The City of Chicago, in order to close their yawning budget deficit without cutting any spending, resorted to a one-time sale of their parking meters to a third party.
Here is a link to a Chicago Tribune article about the lease. The City received $1.2 billion in cash, immediately, but forfeits the revenue from the meters for the term of the 75 year lease.
In practical terms, the meter rates have increased drastically. All week long they are basically $2 / hour, where ever there are meters (most side streets don’t have meters). From 8am to 9pm this would work out to $26 / day. You can see the rates on the meter. Note also the sign that you can’t put in money for more than 30 minutes at a time (on this particular meter) – probably that’s left over from its prior incarnation. I assume that there is some sort of credit card way to pay else you need to walk around with 100+ quarters (a roll?) just to pay for parking.
The company with the sticker on the meter is operating this deal – “Laz” – and Morgan Stanley set up a consortium to invest the money and capture the future revenue stream. From the “Laz” web site:
CHICAGO METERED PARKING LLC SELECTED AS PREFERRED BIDDER FOR THE CHICAGO METERED PARKING SYSTEM
December 04, 2008–CHICAGO
HARTFORD, CT – December 2, 2008 – LAZ Parking, LLC is pleased to announce that a consortium led by Morgan Stanley’s infrastructure investment group has been selected by the City of Chicago as the preferred bidder for the 75-year concession of the Chicago Metered Parking System. LAZ Parking, headquartered in Hartford, will be responsible for the operation of the system.
The Metered Parking System has up to 45,000 parking meters, together with surface parking lots, throughout downtown Chicago. The City retains all power and authority to set rates and periods of stay and operation for all of the parking meters in the System. The acquisition of the concession is subject to the approval of the Chicago City Council and the Board of Commissioners of the Park District and financial close is expected to occur in the first quarter of 2009.
For me personally what is going to stink is that parking used to be free on Sundays, when Dan and often my father or Gerry would drive over and park near my house and then we’d all drive down to Soldier Field together. Now that type of day would end up being pretty expensive, although I don’t know if you could even feed the meter that much in advance (wouldn’t the meter be so full of quarters it would explode?).
I also don’t know what the valets are going to do – they usually block up all the spots in advance and then when they are pulling out a car a different valet moves into that same spot (so you can never park at night). This will all probably happen around 9pm when the $2/hr rate expires – before then, likely valet parking will have to cost much more because the valet is out $2 / hr and they need to make money on top of that.
The City also sold the Skyway toll road to a foreign consortium – and they held some of the proceeds in a “rainy day” fund (which gives comfort to bond rating agencies) rather than splurge it all immediately, so hopefully they will follow that precedent with this deal.
Bad news for us Bears fans, though…
Cross posted at LITGM
6 thoughts on “Chicago Parking Meters”
I don’t know if you get them in the US (probably do) but there is a type of gumdrop/hard lolly that fits nicely into the slot of these machines. Gums the innards up nicely, at least when things are warmer.
I wonder who does the enforcement? Since a private party now owns the meters, do they still get to have the Chicago cops write the traffic tickets? And how is that revenue split?
The cops still write tickets. The city gets to keep that revenue. But the meter revenue has been paid to the city “up front” and is gone forever (or 75 years at least, so you can say my life time).
Thus the cops will zealously check these meters all the time because it is tied to their revenue source. Morgan Stanley either makes or loses $ based on the cost out of their up front payment against the revenues that they earn over 75 years less what they have to pay this Laz company to do the dirty work of collecting meter $. As far as Laz, they will either make or lose a few $ based on how they set up their contracts.
In the near future, we might be able to set up an internet based auction process for parking spaces. When you wanted to go somewhere, you could hop online and make a bid to reserve a parking space for a certain time period. Such a system could be easily automated.
If you tied the system into private parking you would create an incentive for market based system that would provide plenty of parking.
Well, I think the whole thing stinks. Daley’s an idiot for giving up the revenue in lieu of a few (in government terms) bucks. And you’re absolutely right that meter readers will be, and are, stepping up their game. What makes it intolerable is the gouging rate increase that, in my opinion, amounts to usury, not to mention their apathy to mechanical problems and inaccurate rate stickers. Government taxation, lack of representation, and corporate piracy has become a battle cry and rally point- can you say Chicago Meter Party?
I like the 1st commenter’s idea. In the past, no matter how pissed off I got about the meters & how much I wanted to go around filling the coin slots with Superglue, I realized that being city property, the cost would just go back to the taxpayer (me). But NOW it’s different! Get out your Superglue, kids! This is a legitimate form of protest: the sleazeballs in city govt (Daley & his lapdogs) sold municipal property to get their butts out of a budget jam created by their own mismanagement. It was not their property to sell – what’s next, the Lakefront?
Superglue is the answer. Set yourself a goal: 10 meters a day. If we all work together….
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