T sues LAZ, its former parking lot operator

Tracking Transportation/ Transportation

T sues LAZ, its former parking lot operator

Agency seeks millions allegedly stolen, plus penalties

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THE MBTA SUED its former private parking lot operator on Thursday, seeking the recovery of millions of dollars allegedly stolen by the firm’s employees over a three-year period. If the suit is successful, the T says its contract with LAZ Parking Ltd. requires the firm to pay the T twice the amount stolen plus additional penalties and fees.

Both the T and LAZ have acknowledged for some time that parking money was stolen, but they have failed to agree on how much. The MBTA’s lawsuit, filed in Suffolk Superior Court, does not quantify the theft amount, but John Englander, general counsel for the transit authority, said it runs to “several million dollars.”

LAZ officials could not be reached for comment, but they have indicated in the past that the amount of money stolen was significantly less.

The dispute over stolen parking revenues was referred to Attorney General Maura Healey’s office last July. Officials there declined comment on Thursday, but said the investigation is continuing.

LAZ, a Rhode Island-based firm, was hired in 2013 to run the T’s parking operations in return for monthly fees that yielded about $10.5 million a year. The T put the business out to bid last year, and LAZ participated in the bidding process. Ultimately, the MBTA hired Republic Parking System of Tennessee and the contract was redesigned to reduce cash payments from customers and to provide financial incentives for Republic if it boosted parking revenues. LAZ’s contract with the T was terminated on March 31, 2016.

The MBTA’s parking facilities include 12 lots where attendants collect fees directly from customers. Concerns about theft first surfaced publicly in April 2016 when the T confirmed to CommonWealth that a routine comparison of vehicle counts and parking receipts at the North Quincy Station lot uncovered discrepancies. CommonWealth reported at that time that the discrepancies were discovered at a total of six lots, and at least one employee had already been dismissed. LAZ ultimately terminated two employees and transferred a third to a position without cash-handling responsibilities.

LAZ conducted an investigation that confirmed losses occurred at North Quincy, but found little evidence of theft at the Lechmere and Riverside lots. The T referred the matter to the agency’s transit police, and both the T and LAZ conducted audits of their own. T officials gave mixed signals on how widespread the problem was, at one point suggesting it was confined to just a few lots.

But concerns ratcheted up in May 2016, when parking revenue numbers from March and April indicated receipts jumped fairly dramatically after the firing of the LAZ employees. Parking revenues remained high over the subsequent months, suggesting the theft amounts might have been much greater than originally believed.

“After the discovery of the theft and the termination of the employees, the monthly revenue reported and provided to the MBTA by LAZ increased significantly, further confirming that LAZ’s employees had been stealing from the MBTA and that LAZ had failed to properly supervise those employees in order to ensure that all gross revenue was collected at each of the facilities for which LAZ was responsible,” the T said in its lawsuit.

T officials say they now believe that parking revenues were stolen at six lots, including North Quincy, Lechmere, Riverside, Oak Grove, Malden, and Wellington. T officials declined comment on how the money was stolen other than to say documents were altered.

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Bruce Mohl

Editor, CommonWealth
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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The T said its contract with LAZ requires the company to refund any money lost through theft. The T said it deducted some of what it believes it is owed from its monthly contract payments to LAZ, but the transit agency believes it is still owed money.

According to the MBTA’s lawsuit, the agency is seeking recovery of the amount stolen, a penalty equal to double the amount stolen, a penalty of $200 per parking facility for each day in which revenue was collected by LAZ but not forwarded to the T, and interest on the stolen funds at an 18 percent rate. The court filing also says the T is owed “a penalty in the amount of double the initial penalty and the daily penalty, as required by the management agreement when three of the same penalties occur within any 12-month period.”

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  • disqus_610343

    And let the lawsuits begin. Private companies have been skimming the tax payers for years. And everybody thinks the unions are corrupt. Let’s check out all the military contracts, the private ones that is

  • Here’s an idea. Let people park for free. No contract or oversight needed. Encourage people to use mass transit, saves on traffic and road wear, which also saves budgets everywhere. How about lighting that beacon on Beacon Hill? Stupid is damn expensive. Freedom is free.

    • ABC123

      The MBTA could never let people park for free. The MBTA parking revenues are millions of dollars. They are not going to give that up. Although encouraging people to use mass transit would obviously be great, at many parking lots making the parking free will not increase the number of people using it. More will want to, but many lots are already at capacity. The article listed 6 lots North Quincy, Lechmere, Riverside, Oak Grove, Malden, and Wellington as places where money was stolen. These lots are full or very close to full each day. Oak Grove and Malden are generally full by 7:15am on weekdays. Pretty much any subway line stop parking fills up early Alewife, Braintree, Quincy Adams, Wollaston, Forest Hills, etc. Many commuter rail stops also fill up doesn’t matter if it is Attleboro, West Natick, Littleton/495. If you go down any of the commuter rail lines you will see full lots or mostly full lots.

      It is also not just an MBTA lot problem. About a third of the lots are not MBTA lots, but run by the town they are in, a regional transportation authority, or in Wickford Junction’s case the state of Rhode Island. North Billerica is run by the Lowell RTA. It is full by 7:30 or so (and has honor boxes as payment collection if you can believe it. The only one I know of remaining). Sharon and South Acton are both good examples of town run lots that fill up early. They also have a confusing mixture of resident, non resident, and guaranteed parking with South Acton having a long wait list (over a year) and Sharon having a very poorly planned lottery system.

      The best way in my opinion to deal with it is

      1. Have accurate reporting of how full the lot is and when. If you look at the MBTA’s parking website you will see cases where they will say <43% average weekday availability. That is a useless statistic. It being 42% or 1% is a huge difference. Southborough is listed as <35% availability when the lot actually is 0%. Know how full the lot gets and when/if it fills up then post the accurate numbers. This way people will know if they are likely to get a space or not. I can't tell you how many times I have seen people go to a lot only to find out it is full and then drive to the next one down the line.

      2. The current pricing structure is not the best. The general idea is $4 for surface lots, $5 for surface lots with an attendant, and $7 for garages. There are exceptions to this structure, but more or less this is what each lot charges. The price should reflect the demand for the lot to encourage people to use less utilized lots. For example Southborough and Ashland both charge $4, however Southborough fills up early where Ashland has a good chunk of their spaces remain empty. Lower the price in Ashland to encourage more use of that lot.

      3. Build more parking in areas where it is needed.

      4. For lots with a confusing mixture of spaces like South Acton or Sharon simplify your system.

      The goal is to encourage people to park in these lots and take public transportation. To accomplish this you want to make it as easy as possible for them to use the lot. By creating a reasonable pricing structure, adding needed parking, simplifying their parking system, and providing accurate parking information you can make it easier for people which would cause more to use it and revenues to increase. Sorry for the long rant just had a lot to say.