Every time a Chicagoan pays for parking an investor says, “ca-ching!”
The meters are a serious moneymaker — just not for Chicago.
Maybe you’ve heard of the infamous parking meter deal. Here’s why it’s so unpopular and how it became a case study in worst practices.
Picture the year 2008.
A global financial crisis strikes, and everyone is a little strapped for cash — including Chicago. The city is broke.
Now, if you want to plug a budget gap, raising property taxes will do the trick. But if you want to remain popular with voters, that’s not such a great idea.
So Mayor Richard M. Daley got creative. He looked around for assets to sell.
What about Chicago’s 36,000 parking meters? Bingo!
A hastily formed investment group — the creatively named Chicago Parking Meters LLC — agreed to cough up $1 billion and change for a 75-year lease, and Chicago City Council rubber-stamped the plan faster than members could read the terms of the deal.
A billion dollars sounds like so much money. And it is. But so much money may have gotten left on the table.
Some analysts believed the parking meters were worth at least $2 billion.
As soon as the new renters took over the property, they began raising fees — and their profits.
A quarter used to buy an hour of parking time. Today? Ha!
But wait, there’s more.
If the city takes a parking space out of service for, say, a street festival or to build a protected bike lane, it has to pay Chicago Parking Meters for the lost revenue.
So now the landlord is paying the renter.
Plenty of people have searched for loopholes that would allow the city to break this almost comically lopsided lease. No dice.
The courts have called the deal “foolish, short-sighted or worse,” but, it turns out, it’s not illegal to strike a bad deal.
With some 60 years left on its lease, Chicago Park Meters LLC has already made back its initial investment — and then some!
An impressive return on investment for them, and a tough break for Chicagoans.