Bike Walk Lincoln Park in their latest post gives a summary of how the parking meter lease was devised and approved in 2008. Then they point out how a majority if the revenue has been spent, including over half of a “rainy day fund” (as former Mayor Daley called it). But Bike Walk Lincoln Park mentions a report issued by the same company the Daley administration hired to advise it through the parking meter privatization process:
After receiving heavy criticism, William Blair and Company, the group that advised the Daley folks through the parking meter lease deal process, published a document defending their recommendations.
Much of the document seems like a desperate attempt to shine a good light on an all-around unfortunate situation, but one of their arguments resonated with us: The city’s residents got screwed under the lease deal — we’re paraphrasing from the report here — but only if you assume that the parking meters will continue to generate equal or increasing amounts of revenue in the future, which is not necessarily the case.
I had never heard of that document. Read the rest of the article, or download the report for yourself.
This article was found in the Grid Chicago Network, a collection of sites that write about active and sustainable transportation in Chicagoland.
9 thoughts on “Parking meter lease: 72 years more to go”
This lease deal was troubling from the beginning for many reasons. I think this combination will cause a lot of problems in the near future and down the road. “CPM LLC now has the lawful right to earn parking fees
on every single 20-foot stretch of curb that was already a metered
parking space on December 4, 2008.” “…it may be that individual motor vehicles are replaced
by other forms of personal transportation that do not require as much or
even any street parking.”
Yeah, like riding a bike. I wasn’t familiar with the document either, and reading it confirmed my worst suspicions.
WB&C don’t really pick up on the fact that actually, if we start using personal transportation that doesn’t require as much street parking (like scooters or smaller cars) but still requires street parking, then the lease actually GAINS value, since each vehicle, no matter what the size, currently pays an equal fee. So, two SmartCars easily fit into one 20-foot stretch, and then CPM LLC currently gets twice as much revenue from the space.
On the positive side, the city did retain the right to set meter fares after the first five years, so maybe they can create a multi-rate system based on vehicle length to encourage people to choose smaller vehicles.
That seems like a case of “smart omission”. It’s well-known that a payment collection system that oversees a variable number of spaces collects more revenues than a “one meter per space” system because, as you mention, cars will only occupy the space they occupy. A Smart car will only occupy 12 feet while a Camry will occupy 18 feet.
“On the positive side, the city did retain the right to set meter fares after the first five years…”
I didn’t know that. That’s good to know.
“…so maybe they can create a multi-rate system based on vehicle length to encourage people to choose smaller vehicles.”
I’m sure you saw the “controversy” in Rahm’s 2012 budget that lowered the heavy vehicle weight threshold and increased the sticker fee for heavy vehicles.
Yes, the city retains the right to set the meter rates after 2013, but of course, doesn’t gain revenue from setting any higher rates. The city also retains the revenue from parking violations (i.e. tickets), as well as the tax portion of the meter fees. I saw nothing in the contract about the tax rate being pegged to the meter rate, and nothing keeping the city from lowering the meter rate (while raising the tax rate) after the first five years, so there’s another opportunity for city gains. The whole deal sets up a very strange incentives.
Some background info on the lobbying activities of the companies involved:
Chicago Parking Meters LLC: http://chicagolobbyists.org/clients/chicago-parking-meters-llc
William Blair & Co: http://chicagolobbyists.org/firms/william-blair-and-co
I’d love see to see data for William Blair & co for 2008 & 2009, when the parking meter lease was being developed and “feelers” were put out in the market.
And it’s interesting that Chicago Parking Meters, LLC, the “front company” Morgan Stanley created (they have the same mailing address in New York City), is still lobbying the City in 2010.
Derek, thanks for adding those links. The ChicagoLobbyist site is coming along incredibly!
It’s crazy how the meter contract has made street parking so expensive. A lot of times it’s cheaper to put it in a Chicago parking garage. You can see prices and rates at Chicago parking garages at http://spothero.com
I don’t think you can say that the parking meter contract has “made street parking expensive”. Was parking not expensive before the parking meter contract? Might rates have been raised without a parking meter contract?