Politics

‘Deal of the Century’: Sale of Chicago Parking Meters to Investment Firm Advances

The Chicago City Council’s Finance Committee agreed Thursday to allow Chicago’s parking meters to be sold to an investment firm as part of an agreement that a powerful alderperson said should serve as a partial apology for the much-loathed deal to sell the city’s meters in the first place.

The proposal now heads to the full City Council for a final vote Friday. Ald. Jason Ervin (28th Ward), whose proposal for the city to create an infrastructure trust to buy back the meters failed to garner any support, and Ald. William Hall (4th Ward) voted against the deal.

The deadline for the City Council to approve the sale is Wednesday.

In 2008, Chicago Parking Meters LLC leased the city’s meters for 75 years in return for $1.15 billion — a much-loathed deal crafted by former Mayor Richard M. Daley and rubber-stamped by the City Council that continues to roil Chicago politics nearly two decades later.

Ald. Pat Dowell (3rd Ward), the chair of the Finance Committee, called that deal a “textbook case of what not to do in municipal finance.”

“We have an opportunity to not only apologize to Chicagoans for the city’s past mistakes, but to back that apology with real, tangible benefits for taxpayers for the first time,” Dowell said.

The parking meter lease generated $1.97 billion in revenue for the firm between 2009 and 2024, records show. That is approximately $500 million more than was paid to the city nearly 18 years ago, records show.

If the $2.53 billion sale to Stonepeak Partners is completed, as expected, the New York-based firm will pay the city $75 million, Corporation Counsel Mary Richardson Lowry told the committee.

In addition, Stonepeak will share 5% of its profits with the city, which is expected to yield $376.2 million for the city over the next 57 years, according to the agreement. Those funds will be earmarked for the city’s pension funds, Dowell said.

However, Ald. Bill Conway (34th Ward) said the terms of the agreement allow Stonepeak to write off interest costs and the depreciation of the system, making it less lucrative for the city than he originally thought.

“This is not quite the big win that I thought it was,” Conway said.

The agreement requires Stonepeak to sell Omni Air International, which has a contract with the U.S. Department of Homeland Security to provide long-haul deportation flights.

Stonepeak has filed a “disinvestment certification,” promising to sell the airline, Richardson Lowry said. That document was available for alderpeople to review, but Richardson-Lowry said the city could not share it with members of the public.

Although some City Council members peppered Richardson Lowry with questions about the details of the deal and whether the firm will actually sell Omni Air, others lauded the agreement.

“This is the deal of the century,” Ald. Matt O’Shea (19th Ward) said.

Ald. Nicholas Sposato (38th Ward) joined the celebration.

“I’m jumping for joy,” Sposato said. “I’m giddy about this.”

Even Ald. Anthony Beale (9th Ward), an implacable foe of Mayor Brandon Johnson, said the agreement was a good deal for Chicagoans — though he credited the team of alderpeople who negotiated the deal with hammering out the crucial details.

“There is some lemonade being made here,” Beale said. “It is still bitter though.”

The alderpeople who negotiated the deal were Dowell along with Alds. Nicole Lee (11th Ward), Walter “Red” Burnett (27th Ward), Scott Waguespack (32nd Ward) and Gilbert Villegas (36th Ward).

Burnett, who was appointed to the City Council by Johnson, is the only member of that group who has endorsed Johnson’s bid for reelection.

A spokesperson for Stonepeak said leaders of the firm “are encouraged by the Finance Committee’s vote to approve our acquisition of Chicago Parking Meters as we hope to become a long-term partner to the city of Chicago.”

Hall said the deal should have required the new owners of the parking meters to contract with more firms owned by Black Chicagoans.

James Wyper, Stonepeak’s senior managing director, told a City Council committee in June that the firm believed the Trump administration’s ongoing mass deportation effort was “abhorrent” and was actively trying to sell Omni Air.

Several members of the City Council’s Progressive Caucus pressed Richardson-Lowry on what recourse the city would have if Stonepeak fails to sell Omni Air.

While Richardson-Lowry said the deal gives the city the right to take action if the airline is not sold in a timely manner, she declined to detail the city’s potential legal strategy. That prompted several alderpeople to request closed-door meetings on the subject.

Richardson-Lowry is set to retire Oct. 1 as the city’s top lawyer. Johnson has tapped Renee Hatcher, a law professor at the University of Illinois Chicago, to replace her.

The agreement announced by the City Council members also calls for the city to get an additional payment of 2% of the sale price if Stonepeak sells the meters. The deal gives the city’s chief financial officer 30 days to review that proposed sale and make a recommendation to the City Council, which will have 90 days to approve or reject the sale.

Critics of Johnson blasted his handling of the parking meter sale and accused him of withholding crucial information from the City Council that members could have used to force changes to the deal.

Johnson announced in January that Chicago would not buy back the city’s meters, telling reporters “the final purchase price was far too high.” In a memo sent to alderpeople, Johnson said the city bid $3.2 billion for the meters — by far the highest offer — before reversing course.

The city would have had to borrow billions to finance the purchase, pledging to repay that debt with motor vehicle parking fine receipts as well as off-street parking and garage tax receipts, in addition to all parking meter revenue, according to the Johnson administration. Officials would also have been required to use the city’s other tax revenues to make up a shortfall, which could threaten the city’s ability to provide other services, according to the Johnson administration.

In addition, the agreement will change the way the city is required to compensate the firm for lost revenue when meters are temporarily taken out of commission for seven special events to reduce the cost to Chicago taxpayers. The city will choose the seven events annually.

City officials and representatives of Stonepeak will also “examine establishing certain non-metered blocks as potential electric-vehicle charging stations,” and any revenue from those charging stations would be split between the firm and the city, according to the agreement.

Stonepeak also agreed to ensure that at least 50% of its Chicago Parking Meters workforce will live in Chicago, and disclose to the city how many employees live on the South and West sides, where some of Chicago’s poorest residents live, according to the agreement.

The agreement also prohibits Stonepeak from sharing with the federal government any information about Chicago drivers who use the system.

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

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