After calling a proposal to extend two city parking garage leases “strange,” the Board of Supervisors budget committee on Wednesday postponed a vote and demanded more answers from the San Francisco Municipal Transportation Agency.
The City Controller’s Office had advised in an audit that the transit agency stop having nonprofits manage its parking garages, yet it still proposed 10-year leases to continue using the model for the Japan Center and the Sutter Stockton garages.
Supervisor Carmen Chu, the committee chairwoman, said the leases proposal “gives me heartburn” because while the agency is terminating the nonprofit model in other garages, “a very different standard” is being applied in these cases and without a clear rationale.
City Controller Ben Rosenfield called the nonprofit arrangement “unusual.” He explained that the business model began “when nonprofit corporations were established for the purposes of issuing bonds that were used to construct these garages.” The bonds have since been paid off and the agency now has its own financing authority.
In 2011, an audit found that the nonprofit arrangement cost The City $551,070 annually.
Bob Hamaguchi, who sits on the board of directors that oversees the Japan Center garage, said continuing with the current arrangement is important.
“There is an ongoing need to support the existing small businesses and micro-businesses, and I think this garage corporation serves a very important role in doing that,” he said.
The committee asked the transit agency to return Feb. 13 with a fuller and more convincing argument for continuing the nonprofit model.