Politics

Chicago Won’t Buy Back Parking Meters, Johnson Says

Chicago will not buy back the city’s 36,000 parking meters from the firm that leased the city’s meters for 75 years in return for $1.15 billion in 2008, Mayor Brandon Johnson said Tuesday.

Johnson told reporters at an unrelated event that his administration explored what it would cost to reverse the much-loathed deal reached by former Mayor Richard M. Daley and rubber stamped by the Chicago City Council but concluded that any possible deal was much too expensive.

“The final purchase price was far too high, much more than they initially received for the sale, and higher than most reasonable assumptions would support,” Johnson said.

Johnson said it would have been “deeply irresponsible” not to consider bidding for the meters, which have been put up for sale by Chicago Parking Meters LLC, which owns them, but concluded it would result in a “bad deal” for taxpayers.

“We had our teams run the numbers and look at every variation of a potential deal,” Johnson said. “However, the more we looked into it, the more problems emerged.”

Because the cash-strapped city would have had to borrow approximately $2.4 billion make the purchase, “we would be locked into ever rising debt payments that would require City Council to consistently vote to raise parking rates year after year,” Johnson said.

Chicago had $10.6 billion in outstanding debt backed by the city’s property tax and sales tax receipts at the end of 2024, according to the city’s 2024 Annual Comprehensive Financial Report.

The purchase would have also been a bet that parking in Chicago will look much the same for decades into the future, despite “the rapid pace of technological change, including the rise of autonomous vehicles,” Johnson said.

“That means the value of the city street parking could change dramatically,” Johnson said. “That represents an even greater level of risk than what we face with the current contract. Chicagoans would most likely end up footing the bill yet again for this original decision to privatize our parking meters.”

A spokesperson for Chicago Parking Meters did not immediately respond to a request for comment Tuesday.

If the parking meters are sold by the firm created by Morgan Stanley, Allianz Capital Partners and the Sovereign Wealth Fund of Abu Dhabi, the City Council must approve the transfer. That could give the city some leverage to revise the deal, Johnson said.

The city used much of the money from the parking meter lease to close short-term budget gaps, making it impossible for city officials to back out of the contract even as the cost to park at a downtown meter soared from $3 an hour in 2008 to $7 an hour today.

There are 57 years left on the parking meter lease, which generated $1.97 billion in revenue for the firm between 2009 and 2024, approximately $500 million more than it paid the city nearly 18 years ago.

The deal also 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.

That cost the city $7.6 million in 2024, records show.

In May, the City Council agreed to pay Chicago Parking Meters to a total of $25.2 million 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.

Johnson is now the third Chicago mayor to try, and fail, to get out of the reviled deal, which has become shorthand at Chicago City Hall for disastrous policy proposals.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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