Final Tally: Chicago Taxpayers to Pay $25.2M to Parking Meter Firm to Resolve Claim City Violated Deal During COVID-19 Pandemic
A Chicago parking meter is pictured in a file photo. (400tmax / iStock)
The Chicago City Council unanimously agreed Wednesday to pay $15.5 million to the private firm that leases the city’s parking meters to compensate the firm for taking parking spaces out of service during the stay-at-home orders issued by city and state officials to stop the spread of COVID-19.
But taxpayers will pay an additional $9.7 million to resolve the claim filed by the company that will lease the city’s parking meters until 2083, bringing the total cost to $25.2 million, officials said.
In all, changes ordered by former Mayor Lori Lightfoot to remove thousands of meters during the pandemic and to stop citing drivers for parking at expired meters during the stay-at-home orders earned the city $26.2 million, Managing Deputy Corporation Counsel James McDonald told the City Council’s Finance Committee on Monday.
“This is pretty much a wash,” Ald. Jason Ervin (28th Ward) said.
Initially, the parking meter firm demanded $322 million from the city, according to the mayor’s office. An appraisal, ordered by the city, determined Lightfoot’s decisions cost the meter company $120.7 million, officials said.
The much-loathed 2008 deal requires the city make “true-up” payments to Chicago Parking Meters to compensate the firm for lost revenue when meters are removed, temporarily taken out of commission with the city’s permission or used by motorists with disabled parking permits.
Read More: WTTW News Explains: What Happened With Chicago’s Parking Meter Deal?
Lightfoot announced during a March 18, 2020, news conference that tickets would “only” be issued for safety reasons and specifically said that parking at an expired parking meter did not represent a public safety threat. Lightfoot told drivers they should still pay to park at meters.
That order was in effect for two and a half months and cost the firm $2 million in direct payments from motorists, according to the claim filed against the city by the parking meter firm.
The city already paid the parking meter firm $2 million to resolve that claim and will drop an appeal of that determination as part of the settlement approved Wednesday.
In addition, the city agreed to hire 10 additional enforcement agents to step up efforts to cite drivers for overstaying their welcome at the city’s parking meters. Each agent will earn $52,000 annually, for a cost of $520,000, McDonald said.
Those agents are expected to boost the amount of revenue the city gets from meter scofflaws by $500,000, said Charles Billows, the deputy director of the Department of Finance.
The legal wrangling, which lasted more than five years, cost taxpayers an additional $7.2 million, McDonald said.
A spokesperson for Mayor Brandon Johnson called the settlement a victory for the city secured by “tough and effective negotiations.”
Ald. Brendan Reilly (42nd Ward), a frequent critic of Johnson, praised his handling of the claim.
“I want to give you the credit that’s due for managing this massive disaster of a deal,” Reilly said. “It’s incredibly frustrating that we’re here at all.”
Ald. Scott Waguespack (32nd Ward), the only current member of the City Council who voted against the deal championed by former Mayor Richard M. Daley, said the settlement was the best possible outcome, given the inflexibility of the deal.
“It’s very frustrating to read that document and see how ironclad this deal is,” Waguespack said. “This is our first win in a series of losses on this deal, and it still doesn’t feel like a win.”
The firm paid Chicago $1.16 billion to lease thousands of parking meters from the city for 75 years, starting in 2008.
The city used much of the money from that deal — inked by Daley — to close short-term budget gaps, making it impossible for city officials to back out of the contract.
It took just a decade for the firm to recoup that investment, and since then it has earned hundreds of millions of dollars, including $150.9 million in 2023 alone, according to an audit.
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]
