Drama Continues: Council Rejects Controversial $9 Million Parking Lot Contract

Following an often tense two-hour discussion in which company owners pleaded with Councilmembers to embrace a City staff recommendation, the Pasadena City Council rejected awarding a $9 million-plus contract to Hartford, Connecticut-based LAZ Parking Services to manage and operate The Paseo Subterranean, Marengo, Los Robles, Holly Street, Del Mar Station, School House, Delacey, and Marriott parking garages, in and around Old Pasadena.

Instead — acting on a suggestion by Mayor Terry Tornek — the Council approved a motion to retain one-year contracts with Modern Parking, Inc. and Parking Concepts, Inc.—both of whom are currently managing the parking lots—and then to discuss consolidating to one vendor at the end of the one-year period.

It was the second roadblock for LAZ Parking at the Council chambers in two months.

LAZ had twice earned the highest recommendation from Pasadena City staff among five vendors, facing off against Modern Parking Inc. and Parking Concepts, among other contenders.

The first time the LAZ contract went before the Council on July 24, it was agendized among consent calendar items which are routinely  approved, but the vote was derailed when Gary Pitts, president of Modern Parking, told the Council that LAZ had been released from its contract with the Massachusetts Bay Transportation Authority (MBTA) in 2016, following an MBTA investigation into parking revenue fraud.

The vote was postponed. The potential contract was put “on hold” and a new round of proposals from the same five vendors was undertaken.

In August, LAZ reportedly agreed to pay $1.1 million to the Commonwealth of Massachusetts and an additional $4.5 million to the Massachusetts Bay Transportation Authority. LAZ President Jeffrey Karp said in a statement, “After review by third party auditors, and on mutual agreement with the MBTA, LAZ acknowledges the alleged theft by three dishonest employees at a limited number of these parking lots.”

Massachusetts Attorney General Maura Healey confirmed the events in a statement announcing the settlement, “LAZ employees skimmed millions of dollars in cash from MBTA parking facilities, robbing the public of funds we need to invest in transportation.”

At least four founders or partners of LAZ Parking flew in for last night’s Council meeting, including Chairman and CEO Alan Lazowski, founder Michael Harth, President Jeffrey Karp, and Chief Operating Officer Michael Kuziak.

Lazowski first introduced himself as the child of Holocaust survivors, and told the Council that his father worked as a public servant in Hartford for 62 years.

“I care deeply about honesty, integrity and trust,” Lazowski told the Council.

Lazowski said when questioned by Councilmember Victor Gordo that the assertions made by the Massachusetts Attorney General were true, but later minimized the accusation, saying that the number of lawsuits garnered by the company, given the vast amount of total transactions it conducts, was, “not a bad percentage.”

He also said LAZ Parking is no longer used as a vendor by the Massachusetts Bay Transportation Authority.

“How can we be sure that this won’t happen again?” Councilmember Gordo asked Lazowitz, pointedly. “You were hired to protect those assets.”

Gordo also distributed printed East Coast newspaper accounts of LAZ’s $5.6 million settlement to his fellow Councilmembers before the meeting.

“I think this is the best company in the world,” Lazowski insisted, “not just among parking companies, but any company.”

He blamed “rogue employees,” for the MBTA suit, and the fact that MBTA did not implement changes that his company had suggested.

Adding to that theme, COO Kuziak said, “‘Honesty, integrity and respect’ are the words that the company is guided by. That’s on the walls of our office.”

The Boston Better Business Bureau rated LAZ Parking 2.11 stars out of a possible five, for an overall grade of “C.” Its website cited 18 complaints, along with the Massachusetts Bay Transportation Authority lawsuit.

“The facts in this meeting make it difficult for me to move in the direction of the staff’s recommendation,” said Vice-Mayor John Kennedy.

Councilmember Andy Wilson agreed, saying, “I’m not happy, and I’m not comfortable awarding this contract, especially given (LAZ’s) ‘checkered track record.’ I have to look my constituents in the eye with this.”

Councilmember Gene Masuda was clearly frustrated with having to vote against LAZ, as was Councilmember Margaret McAustin.

“I’m frustrated,” said Masuda, “because, I don’t know where we will go after this.”

“I think LAZ will give us the best management,” said McAustin. “They’ve been here twice, and have won the highest score each time.”

Finally, Mayor Tornek told the Council, in suggesting his motion, “The bidders are all qualified, but there is a lack of confidence here.”

The motion to extend the current contracts was passed, 6-2, with McAustin and Masuda voting against it.