Scranton officials outline parking debt restructure, propose extended enforcement and capital set‑asides

City of Scranton staff and the city’s parking operator presented a package of proposed changes to the city’s parking concession agreement and a related debt‑restructuring plan at a City Council meeting to avoid a potential default on parking bonds and to fund long‑deferred garage repairs.

The presentation, led by the city’s financial adviser Scott Shear of PFM, said AllianceBernstein — the current bondholder — has agreed in principle to a deal that would reduce outstanding parking debt from about $45,000,000 to about $30,000,000, with interest rates in the expected range of 5.75 percent to 6.75 percent. The plan would include three years of interest‑only payments, principal payments beginning in 2029 and a final maturity stretched to 2070 to lower annual debt service in the near term.

Shear said the restructuring is intended to preserve an affordable downtown parking rate structure that the council approved after the pandemic and to create a predictable capital reserve for garage maintenance. “We didn’t want to raise rates just to pay the bills,” Shear said, describing the goal of maintaining lower garage rates to attract long‑term parkers off street parking.

Why it matters: the city has been using reserves to cover operating costs and, without a restructuring, staff said those reserves would not cover future debt service. The proposed transaction was described as necessary to avoid a default, reduce the bondholder’s exposure and secure funding for capital repairs and ongoing preventive maintenance of downtown garages.

Key provisions discussed

- Debt reduction and term structure: staff said AllianceBernstein would accept a reduction of the amount outstanding from roughly $45 million to about $30 million; interest only for three years with principal beginning in 2029 and maturities extended to 2070…