What Lori Lightfoot Can Do About The City’s Parking Meter Deal
In 2008, then-Chicago Mayor Richard M. Daley signed a $1.15 billion deal to privatize the city’s parking meter system.
The 75-year contract has been widely criticized by transportation advocates who say certain contract provisions restrict the city’s ability to manage its own streets.
Transportation and urban planning expert Sam Kling joins the Morning Shift to share his recommendations for how the incoming Lightfoot administration can change the parking meter deal.
What does the 2008 parking meter deal entail?
Sam Kling: It trades $1.15 billion in exchange for 75 years of city parking revenue. And it gives that revenue to a consortium, with the bland name of Chicago Parking Meters LLC. It’s made up of Morgan Stanley, Abu Dhabi and some other investors, and they basically collect the revenue from these parking meters until 2083.
Jenn White: How much history was there around the city privatizing its parking meter system?
Kling: Chicago has several privatization agreements that all went on around this time. Skyway was privatized around this time, the Millennium Park Garages were privatized. But the city’s parking meters kind of took on this aura of being the biggest catastrophe nationwide.
Other cities looked to Chicago’s parking meter deal and they concluded that this was really not the way to go. It turns out that just 13 years into the deal, by 2021, the investors will recoup their entire $1.15 billion investment. So that leaves them with 62 years just to rake in profits.
White: Were there any ways the city benefited from this deal?
Kling: This was signed in 2008, it was just as the economy was starting to collapse. Chicago had a big budget problem and so Mayor Daley used the money to plug these short-term budget gaps. That was important in the moment, but it really left Chicago with this big long-term disadvantage in that it doesn’t control its parking revenue and it doesn’t control the streets on which these parking meters are operating.
How Mayor Rahm Emanuel approached the deal
Kling: Mayor Emanuel was clear that he did not think this was a good deal, which was a very mainstream position at the time. He did try to do things to improve it for the city.
One of the biggest controversies was the calculations of these things called true-up payments. A true-up payment is basically when the city takes metered spaces out of service, it has to compensate the concessionaire for the removal of these spaces ... and so it turned out the concessionaire was demanding from the city extraordinary amounts of money, $27 million a year just in true-up payments. So Mayor Emanuel came and said, ‘We have to settle this. We have to come up with some better system to calculate these true-up payments.’ And that’s what they did in 2013.
Right after that, the true-up payments went down. They went from $27 million down to $7 million and everyone thought, ‘We fixed this problem.’ Well, it turns out we haven’t because last year, those true-up payments went up to $20 million.
What Mayor-elect Lori Lightfoot can do about the deal
Kling: So, the deal is done. We can’t really go back in time and remove it. A lot of the complaints about the deal have been about how it was such a bad deal for Chicago, financially speaking ... but the deal does something that’s actually much more dangerous — it restricts Chicago’s ability to manage its streets.
Like I said, if Chicago ever wants to take a parking space out of service, it has to pay exorbitant fees. This means that it’s really hard for the city to do things like build bus lanes, build bike lanes, plant trees … and this comes at a time when demand for parking in the United States and worldwide is declining, and cities are really starting to rethink what their streets can do. So really what Mayor Lightfoot needs to do is renegotiate the deal so that it gives the city autonomy to control its streets again.
This interview has been edited for brevity and clarity by Stephanie Kim. Click the “play” button to hear the entire conversation.
GUEST: Sam Kling, Chicago Council on Global Affairs fellow; transportation and urban planning expert
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