Chicago-Style Parking Plan Could Raise $5 Billion Plus for NYC
According to a senior municipal bond analyst at a leading Wall Street firm, New York City could raise between five and six billion dollars immediately if it privatized its parking meters as Chicago is doing.
Whether privatization is the right way to unlock New York City's parking riches is debatable. What's not in question is that curbside parking in New York and most U.S. cities is grossly underpriced and could potentially be a crucial source of revenue for much needed transportation improvements. Chicago has chosen to outsource the political will to raise meter prices. Cities with the gumption to raise their own meter prices will keep much more of the revenue. That said, at least Chicago is doing something about its parking dysfunction, and will get the very real benefits of reduced cruising traffic and double parking.
The Bond Buyer reports that Chicago expects to raise more than a billion dollars upfront when it awards a minimum 50-year concession to operate its curbside parking meter system. Ten corporate consortiums are bidding for the contract, which is expected to go before the City Council in the fall. According to Transportation Alternatives' recent report Pricing the Curb [PDF], Chicago will require vendors to use state-of-the-art parking meters that monitor parking space availability and adjust rates to ensure an open space on every block. Chicago will raise meter rates as part of the deal.
Chicago's 36,000 parking meters generated $23 million in 2007. New York City's 75,900 meters produced $114 million. (New York anticipates $120 million in meter revenue in 2008.)
Chicago leads the U.S. in privatization deals or "public-private partnerships." It leased the Chicago Skyway toll-way in a 99-year deal with a multinational consortium in 2005 for $1.82 billion. It followed up that deal with another 99-year lease of four downtown parking garages to a private operator for $563 million in 2006.
Mayor Daley says Chicago will use lump sums from the privatization deals to create a reserve fund which will generate interest for long-term infrastructure investments and to pay down debt and pension obligations. But some Chicago City Council members have expressed concern about the proposed parking privatization and higher meter rates. "We saw that in the Skyway. Fees went up. If we lose control of that, the citizens have nobody to complain to. They're not going to listen to John Q. Citizen," Transportation Committee chairman Tom Allen (38th) told the Sun Times.