Appeared in “CommonWealth Magazine”
Authority says agreement will make the agency “whole”
THE MBTA IS EXPECTED TO COLLECT $4.5 million as part of a legal settlement with its former parking lot operator, whose employees allegedly stole money from the T over a three-year period.
The settlement agreement apparently was completed on Friday, but the deal hasn’t been finalized because the operator, LAZ Parking, has yet to sign it. Word of the settlement leaked out on Tuesday, after LAZ saw a $9 million contract in Pasadena, California, snatched away at the last minute when a competitor raised concerns about the parking thefts. LAZ did not disclose the size of the settlement, but T officials confirmed the broad outlines of the deal late Tuesday night.
John Englander, the general counsel for the MBTA, said the transit authority has agreed to withdraw its lawsuit in exchange for a payment of $4.5 million from LAZ. Englander said he was glad the two parties were able to resolve their differences and the T “was made whole.” He also said the settlement demonstrates how the T will holds its contractors responsible for the work they do.
The T and LAZ have acknowledged that parking money was stolen, but they have been at loggerheads for months on how much. In its lawsuit against LAZ, which was filed in May, the T did not specify how much it was owed. However, Englander said at the time said that the amount ran to “several million dollars.”
LAZ was hired in 2013 to run the T’s parking operations in return for monthly fees that yielded about $10.5 million a year. Concerns about parking revenue theft first surfaced in April 2016 when CommonWealth reported that a routine comparison of vehicle counts and parking receipts at the North Quincy Station parking lot uncovered discrepancies. LAZ subsequently terminated two employees in connection with alleged thefts and transferred a third to a position without cash-handling responsibilities.
The T put its parking lot business out to bid last year, and LAZ participated in the bidding process. Ultimately, the T hired Republic Parking System of Tennessee and LAZ’s contract with the transit authority was formally terminated on March 31, 2017.
LAZ officials declined to comment on the settlement Tuesday, but they issued a statement to media in Pasadena on Tuesday confirming that a settlement had been reached in connection with alleged thefts by a few low-level employees. It was unclear why the employees have not been prosecuted for the thefts.
The settlement disclosure came after LAZ emerged as the leading candidate to manage a series of garages in Pasadena. Just before the contract was about to be awarded, a rival bidder presented news articles about the alleged Boston-area parking thefts to the Pasadena City Council. Council members then put the vote on hold and decided to conduct an internal review of the entire contracting process. That review, which may take three months, could result in the hiring process starting again from scratch or the contract being awarded to LAZ or one of its rivals, officials said.