Why I Hate the Chicago Parking Meter Lease Deal

With Chicago's parking meter system changing hands at the stroke of midnight tonight, I had some thoughts I wanted to share regarding the parking meter lease plan: Overwhelmingly bad.

After spending not quite two weeks digesting the details of the city of Chicago's 75-year lease of their entire parking meter system, for a paltry $1.16 billion, there is no other way to describe it.

It's not that your humble Parking Ticket Geek is against privatization. He is not.

In fact, as someone who almost always embraces free market principles, I think government privatization of some public services and assets can be a very good thing.

However, in this particular case, Mayor Daley, and the Chicago City Council, screwed up and did it in a big way.

Here's the how and why.

Rate Increases Too Steep

Not just too steep. WAY too steep of a price increase in meter rates.

Most parking meter rates in Chicago have not been increased in 20 years. Admittedly, that's too long.

Current rates, in general, are probably too low. But why try to play catch up for 20 years in such a short time frame?

Easing drivers into the higher rates would have done a lot to assuage critics and promote easier acceptance of the plan. But considering the current state of this economy, these dramatically jacked up rates will have the effect of discouraging some people from spending their money in our city.

I also do not buy the argument that the Mayor and aldermen were too scared to increase parking meter rates over the years. That's not only unbelievable to the point of asphyxiation-inducing laughter, but a pathetic and lame excuse.

Disproportionately Burdens Drivers

Everyone, including motorists, have to bear their fair share in this city, but this lease deal is just one of many anti-driver policies (red light cameras, two ticket boot threshold, street sweeper cameras, etc.) the city has pursued over the past year or so that targets drivers as a source of revenue for this cash-strapped city.

While most members of the city council were dislocating their shoulders patting themselves on the back for not raising taxes, the truth is that they did. Aldermen can use semantics to rationalize their decision, but these higher meter rates are taxes by any other name. And they did it on the backs of drivers.

Negative Economic Effects

The long-term economic effects of increased parking meter rates will have an adverse effect on Chicago business and tax revenue. This city is already at a disadvantage because of our egregious 10.25% retail tax rate. Adding radically higher parking costs is not helping things--especially during an economic downturn. This can only have a negative effect.

Visitors living outside Chicago, and even local drivers, will re-think visiting the city or other neighborhoods, knowing it will possibly cost them so much more to park or are afraid of the reports of aggressive enforcement.

Many businesses are fighting for survival in this recession. Why are we making it even harder on them?

While the effects of these rate increases may be only marginal, in many cases, businesses live or die by the thinnest of margins.

72 Hours?

This deal had been percolating behind closed doors for the better part of 2008, but the Mayor gave the city council only 72 hours to make up their minds on this? I think there was more thought and debate on whether Jumping Jacks would be cut out of aldermanic budgets for 2009 than this billion dollar deal.

When so little debate, time and consideration is given to a plan with such immense and long term ramifications to the city and its economy, what kind of faith can we have in the health of the democratic process in our city?

Don't answer all at once.

Too Long A Lease Term

75 years? Are you serious, 75 years? A lease term for the approximate lifespan of the average American male? A lease term that expires in 2083? Most of us reading this will be deceased by the time this lease ends. So many things could change over the course of 75 years. It's too long a lease term.

It's A Bad Deal

32nd Ward Alderman Scott Waguespack, who was one of the five council members with gonads of steel that cast a nay vote against the deal, believes the asset has a value closer to $4 billion.

Mayor Daley has so tragically mismanaged the city's budget, in my opinion, that it put the city in such a desperate position that it was forced to sign a deal that grossly undervalued this valuable revenue-generating asset.

With the smell of desperation wafting over the city, Morgan Stanley and the other bidders delivered insulting proposals for the city's meter system. The city, desperate for cash like a crack whore chasing a fix, had no choice but to accept the cash and take it in the ass.

The black hole that was called the 2009 budget was so dark and deep, according to the city's own numbers, the entire $1.16 billion will be appropriated in the first four years of the 75 year lease! What kind of financial management is that? It's like the city took a pay day loan out on the city's parking meters!

But Waguespack disagrees with my assessment. He believes there were at least several other alternatives to a 75-year deal for so little money.

"It was only a $150 million gap," explained Waguespack. "We could have issued a bond. It might be difficult but not impossible. It would cover us for this year. We would have to tighten our belt next year."

Everything Is Negotiable

It seems that whomever negotiated this deal went to the Neville Chamberlain School of Deal Making and Negotiation. That's because everything is negotiable.

