Lots of Trouble

It's not every day that a single vote of Portland's City Council severs an 18-year contractual relationship with Portland's most powerful business group, fuels one of the city's bitterest family feuds and scores an historic first in local racial politics.

But that's what happened on May 24.

At the center of the action was Barry Schlesinger, who sat at the front of the City Council chambers fidgeting with his tie as if he'd never worn one before, his hair frizzing in the late-spring heat wave. Schlesinger, 54, was seeking a contract to manage the city's six parking garages.

He knew that he and his partners, a team representing the local African-American, Hispanic and Philippine-American chambers of commerce, had submitted the best bid for the management contract.

But he was even more aware of the clout of his competitors, the Portland Business Alliance and its key backer, the Goodman family. Since 1985, the Portland Business Alliance and its predecessor, the Association for Portland Progress, had held the lucrative contract to manage the city's garages, which involves handling custodial, security, marketing and other administrative tasks. Over the same period, first APP and later the city routinely awarded the Goodmans' company, City Center Parking, a separate contract to operate those Smart Park garages--mainly collecting money.

More than a desire for the city contract motivated Schlesinger; animosity for the Goodmans lies just beneath his normally placid exterior.

For decades, City Center Parking has been Portland's version of Microsoft. In most big cities, says John Van Horn, the publisher of the industry magazine Parking Today, at least a couple of parking companies hold significant market share.

But in this city, the Goodmans either own or operate about three of every four parking spaces in garages or surface lots, and, until very recently, they have faced no serious local competition. That dominance--and the political influence that goes with it--weighed heavily on Schlesinger's mind. "When I left the office the night before, everything told me rationally we would win," he says. "But based on previous experience, I got about two and a half hours sleep."

In Portland, there is no clearer example than City Center of an enterprise whose power and profits derive from skillful navigation of the city code and cozy relationships with city commissioners. But on May 24, in a 5-0 vote, the council signaled clearly that it is no longer a pawn of the Goodman empire by awarding the five-year, $4.35 million management contact to Schlesinger and the minority business groups.

The Goodmans still retain a much smaller contract to operate these same garages, but people in the parking and real-estate businesses say the council's decision cements Star Park's status as the first legitimate local competition City Center has ever faced. "It breaks the stranglehold that the Goodmans have had on downtown parking," says Pearl District developer Al Solheim.

The Goodmans have controlled Portland parking for decades. A 1993 City Club report stated, "City Center Parking not only operates all City of Portland public parking lots, but owns or operates substantially all of the privately owned garages and lots in downtown Portland as well."

For years, a large map of downtown covered a wall in City Center's offices. More than 100 pins dotted the map, with one color for lots the Goodmans owned and another for lots or garages they managed for others.

As profits rolled in, pins indicating ownership increased steadily over time. "Not only was it a monopoly, but it was a cash-business monopoly," says local real-estate investor Bob Scanlan. "Other than drug dealers, it doesn't get much better than that."

City Center president Greg Goodman won't divulge details about land holdings or his company's share of Portland's parking market, which could total more than $100 million annually. Goodman says the "vast, vast majority" of the lots City Center manages are owned by others, but he confirms that the surface parking lots the family owns make them downtown's largest private land-owner.

Doug Goodman, City Center's founder, began parking cars while still attending Grant High School. He dropped out of the University of Washington, but that didn't stop him from building, one car at a time, a fortune some say could approach $300 million. Now 69 and semi-retired, he divides his time between a Dunthorpe mansion built by city father Henry Corbett and a home in the California desert.

Goodman's sons, Greg and Mark, now run the business (which also includes Parking Management Company and U-Park). Both joined the business young. "When I was a little kid, I went downtown on weekends and counted quarters," says Greg Goodman. "It was great."

Like his father, Greg, 45, also dropped out of college, a decision he says he regrets. More civically active than his father was, Greg serves on the boards of Lewis & Clark College and the Portland Business Alliance and is president of Pioneer Courthouse Square. He recently wrote an Oregonian op-ed in favor of the Multnomah County income-tax surcharge and contributed $5,000 of City Center's money to the campaign.

