Sunday, August 2, 2020

The dumbest deal of all time!

Parking meter deal Chicagoans love to hate gets worse, brought to you by Richie Daley

Chicago’s parking meters raked in $138.7 million in 2019. All told, private investors have earned $1.6 billion. That’s nearly $500 million more than their initial, $1.16 billion investment — with 64 years worth of parking meter revenues to go.

By Fran Spielman Aug 2, 2020, 9:00am CDT


One of the parking kiosks installed after Chicago’s parking meters were privatized. Sun-Times file



The stay-at-home shutdown triggered by the coronavirus turned the streets of downtown Chicago into a virtual ghost town. But private investors who leased Chicago’s parking meters had plenty of cushion to absorb the blow.

Chicago’s parking meter system raked in another $138.7 million in 2019, allowing private investors to recoup their entire $1.16 billion investment and then some with more than 60 years to go on the 75-year lease.

Four underground city-owned parking garages took in $34.8 million in 2019, while the privatized Chicago Skyway generated just under $92 million in cash, separate audits of those assets show.

Not a penny of those revenues went to ease the burden on Chicago taxpayers that will almost certainly get worse to fill a $700 million hole in Mayor Lori Lightfoot’s $11.6 billion 2020 budget and plug a $1 billion gap next year.

That’s because all three assets were unloaded by former Mayor Richard M. Daley, who used the money to avoid raising property taxes while city employee pension funds sunk deeper in the hole.

Of the three deals, the 2008 parking meter deal has been the biggest political nightmare for the two mayors who inherited it and for Chicago aldermen who granted that deal lightning-fast approval.

Steep rate increases would have been bad enough. Rates downtown, for example, increased from $3 an hour in 2008 to $6.50 an hour in 2013.

But broken and frozen pay-and-display boxes and overstuffed and improperly calibrated meters that overcharged motorists made it even worse.


Motorists were initially so incensed by the rate hikes, they vandalized and boycotted meters, leading to a dramatic drop in on-street parking. Revenues recovered until the pandemic.

The latest financial report by KPMG provides even more proof of what a great bit of business that deal was for the private investors, who hail from as far away as Abu Dhabi.

Chicago Parking Meters LLC revenues increased by 4.5 percent last year— by $6 million—to $138.7 million, the audit shows.

The city had been collecting only about $23.8 million in annual meter revenue in 2008, the last year before CPM took over the system.

Factoring in the newly reported figure for 2019, private investors have already extracted $1.6 billion from the deal, in part by refinancing three times.

That’s nearly $500 million more than their initial, $1.16 billion investment with 64 years worth of parking meter revenues to go.

The latest refinancing — for $1.2 billion — was completed on June 30, 2019.



The contract requires the city to reimburse investors for every space that became temporarily unavailable — whatever the reason.

In 2012, those “true-up payments” added nearly $27 million to the parking meter company’s bottom line before Mayor Rahm Emanuel was able to tweak the fine print in 2013.



The new audit shows true-up revenues that surged by 38 percent in 2017 dropped to $11 million in 2019.

Budget and Management spokeswoman Kristen Cabanban had no immediate comment about the latest audit. Scott Burnham, a spokesman for CPM, could not be reached.

When Emanuel renegotiated the meter deal, some aldermen claimed the mayor made it worse by swapping three extra hours of paid parking in River North and one extra hour elsewhere for free neighborhood parking on Sundays.

Results of the latest audits were provided to the Chicago Sun-Times by attorney Clint Krislov.

As the Director of IIT Chicago-Kent’s Center for Open Government law clinic, Krislov has reviewed dozens of transactions to date and provides an annual analysis of each year’s results.

Krislov tried to get the meter and garage deals declared illegal on grounds that the city can’t legally sell the public way.



He further claimed the garage deal both restricted development in the Loop and subjected the city to giant penalty payments, like the $62 million the city spent to compensate the owners of the Millennium Park and Grant Park garages for allowing the Aqua building, 225 N. Columbus, to open a competing garage.



Both lawsuits were thrown out after the Emanuel administration defended the deals.

“The garages and the Skyway don’t affect people as much day-to-day because you don’t see ’em. It’s the meters that everybody focuses on. But all three of them together have deprived the city of $3 billion that it really needed, regardless of the COVID virus business,” Krislov said Thursday.

After last year’s audit, then Mayor-elect Lori Lightfoot vowed to take a fresh look at the widely-despised parking meter deal and try and find some way to either break the lease, shorten it or sweeten the sour terms for Chicago taxpayers.