Another alternative would be the city negotiating a much shorter lease term (10-25 years) for an upfront amount that filled the short term budget gap and then asked for a healthy percentage of revenue.

"We could have signed a 15-20 year lease," said Waguespack. "We don't need to mortgage our future for as little as $1.1 billion dollars."

What the Mayor, with the complicity of a majority of the city council, has done is fail to see past the short term budget problems and take the coward's way out. He has ignored the city's long term health for the sake of easy money.

Economist John Maynard Keynes once said, "In the long run, we're all dead." He must have said this with Chicago in mind.

GEEK EDITOR'S NOTE: A version of this piece originally appeared at Gaper's Block, one of the best, and one of The Expired Meter's favorite Chicago news and information websites--besides Huffington Post, of course.

Check out The Expired Meter for all sorts of Chicago parking news, tips and tricks to fighting parking tickets and red light camera tickets.

Comments

[PerryWhite]

Who now writes tickets for meter violations? For non meter parking violations? Who pays these employees? Who adjudicates these tickets and who pays tfor those people, office space, etc? Who receives the fines for meter violations? Did we privatize the revenue and keep the costs public?

[The Parking Ticket Geek - Huffpost Blogger]

Parking enforcement and administrative hearings on tickets are still handled by the city.

If you think about it, the city can make much more revenue slapping tickets on your car at $50 a pop than getting paid 25 cents an hour from parking meters.

[petsounds]

This is one of the many Daley-esque reasons that I am moving out of Chicago--out of Illinois, in fact--next year. I freelance, so I can live where I want, and I used to want to live here. Daley, AKA The Humungous Mayoral Ego, has sacrificed so much of what made this city--where I planned to spend the rest of my life--a pleasant place for people to live. Daley is interested in playing to tourists, not residents, and the quality of life has gone down dramatically and will clearly continue to plummet under his "leadership."

Between Daley and Stroger--and the aldermen and commissioners who lack the guts to stand up to them--Chicago has become a place that middle-class residents have to endure, rather than enjoy living in.

[stagebandman]

I agree completely. I am a musician, and though I live in the burbs, I play in the city at least once a month, and the high cost of parking is already way out of hand. All of the mayor's efforts to raise city revenue appears to be driving business out of town. The price of this move, in many ways, is way too high.

[AnotherMcIntosh]

"this lease deal is just one of many anti-driver policies (red light cameras, two ticket boot threshold, street sweeper cameras, etc.)"

And the pot holes, the endless pot holes which are only temporarily fixed with sub-standard road materials.

[LeftRight]

What I find disturbing is the fact that Daley wanted to do this with a price tag of $1 billion. On the other hand, at the CURRENT rate (or previous at this time of day.....) they would have been making MORE than that over the life of the lease, which means increasing the meter rates by one half the increase of the private company would have STILL been a massive increase in the city coffers!

[JGatsby]

"I think government privatization of some public services and assets can be a very good thing." Really? Can you give some examples where this has worked? All the ones I can think of: schools, military, prisons, have been total failures. Unless your idea of "a good thing" is poorer service at a higher price.

[Eric8869]

Well the Phone Companies and Airlines were MUCH better when they were not privatized. Competition led to higher prices and bad service.

[LeftRight]

They were privatized, but they were MASSIVELY regulated.....

[coolmaiden]

It's nice not owning a car.
But also, not so nice relying on the CTA in the wintertime.

[Eric8869]

I spent 20 years not having a car in Chicago - luckily to live in a city where that is possible,

However one day I realized I was so stressed out dealing with horrible management of the CTA that it was detrimental to my health. Waiting 45 minutes for a bus that should be there in 20 and then it arriving so crowded I couldn't get on it. (and 2 more following)

I decided life was too short to be on a urine smelling train or waitng 45 minutes in the cold.

I'm driving and it's more expensive but I feel so much better. The CTA stinks.

[SiberianRat]

Yeah, it's a Catch 22 of the worst kind: The horrible state of the CTA is one of the reasons I left Chicago after calling it home off/on for 21 years. I didn't want to get a car (see article above for one of many reasons), but the bus delays and subway slow zones were completely stressful. Daley and the city government have completely failed the people when it comes to public transport--COMPLETELY failed! I now live on the other side of the world, in a much poorer country, where the subway comes every 4 minutes (nearly without exception) and buses/trams are pretty reliable (although often quite crowded). I of course didn't come here for the public transport, but it's sure nice to not have to worry about whether it's going to come in a reasonable amount of time or not.