Mark Goodman, 44, a University of Oregon graduate, tends to the nuts and bolts of the parking lots. The brothers share a taste for flashy cars--Greg drives a Ferrari, Mark a Mercedes AMG--and can often be seen together cruising the city and checking lots run by competitors.

The brothers learned from their father the leverage that market share provides. Most commercial buildings do not have enough parking to satisfy tenant demand. Landlords thus must contract with operators of nearby independent lots--usually the Goodmans--to secure additional spaces for tenants.

In exchange for giving a building owner the opportunity to lease precious parking spaces nearby, City Center often gets the right to operate the building's garage.

"If you were putting up a building and chose not to [let the Goodmans operate your garage] you'd have an awfully hard time finding space for your tenants," says Barton DeLacy, a real-estate appraiser.

City policies have also paved the way to City Center's success. From 1975 until 1997, Portland maintained a cap on the number of downtown parking spaces, even as the metro area's population increased by 50 percent. The cap resulted from a federal order to improve downtown air quality, but it was also designed to encourage mass transit.

For the Goodmans, the cap was a boon. "The lid did act in some ways to prevent competition," says Gerard Mildner, an associate professor of urban studies at Portland State University.

Greg Goodman , however, says that for most of the time the cap was in place the number of spaces was well below the limit, leaving ample opportunity for competition.

Competitors disagree: "That cap kept everyone else out," says Jonathan Diamond, of Seattle's Diamond Parking, which operates a handful of facilities in Portland. "It might have started for environmental reasons, but I think part of the reason it lasted so long was the Goodmans' great political clout."

While the parking cap was rigidly enforced, another policy proved more malleable. The 1972 Downtown Plan called for the phasing-out of surface parking lots, the Goodmans' cash cow. That did not happen. "The Goodmans lobbied for renewal of their permits, and then they lobbied to have the surface lots grandfathered," explains former chief city planner Michael Harrison.

The net effect of the policies? First, as intended, a higher percentage of Portland commuters pay to park than in nearly any other big city. But parking is also expensive relative to land values.

ECONorthwest economist Randall Pozdena says policymakers may not have realized the windfall they helped create. "In any other setting, the government would have instituted an excess-profits tax to make sure [its policies]
didn't confer some giant benefit on somebody," he says.

The Goodmans' desire to keep competitors out of their business resulted in one of the most storied feuds in recent Portland history--and the symbiotic relationship between the Portland Business Alliance and City Center Parking.

For more than 25 years, Doug Goodman managed parking for his contemporary Ralph Schlesinger, a Portland developer. Like Doug Goodman, Ralph Schlesinger had only sons and had also brought them into the family business. Barry, the eldest, fished commercially for 10 years after graduating from Washington University in St. Louis. Paul, now 51, went to Whitworth College in Spokane, Wash., and Mark, 49, graduated from Art Center College of Design in Los Angeles.

In August 1993, Ralph Schlesinger had only a few months to live. His legs had already been amputated due to complications from diabetes. Strapped to a wheelchair, he sat flanked by his sons in a top-floor conference room of the Oregon National Building,which he owned.

Across the table sat Doug Goodman, accompanied by his sons. Ralph Schlesinger wanted to accomplish one thing before he died: He wanted to build a parking garage on land he owned at Southwest 6th Avenue and Alder Street as a legacy for his sons. The Goodmans were dead-set against it. "My father offered Doug whatever he could--a piece of the building, the right to operate the garage," Barry Schlesinger recalls. "Doug said 'no' and just walked away."

At that point, the lawyers took over. The Goodmans fought the new parking garage in zoning hearings, at City Hall and at the state Land Use Board of Appeals. The Schlesingers ultimately prevailed, but not before Ralph Schlesinger died in March 1994.

His sons pushed ahead with the garage, completing it in 1997.

But the bad feelings lingered. "The Goodmans came to me and asked if they could operate the garage," Barry Schlesinger recalls. "I made it clear that there was no way that was going to happen."

Instead, Barry and his brothers decided to compete with the family that had denied his father's dying wish. In 1997, the Schlesinger brothers established a company called Star Park to run the Alder Street garage. To run their parking company, they hired Virgil Ovall, once the Goodmans' top parking manager. Few believed that making money was their only motivation.

