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Early last year, Fred Bekele, owner of Convenient Parking, scraped together $200,000 in bank loans to take his small business big time. He partnered with the Vancouver-based ImPark, a giant firm with 240,000 parking spaces in 60 cities in North America and Asia. The resulting joint venture submitted the best bid last summer to manage six of the most lucrative city-owned garages.
But after his bid came out on top in September, Bekele waited months for a contract that inexplicably never came.
Now, the Metropolitan Transportation Agency has announced that it is throwing out all bids and starting over again within the next two weeks. Bekele alleges this is because losing bidders engaged in influence peddling.
There are reasons to believe something was not quite right about MTA chief Nat Ford's decision-making. Internal documents suggest he made moves toward throwing out the bid just as he was being asked to do so by a politically connected attorney hired by Pacific Park Management, which stood to lose control of the 639-space St. Mary's Square Garage in the Financial District.
"There's really something very strange and uncomfortable about what's going on with this contract," says MTA board member Bruce Oka. "I have no recollection of ever telling Ford it's okay to change that contract. ... I asked him, 'When did we do that?' Ford evaded me. He wouldn't give me a straight answer. I can tell you this, without fear of contradiction: I don't feel the majority of the board right now is happy with Nat Ford." Ford's spokesman, Murray Bond, said he couldn't tell me why the bids were thrown out.
Bekele believes his business plans began to go awry at a 2009 New Year's Eve meeting at the Ferry Building penthouse office shared by attorney Steven Kay, who has a reputation for wielding political influence, and Willie L. Brown Jr., Inc., the the ex-mayor's lobbying firm, which has been represented by Kay.
At the meeting were Bekele, his lawyer, and an ImPark representative; officials from Pacific Park Management, which had retained Kay; and Scott Hutchison, an executive with Five Star Parking, which was poised to lose control of the Golden Gateway Garage, also in the Financial District.
Pacific Park Management runs 19 parking facilities around the Bay Area, including St. Mary's Square, whose contract was also scheduled to be rebid.
Five Star Parking is part of the Los Angeles–based, 5,500-employee L&R Group, which manages parking facilities in 33 cities, including the Moscone Center Garage and the Golden Gateway Garage.
Five Star has had a troubled history in San Francisco. In 2007, investigators from the city attorney's office said they had uncovered evidence that the company and its employees had skimmed garage revenues and submitted inflated expense reports. Five Star agreed to pay a $4.6 million settlement.
Of the people in Kay's office that day, Bekele was the smallest player. His company managed three city-owned parking facilities in the Mission, SOMA, and the Marina, with a total of 557 spaces. Winning the contract to manage some of the city's biggest parking garages would have transformed his small business.
In April 2009, MTA had put the management of its garages out to bid and set up a process whereby there would be three winners. The one judged to offer the most attractive deal for the city would get to manage the choicest package of garages, including Golden Gateway and St. Mary's Square.
Five Star and Pacific Park Management placed second and third respectively, and were to receive contracts to manage smaller groups of garages elsewhere in the city.
At the Dec. 31 meeting, the also-rans seemed determined not to let go of their local crown jewels. "We asked, 'What are you proposing?'" Bekele recalls.
The proposal, Bekele alleges in a complaint to the MTA and in testimony and letters to the Human Rights Commission and members of the Board of Supervisors, was a political shakedown.
Kay's client, Pacific Park Management, wanted to keep St. Mary's Square, its Financial District prize. Five Star didn't want to give up Golden Gateway.
Bekele claims that at the meeting, Hutchison threatened that, unless Bekele and his partners agreed to give up Golden Gateway, the contract award would be delayed, or even cancelled.
According to Jeff Ogle, ImPark's general manager, Hutchison said there would be consequences if the Convenient Parking/ImPark venture refused to give up the two Financial District garages. "Scott Hutchison said, 'Here's the way it's going to work: We can stall this indefinitely. To move forward, I'll get to keep Golden Gateway,'" Ogle recalls.
Neither Hutchison nor Kay returned calls requesting interviews. But I received a call from Sam Singer, a crisis communications consultant who said he spoke for Kay. Singer described the Dec. 31 penthouse meeting as a constructive dialogue rather than a political shakedown.
"The meeting was to have a discussion ... to try to figure out what would be a smart and successful way for all three businesses to apportion those contracts to each other," Singer says.
The plan was to meet with Ford on Jan. 4 to seal the deal, Bekele said.
At the Jan. 4 meeting, Bekele recalls Ford speaking as if he'd been tipped off about the meeting at Kay's office. Ford said he understood the parking companies had "been talking," Bekele recalls, and was pleased they were "all in agreement." But Ford said he had to check with MTA staff first to see whether the garage-trading deal was permissible under contracting rules.