Streetsblog New York City

I have to disagree with the general consensus. Chicago could make 2 billion, if things don’t change for the next 75 years. Who is to say people will still be parking their giant metal cages on the streets of Chicago in the year 2084?

I think what Chicago did was a wise move, it removed a large amount of risk from the revenue equation and passed it off to a private company.

I believe most readers here would hope and are working towards the situation of so many cars being different by 2084.

I also think this post was a little too critical. They may have left a lot of money on the table, sure, but the upside is they still got $1.157 billion up front, and now their parking will be more sensibly priced. Win win. When you factor in the political realities, it looks like the best they could do, and not so bad either.

Based on what I have seen, the parking meter privatization is a really, really bad deal for Chicagoans and just makes for bad policy. Consider:

- If the City of Chicago wants to remove metered street parking to install bike parking, bike lanes, BRT lanes, bump outs or any similar repurposing of the street anytime during the next 75 years, it will need to PAY the private firm for the loss of each meter. You think making these changes is tough in New York? Consider how much less incentive City officials in Chicago now have by attaching an additional price to these initiatives. From what I understand, the city must also pay the company to close the street for festivals and other activities when the meters cannot be used for revenue.

- A private company now sets parking prices in Chicago with only their interests in mind. Think about this. Policy wonks know there is a science to setting parking lot pricing and that meters are an important urban planning tool. This firm now sets pricing only with their interests in mind, as any business would. As a result they will not consider maximum turnover to benefit local stores, parking availability to reduce congestion and emissions from cars endlessly driving around the block looking for spots, encouraging alternative forms of transportation, improving stormwater management, street safety, beautification or pedestrian enhancements. If a Chicago alderman wants to make any of these changes for their neighborhood, he/she must now wait until 2084 to touch any street with metered parking.

As other cities continue to make progress reclaiming streets for people, Chicago;s toolbox is now significantly limited for the better part of this century. Chicago may have landed a chunk of upfront cash for this deal, but it will certainly suffer the long-term consequences.

Jack is correct about the implications. $1B might seem like a lot, but the meter revenue stream is worth much more — and, of course, 100 acres of prime public space, along miles of the city’s busiest and liveliest streets, is worth way more than that.

Two things to add:
1. The “outsourcing of political will” is overrated: it was none other than Mayor Daley who called a press conference to announce the higher rates, and it’s none other than the mayor and aldermen* who are taking the political heat.

2. 60% of the revenue will be spent within the next four years of operating budgets, and ZERO has been earmarked for capital investments of any sort — much less capital investment in public space. This, even more so than the other city privatization deals, clearly shows that Chicago is mortgaging the house to pay the electric bill. Bond buyers beware!

* around here, we use the strange expression “Mrs. Alderman.” none of this “councilmember” stuff.

There are clear upsides to the privatization deal. But it remains a bad deal — it cost too much. As readers point out, the terms are highly restrictive, the duration is more than twice as long as the 35 year toll concessions granted in most of the world, and the deal’s fundamental assumption, that meter rates could not be raised any other way, seems questionable. Mayor Daley never tried to sell Council a $2B meter one-shot without the Morgan Stanley middle-man. Would they really have said “no” to an extra billion dollars that could have been spent on neighborhood improvements to soothe the political pain? Among many other problems with the deal, none of the meter money is dedicated to transportation, including maintaining the streets the cars are parked on. Some share of transportation user fees usually go to transportation improvements. But none of this revenue went to transit or bike/ped improvements that could further encourage motorists not to drive.

To those who say this deal is win-win, I respectfully disagree.

While cezar is correct in stating “who knows what the future will bring?” the point is that Morgan Stanley thinks it can draw revenue from these meters for 75 years… yet it only paid for about 40 years of value (a little over half of its estimated worth). When it comes to public assets, these deals need to be made with absolute taxpayer return in mind.

$900 million is a LOT of money to simply give up (especially for a municipality) to cover ongoing operational costs without actually fixing the underlying budgetary problems.

That’s why I hope this privatizing binge Villaraigosa is on dies a quick death. Unless it’s surplus property or can return a good deal for the taxpayers long-term, a public asset like street parking needs to remain in public control. I’m all for smart parking rates based on supply and demand; I just want the city government that’s subject to public opinion to raise those rates, not a private corporation.

In a 75-year time frame, peak oil makes the collapse of a car-based transportation system a certainty, and along with that comes the collapse of parking revenues. So it’s unlikely Chicago ever would have collected that extra $974 million. The real problem is that when Chicago tries to build its next-generation transit system, Morgan Stanley will control the curb.

Outsourcing of political will!

Isn’t democracy another word for political will? Are we really looking for authority figures outside of our will to rule us? Oh, well, the American Experiment was worth a try.

This back door deal was a scam from the begging. Once again like many other “initiatives” – Mayor Daley and his cronies took upon themselves to screw the hardworking people of Chicago. I happen to live on one of those city streets that got the paybox makeover as part of this shady deal. There is a small restaurant on the corner and now all of a sudden we’re a commercial area with paid parking from 8am to 9pm – 7 days a week!!! So if you work from 9 to 5 you cannot even park in front of your own house without paying. And parking enforcement idiots always show up first thing in the morning and just before 9pm. I already received a $50 ticket @ 8:03am.
Mr. Daley – we pay way too much in property taxes to be treated this way.