A decade after the summit meeting between the two families, the Goodmans and Schlesingers do not communicate, despite moving in similar circles and belonging to the same temple, Beth Israel.

"We don't really talk," says Barry Schlesinger, whose "I'd rather be fishing" demeanor darkens when he discusses the Goodmans. "If I see one of them on the street, maybe I'll acknowledge them or maybe I won't."

For Greg Goodman, the issue is less personal. "We don't have a relationship," he says simply.

"There's a lot of history there," says City Commissioner Erik Sten, who speaks frequently with both men.

In 2001, the Schlesingers' Star Park owned or operated only four lots. Today, it owns or operates 34, which comprise 3,700 spaces. That total is still less than 10 percent of the Portland market, but the company's aggressive expansion represents the first serious local challenge to the Goodmans' supremacy.

Last year, when the new Hilton Executive Towers opened on Southwest Taylor Street, the project's developer, the Melvin Mark Cos., chose Star Park to manage its parking lot. That was a significant departure, because for more than 20 years, the Goodmans had managed nearly every parking structure built by Mark, the largest owner of private garages in Portland.

Neither Greg Goodman nor Mark Development President Dan Petrusich would comment on the historic decision but in Portland real-estate terms, the choice of Star Park to manage a Mark property was the equivalent of McDonald's opening a new location that served Pepsi when their other 30,000 restaurants serve Coca-Cola.

Every day on corners around downtown, City Center and Star Park do battle. The competition is particularly fierce on the corner of Southwest 10th Avenue and Main Street, where the companies operate across the street from each other.

On a recent day, a Star Park attendant stood in the middle of the street cajoling drivers waiting to get into the City Center lot. This unusual competition is great for customers. At the two 10th Avenue lots, the Early Bird rate is currently $5.95, about two-thirds of some nearby lots. Monthly tickets are $125, $40 less than the City Center lot only two blocks away.

The battle rages at other spots as well. When the owner of the parking lot at Two Main Place decided to change management from City Center to Star Park in March, City Center didn't take rejection lightly. Instead, the company offered Two Main Place customers a month's free parking at any of City Center's six nearby lots.

In January, Goodman threatened Star Park and a parking-lot attendant and occasional supervisor named Mustafa Babiker with legal action after Babiker took a job with Star. Although Babiker was hardly top management--he was making $9 an hour at the time--City Center attempted to enforce a no-compete contract against the Sudanese immigrant. After bad publicity (see "Clash of the Parking Titans," WW, Jan. 29, 2003), City Center backed off.

Without a doubt, however, the biggest sign so far that the Goodmans' once-unassailable empire was under attack came when the City Council decided to award its garage-management contract to Star Park's team late last month.

The question on many people's minds is whether City Center will be able to hold onto its contract to operate the garages, now that the Schlesingers, rather than the Portland Business Alliance, are managing them.

City Center has operated the garages under the management of the Association for Portland Progress and the Portland Business Alliance since 1985, although some who have been involved in the bidding process question how fair it has been.

In 1995, for instance, a majority of the independent selection committee rated another competitor higher than City Center, but City Council voted to retain the company anyway. "I was just scandalized by the kind of corruption that this evidenced," says appraiser DeLacy, a committee member. "It destroyed my confidence in the way that the way business was done here."

In 2000, AMPCO, a national parking company which had expressed doubts about the openness of the city's bidding process, declined to bid for the garage contract. "This decision is as a result of our past experience bidding on this portfolio," wrote AMPCO marketing manager Leonard Carder.

Greg Goodman denies that his company has competed on anything less than a level playing field. "National parking companies competed for that contract, and we won fair and square," he says.

But the cozy relationship between the city, the Portland Business Alliance and City Center began to unravel last fall as relations deteriorated between Business Alliance CEO Kim Kimbrough and City Hall (see "Bulldog," WW, Feb. 12, 2003).

Last year, the city garages lost money for the first time in history. That fact, plus Kimbrough's abrasiveness, caused commissioners to scrutinize what had been one of the city's coziest deals. Last November, consultants found that the Business Alliance could save $1.6 million annually by managing the city garages more efficiently. Shortly thereafter, the City Council decided to see whether anyone else was interested in the contract.