She called it a “burr under your saddle” that “keeps rubbing and rubbing” but has since done nothing to remove it.

On Thursday, Krislov urged the mayor to do something.

“She should challenge the deal on the grounds that it’s an illegal sale of the public right of way and the deal as structured constitutes essentially the city taking out a bond for longer than the constitutionally-permitted 40 years,” he said.

“You can view this as a one-time lease payment. But it’s really a loan of $1.16 billion that was secured by transferring the city’s right of way.”

14 comments:

  1. Follow the money! How many crooked politicians got their wallets fattened to hoist this clear fraud upon the public?

    ReplyDelete
  2. Anonymous8/02/2020

    Think of how much less the tax increases for the over priced pensions would have been.

    Another example of lawyers don't know anything about finance, accounting or economics. Then if they don't have brain one , like Richie they run for public office

    ReplyDelete
  3. Anonymous8/02/2020

    I was at the rally for the Chicago Police today, Sunday, on 111th Street honoring the Chicago Police who put their lives on the line everyday protecting us from the chaos, communism and anarchy our government is allowing to happen. Curiously absent were Alderman O'Shea, Senator Cunningham and Representative Hurley. OK Mr. tough guy blogspot master of the universe where were they since according to you they care so much for our community. Your'e as full of crap as the rest of them. This is what I'm so f**cking mad about. This has not gone unnoticed.

    ReplyDelete
    Replies
    1. Anonymous8/03/2020

      Take a pill

      Delete
    2. Anonymous8/03/2020

      Just another,"I don't give a shit moment" by the 19th ward democrats. Wake up people. They could not care less about any of us. They just want us to vote for their communist/socialist agenda.

      https://abc7chicago.com/community-events/mount-greenwood-marchers-call-on-lightfoot-residents-to-support-cpd/6349729/

      Delete
  4. In the November 1988 General Election, Cook County Voters could have chosen Republican Terry Gainer over Democratic Incumbent Cook County State's Attorney Ritchie Daley. ⊙.☉

    Instead, most voters chose Daley, knowing he'd run for Chicago Mayor in 1989. Had Daley lost in 1988, he might have been toast in 1989. Sawyer, Evans or someone else would have been elected Chicago Mayor in 1989. (@_@)

    ReplyDelete
  5. Alderperson Matt O'Shea, State Senator Bill Cunningham and State Representatives Fran Hurley and Kelly Burke rock da house baybay!
    Four more years! Four more years!
    We must support these wonderful Irish American public servants!
    (@_@)

    ReplyDelete
  6. Anonymous8/03/2020

    This deal was about money. The connected and the scumbag politicians made big$$$ under the table and for so called " Legit Services Rendered." I could only imagine how many briefcases of untraceable cash were handed out to seal this scam, I mean deal.

    ReplyDelete
  7. Anonymous8/03/2020

    And Richie was afraid someone would run against him for mayor the next time after he was elected.

    So they made the Mayors race open like the Aldermanic races. (non partisan). The first person to get over 51% wins.

    As a result we have the Mayors race as it was last time where it has become a lottery where 21 Tom, Dick and Larry's run and the people running are anonymous. Nobody knows anything about them. As a result we end up with the mess thats elected now.

    Maybe they ought to change it back like it was?

    ReplyDelete
    Replies
    1. It's 50% + 1, which is 50.01% . The nonpartisan system took effect in 1999, 10 years after Richard M. Daley first won. ರ_ರ

      Regardless of voting system, nobody but Harold Washington could beat Daley. ರ_ರ

      Delete
  8. Where are the complaints about 19th Ward Republican (GOP) Committeeperson Steve Graves? ತ_ತ

    Graves barely has a website. Is he supporting Marc Fricilone, for Congressperson (3rd District)? Is he supporting Pat O'Brien, for Cook County State's Attorney? ಠ_ಠ

    In a 2018 Chicago Sun-Times' interview, when running against John Daley for Cook County Commissioner, Graves had one word and one sentence answerers.
    ಠ﹏ಠ

    ReplyDelete
  9. Anonymous8/03/2020

    This deal was like a payday loan from hell for Chicago only 64 more years to go!

    ReplyDelete
  10. Youth for Nixon8/03/2020

    i will never forget the abc news when short shanks getting on a plane said to the cameras "going to china, sold the skyway" poof gone

    ReplyDelete
    Replies
    1. Anonymous8/03/2020

      Few people and trucking companies even take the skyway now the tolls are too much think it's like $40 for a semi truck now just route yourself around.

      Delete