The Charlotte Regional Visitors Authority recently ended a contract with Patrick Cannon’s former parking management company – a decision that could save taxpayers tens of thousands of dollars annually.
It also raises a question: Was the public shortchanged for years?
Since 2007, Cannon’s former company, E-Z Parking, held a no-bid contract to manage a city-owned surface parking lot near the NASCAR Hall of Fame.
Last year, the visitors authority paid E-Z Parking $130,335 to manage the lot.
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After bringing the job in-house, CRVA expects to spend about $48,000 annually. The tourism authority also spent about $20,000 in upfront costs to handle the parking on its own.
During the time E-Z Parking held the contract, Cannon, as a council member and mayor, was a political ally of CRVA and the city’s tourism industry. That ended when he was arrested on federal corruption charges in March 2014.
The tourism authority said this week that the contract hadn’t been awarded to Cannon’s former firm for political reasons. It also said the authority’s decision to terminate the contract, which occurred after Cannon’s prison sentence began, was not due to the former mayor’s arrest on federal corruption charges in March 2014.
“The (CRVA) underwent a major restructure to align functions such as marketing, accounting, human resources and more to work across the entire company,” said CRVA spokesperson Laura White in an e-mail to the Observer. “Areas such as third party contracts were identified.”
The old E-Z Parking contract was unusual in that, in addition to paying E-Z Parking’s documented expenses to manage the lot, CRVA also paid Cannon’s former firm a $1,200 monthly expense allowance.
The contract also gave the firm a 10 percent incentive bonus when monthly sales exceeded $7,500. That bonus was reached easily, as monthly revenues averaged almost $40,000 in 2014.
By 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 pays E-Z Parking’s expenses, but only $9,000 a year in management fees.
It’s unclear if CRVA’s internal cost projections of $4,000 a month in expenses will hold true over time. It’s also possible that the tourism authority will not have the expertise to generate as much revenue as E-Z Parking did.
White said it’s possible costs could increase. One factor is that CRVA may attempt to make the Caldwell Street lot compatible with the nearby NASCAR Hall of Fame parking deck that it has always managed in-house.
That could increase costs, she said.
But if CRVA’s projections hold, the tourism authority would spend around $260,000 to manage the lot over the next five years – a savings of around $400,000.
That money could be spent marketing the city or as incentive money to bring conventions to Charlotte.
Company founded by Cannon
E-Z Parking was founded by Cannon and his former partner, Jeff Feemster, in 1998.
Before Cannon’s arrest on federal corruption charges in March 2014, the company managed 16 public lots and decks, mostly in the center city. They totaled about 25,000 spaces.
After Cannon started a 44-month prison sentence in November, E-Z Parking announced that Cannon had sold his share of the company to Feemster. In March Feemster died, and his widow, Sophia Page, now owns the company.
In October, CRVA said it was studying ways to bring the contract in-house. The E-Z Parking agreement was a month-to-month contract, and the CRVA was able to sever ties with the company earlier this year. It started managing the lot April 1.
E-Z Parking also recently lost a contract to manage a parking deck for Carolinas Medical Center.
CRVA is a taxpayer-supported organization that promotes Charlotte and works to bring special events and conventions to the city. It also manages city-owned facilities such as the NASCAR Hall of Fame, Charlotte Convention Center and Bojangles’ Coliseum.
It is supported in part by a hotel/motel tax and a 1 percent tax on prepared food and beverages levied inside Mecklenburg County.
The 330-space lot is on Caldwell Street across from the NASCAR Hall of Fame. E-Z Parking was given the contract in 2007 under former CRVA chief executive Tim Newman.
In 2011, Newman’s management style was called into question by former Mayor Anthony Foxx, who led an effort to withhold money from the CRVA unless the board demoted Newman.
Cannon, then a council member, voted against that effort.
Newman was replaced as CRVA chief executive by Tom Murray in December 2011.
Murray, who is still in charge, oversaw the end of the E-Z Parking contract.