million in marketing money from the CRVA to make the authority’s board remove Newman. The director was under fire for inflated attendance at the NASCAR Hall of Fame and his expense account spending, among other issues.

Cannon, whose company had held the Caldwell Street lot contract since 2007, opposed withholding the money. During a meeting, he said the move would hurt the city’s efforts to attract conventions and said it would hurt small businesses. He said the city needed to focus on things such as job creation and not “Romper Room issues,” referring to the CRVA controversy over Newman.

Cannon and City Attorney Bob Hagemann told the Observer the CRVA vote was different from the Panthers vote because there was a possibility the NFL team might leave if the city didn’t approve the incentives.

Whether or not the CRVA got its marketing money, the tourism authority was not leaving, Cannon said. “It didn’t conflict with my ability to vote on the matter,” he said.

Cannon said the CRVA and library votes were different because the CRVA decision was a “marketing contract and had nothing regarding parking.”

Marketing money for the CRVA, however, is used to attract people to the NASCAR Hall of Fame and the Convention Center, which could bring motorists to the Caldwell Street lot.

Client is pleased

Roger Stacks of Preferred Parking, a competitor, said he has never seen a contract similar to the CRVA agreement for the Caldwell Street lot. He said his company would likely bid on the CRVA lot if it opened up.

“That’s a good contract,” said Roger Stacks of Preferred Parking. “I wish we had that one.”

The parking lot business is seen as highly competitive. The city of Charlotte’s contract to operate its parking deck across from the Charlotte-Mecklenburg Government Center shows how small profit margins can be.

The city’s contract with Central Parking calls for the city to pay the company documented expenses, plus a management fee of one-tenth of a percent of gross revenues minus expenses. Last year, that totaled just under $60.

E-Z Parking first began working with the CRVA for 12 years ago to manage several lots, said CRVA spokesperson Laura Hill.

She said new CRVA chief executive Tom Murray hasn’t reevaluated the contract “because of the potential sale of the land or possibility for a real estate transaction.”

Hill said the CRVA follows North Carolina law for bids, but that the state doesn’t require competitive bids for “service contracts not involving the purchase of a product.”

Harrison: 704-358-5160
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