Parking meter rates in Chicago yesterday jumped to $5 per hour in the Loop, $3 per hour in the greater downtown area, and $1.50 per hour in the neighborhoods, sparking a round of criticism from the current crop of mayoral candidates about the 75-year lease of the meter system to Chicago Parking Meters LLC.
On New Year's Eve, City Clerk and mayoral contender Miguel del Valle promised to not fight a lawsuit seeking to overturn the deal (which is what the Daley administration is doing) but instead go on the legal offensive. "As mayor, not only will I instruct the city’s lawyers not to defend this lawsuit, I’ll sue the investment company and ask the court to declare this contract illegal," he said in a statement. Carol Moseley Braun offered some strong words about the meter privatization in a release today:
This is a classic investment bank rip-off of the people of Chicago. I won't stand for it. Morgan Stanley and the other investment banks got billions worth of our quarters for only $1 billion. We want our money back, and if elected Mayor, I'm going to cancel this deal.
Moseley Braun told Fox Chicago that she has identified more than $1 billion in savings in the city budget that could be used to refund the Chicago Parking Meters LLC if the deal were to be canceled. But Gery Chico criticized this approach, throwing cold water on talk of suing the firms involved in the deal or canceling it by refunding the $1.15 billion the city gained when the lease was ratified. He said the city should have kept control of the meter system but that it's too late to go back now. "Sometimes we just have to cut our losses and move forward," he said. Here's a clip from a press conference today:
Chico's meter plan revolves around rebuilding the gutted $400 million long-term reserve fund the meter lease was supposed to create.
Terms of the 2008 meter lease means all the money collected in the Chicago's 36,000 meters flows to the meter partnership, which includes Morgan Stanley, the Abu Dhabi Investment Authority, and Allianz Capital Partners, through 2084; the group could earn up to $9.58 billion in profit from Chicago parkers through that date, according to Bloomberg News, before taxes and other costs. All but $76 million of the up-front money gained through the lease has already been spent or committed to fill gaps in the regular city budget. The acrimony generated by the meter lease in Chicago is serving as a cautionary tale in a handful of other cities considering similar privatizations.