That was bad news for City Center, given its close relationship with the Business Alliance. For Star Park, the Alliance's problems presented a fortuitous opening--and to level the battlefield, Schlesinger enlisted a secret weapon.

That warm May afternoon, as Barry Schlesinger sweated the council vote, his partner in the bid held court in the rear of the council chambers, a smile gleaming as brightly as his gold cufflinks as he schmoozed with a succession of high-level city bureaucrats and well-wishers.

You'd need all of your fingers and a couple of toes to count all of Roy Jay's business cards. Jay, 50, runs the African American Chamber of Commerce of Oregon, limousine companies, a catering operation and an ad agency, among other enterprises.

A 6-foot-4-inch, 265-pound human tornado, Jay is a full-time entrepreneur and sometime civil-rights leader. In 2000, he intervened in the attempted firing of Gresham High principal Paul Coakley, an African American, and organized a boycott of WW when John Callahan referred to the Patti Smith song "Rock & Roll Nigger" in a cartoon.

Jay first became involved in the parking industry in 2001 when he helped facilitate the unionization of Diamond's Portland operations. Last fall, when he and chamber colleagues Harold Williams and Jo Ann Bowman heard the city's garage-management contract might be available, they teamed up with the Hispanic and Philippine-American chambers of commerce.

For months, Jay and his team pored over thousands of pages of documents relating to the garages. Their winning bid will save the city $400,000 annually. "This was not about minority set-asides," Jay says. "We brought a lot of expertise, and maybe that took people by surprise."

Star Park and the minority chambers have structured a contract-management group that will include Barry Schlesinger, Ovall, a representative from each of the chambers and a non-voting representative from the city. Star Park will handle the day-to-day garage management.

On May 5, the city announced that the Star Park/minority-chamber group had submitted the best bid. But only days before City Council was due to ratify that finding, Chris Thomas, a lawyer who has represented the Business Alliance, filed a complaint on behalf of an "anonymous client," alleging that Star Park was operating its Alder Street garage improperly. "What an amazing coincidence," says Barry Schlesinger of the timing of the complaint. "It's hard to believe that the Goodmans or the PBA weren't behind it." City Council ignored the complaint.

Starting July 1, Star Park takes over management of the city garages. That's a momentous change, but it's not the end of the story. The way the management and operations contracts are structured, City Center will now be answerable to Star Park for its work on the city garages. That means that at least for a while, Greg Goodman will report to Barry Schlesinger. It will be as if George W. Bush were suddenly taking orders from French President Jacques Chirac.

Goodman vows to cooperate, but last week he appeared to be sticking his thumb in Schlesinger's eye when he hired former Business Alliance garage manager Brad Cannon, whose knowledge could have ensured a smooth transition of the management contract from the Business Alliance to Star and the minority chambers.

"That seems like a preemptive move to me," says Barry Schlesinger.

In the next few weeks, the city will decide whether to extend the Goodmans' contract for a year orput it up for bids. "I'd be very disappointed if the city didn't extend our contract," Goodman says.

Schlesinger would not be disappointed at all. "It makes a lot of sense for us to operate the garages as well as managing them," he says.

Downtown Portland has about 46,000 parking spaces. About 7,000 of those are on- street, city- owned metered spaces, and nearly 4,000 are in city- owned garages.

A

cover story 10 years ago ("Space Invaders," Aug. 26, 1993) pegged the Goodmans' share at 140 out of 145 downtown lots.)

Seattle, Sacramento, San Francisco, Los Angeles and most other big cities are served by at least two major parking companies. San Diego is controlled by one major player, Ace Parking; unlike City Center, which operates only in Portland, Ace operates across the West.

The six city garages posted revenues of just under $9.3 million last year, an average of $2,424 per spot. Multiplied by 46,000 citywide spots, that figure values the Portland market at $112 million annually.

The Goodmans have long been generous contributors in City Council races. According to the

, their companies have given $18,000 to council candidates since 1998.

In addition to private and city lots, City Center also operates the parking garages owned by Multnomah County and Metro.

The city parking- management contract accounted for 30 percent of the Portland Business Alliance's $11 million budget last year, according to Alliance figures.

WWeek 2015