Thursday, March 12, 2009

Chicago Parking Meters

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:

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 Chicago Boyz


Gerry from Valpo said...

Rainy day fund my a$$. Looks to me that Chicago is in the middle of a monsoon.

Will the city meter readers patrol the meters and generate revenue for Dick Daily from expired parking?

Will Dick Daily split expired parking fines with the meter company or will it all go to central planning?

Will the meter company sell advertising on meters or sell naming rights to each parking meter? If so do they share the profit with Dick Daily?

Will Dick Daily lower your taxes due to the windfall profit from the parking meter and Skyway sale?

Will the people of Chicago ever vote out the Dick Daily and his politboro to become a free people again or does the voting proletariat enjoy socialism that much?

Just asking.

Dan from Madison said...

Interesting theme Gerry. At ChicagoBoyz a few weeks ago I posed that I couldn't understand why Chicago wasn't some sort of Mad Max Thunderdome land by now. Totally insane taxes, corrruption and all the rest. Some of the answers I got were that people have an extremely high tolerance to this stuff to stay close to family, and general reluctance to leave. Who knows, maybe someday the people will leave like Detroit and all that will be left is the shell.

Carl from Chicago said...

Chicago didn't get to be where it is by being well run or lightly taxed.

Businesses here are extremely inventive, and basically invented the futures and options markets as we know them today along with a giant supporting cast of high paying specialists.

Advantages of Chicago are a great skyline, a beautiful lake where in a rare bit of actual planning, they kept the shore line clear and it is just packed on a summer day.

There are 3 ways to compare Chicago - vs. the "dead cities" of Cleveland, Detroit, etc... with comparable taxes and likely corruption - we blow them away. Then compared to the East like Philly or Baltimore, their taxes are far higher for even less so we beat them, too.

Until California became a fiscal train wreck with crazed policies towards power and the like they were eating our lunch, as was Florida and Texas. NYC obviously has a lot of problems.

If you want a city with skyline, culture, etc... you don't choose between Indiana, Wisconsin and Illinois - you choose between Chicago, NYC, LA, Seattle, Boston...

and we just have to "suck less" or at least not appreciably more than them to see it happen.

There is no reason to be in Buffalo, Detroit, etc... - that is their problem, and high taxes and crime just compound it.

Dan from Madison said...

Too bad "sucking less" comes up so much in our discussions these days.

Anonymous said...

"I'll tax the air you breathe!" -May R Daily

Anonymous said...

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?

Becca@removalistsmelbourne said...

If you consider a pack of cigarettes is $7 and and movie theater ticket is $11, $5.25 for an hour of on-street parking in the heart of the city as the busiest time doesn’t really seem like that much to me