Chicago to pay $20 million to parking meter company in 2018
As a continuing part of a bad deal, Chicago taxpayers will pay Chicago Parking Meters LLC $20 million.
Chicago’s notorious parking meter deal appears to be the gift that keeps on giving.
The city will pay $20 million to Chicago Parking Meters LLC, or CPM, in 2018 on top of the revenue that will be collected due to a provision in the contract. Under the terms of the deal, the city must reimburse CPM annually for lost revenue as a result of spaces being temporarily taken out of service.
Mayor Rahm Emanuel had an opportunity early in his term to truly fix or end the parking meter contract, which extends until 2083. Instead, he sold revisions that would save tens of millions of dollars. Now, when construction projects temporarily take parking meters out of service, the companies leading those projects must pay the city to help with the “true-up” costs. However, the albatross of a contract remains.
The Chicago City Council chose to accept the contract negotiated by then-Mayor Richard M. Daley rather than vote to raise rates. Instead, under the cover of the contract, the City Council agreed to raise rates for CPM as part of a five-year schedule, including a quadrupling of rates in the first year alone. This has left Chicago with the most expensive parking in the country.
Taxpayers have little to show for it. Former Mayor Richard M. Daley, as a budget gimmick to fill budget gaps, had used nearly all of the money from the sale of the parking meters.
Since taking over the meters, Chicago Parking Meters has received nearly $1 billion in revenues and is expected to make back its initial $1.15 billion investment by 2020. These numbers don’t account for the annual “true-up” payments, which have been over $100 million in total since the deal started. These payments, alone, will nearly cover the initial investment, leaving taxpayers on the hook to cover for billions in lost revenue.
But the parking meter deal is not the only bad deal Chicago has made. In 2005, Chicago sold rights to the Chicago Skyway for $1.7 billion. Similar to the parking meters, most of that money was used to fill budget holes. Just 10 years after Chicago sold the Skyway, it was resold again, this time for $2.8 billion. Taxpayers are left paying more, whether they use these services or not.
This latest payment should be a reminder to all Chicagoans of the pitfalls of taking the “quick fix” to balance the budget. Unfortunately for taxpayers, barring reform, there will be an annual reminder of this bad deal for the next 65 years.