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The city and boardwalk redeveloper Madison Marquette may soon reach an agreement that would see operations of three waterfront parking lots put back under Madison Marquette’s control.

As a result, Madison Marquette has started the first phase of a state-mandated sprinkler system installation in the Convention Hall complex. The redeveloper had previously stated that the loss of the parking lots required it to scale back boardwalk investment, which included the sprinklers. The move would have led to the decommissioning of Convention Hall.

City Manager John “Jack” Kelly said on Friday that a deal is near complete for Madison Marquette to regain “the control and the financial responsibility” of the lots. Kelly hopes to present the tentative agreement to the city council at the April 2 meeting.

“Madison has been working closely with the City and iStar Financial to resolve our parking concerns and believe that we have reached a compromise that should be finalized and before City Council at their first April meeting,”  Carrie Turner, Madison Marquette’s director of retail for boardwalk, said in an email to the Sun. “We feel confident enough that this matter is heading in the right direction that we have already started working on the first phase of sprinkler installation in the Convention Hall complex.”

The three parking lots — which contain about 600 spaces — are adjacent to the Carousel building at the intersection of Cookman and Asbury avenues; on Ocean Avenue between Second and Third avenues [pictured above]; and on Fourth Avenue next to the Wonder Bar.

Waterfront redeveloper Asbury Partners owns the lots. Madison Marquette — a minority owner in Asbury Partners — was granted temporary approval by the city to use the lots for valet parking and paid parking for five years, ending  Oct. 1, 2012. Parking lots are not a permitted use in the waterfront redevelopment plan.

Last year, the city renewed the approvals to use the lots until December of 2016, but elected to give control of the lots to iStar Financial, the majority owners of Asbury Partners.

The move proved controversial after officials from Madison Marquette said they would scale down their redevelopment efforts on the boardwalk if their access to the lots was hindered. Tied to the downscale was installation of a state-mandated sprinkler system in the whole of the Convention Hall building, including the Grand Arcade and Paramount Theatre sections.

City officials and the boardwalk redevelopers entered into a consent agreement to install a state-mandated sprinkler system to the Convention Hall and the Paramount Theatre buildings by 2015. The consent order includes a clause that allows Madison Marquette to close the structure if the cost of the sprinkler system outweighs the investment the redeveloper gains from operating the structure.

After losing the spaces, officials from Madison Marquette said they could not continue to justify further expense of operating the building at a loss without control of the parking lots for events tied to the venues they operate, which included spending money on the sprinkler installation.

The riff saw event programming at Convention Hall scaled back significantly, with the Garden State Film Festival and Jersey Shore Roller Girls moving to alternate venues.

Still, Madison Marquette officials remained firm in their resolve to regain control of the lots.

The lots would still be operated by third party [iStar hired a company called LAZ Parking to maintain the lots last summer] and be subject to the same monthly reporting and other components of compliance the city and iStar put in place when they worked out their agreement, Kelly said.

In essence, Madison and iStar would be swapping roles, and the idea has been approved “in concept,” Kelly said.

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