A newly released audit shows revenue generated by Chicago’s privatized parking meters set a new record in 2024. NBC 5 Investigates dug deep into the deal to privatize Chicago’s meters. Our main question was: How much has the city lost out on in this deal?
“It’s just one of those deals that I would beg people never to replicate anywhere in the United States,” 32nd Ward Ald. Scott Waguespack said.
Audits from accounting firm KPMG show in 2024, the parking meters generated $160.9 million in income for the private company Chicago Parking Meters, LLC. That surpasses the previous record set in 2023 of $150.9 million. The income has increased every year since 2020.
The lease agreement with Chicago Parking Meters LLC expires in 2083. The group of investors headed by Morgan Stanley paid the city nearly $1.157 billion dollars. In exchange, the private company gets revenue from 36,000 parking meters for 75 years.
Then-Mayor Richard M Daley was ahead of his time when it came to privatizing public assets, starting with the Skyway in 2005, the first time an existing toll road was privatized in the country. Daley brokered the parking meter deal to address short-term budget needs during the 2008 financial crisis and avoid raising property taxes.
“If we didn’t have money for a long-term debt, you’re talking about a serious economic crisis then for Chicago,” Daley said at the time.
NBC 5 Investigates reviewed KPMG audits showing the meters generated $1.97 billion through 2024. In total, it only took about 10 years for the company to recoup its initial investment. The parking meter company declined comment, but its website touts the $38 million it spent modernizing the parking system with new meters, a refund option and 24-hour customer service.
Reflecting back 17 years later, Waguespack likens the deal to a fire sale. City Council members had mere days to review the documents before voting. The final tally was 40-5 in favor of the measure. Multiple aldermen later said they regretted their votes. Two of the “no” votes were Waguespack and former Alderman Leslie Hairston.
“There became more questions than answers, and nobody had any answers,” Hairston said.
Then-Inspector General David Hoffman’s 2009 report found that the city was paid “conservatively, $974 million less” than the city would have received from 75 years of parking meter revenue if it kept the meters. Waguespack believes it was worth even more than that.
“(My team and I) immediately ran the numbers, realized that the deal could be worth $5 to $10 billion as opposed to $1.15 (billion),” Waguespack said.
The Better Government Association has called the deal “a lesson in worst practices.”
“Parking rates went up more than triple, the extension of paid parking across the city, 24 hours in places where really people hadn’t been charged for parking previously. It really was a big hit to the pocketbooks of people throughout the city,” said David Greising, president and CEO of the Better Government Association.
As part of the deal, the city has to pay the *parking meter company annually in what’s come to be known as “true-up” payments. The payments are reimbursements for when parking meters are taken offline for big festivals, re-development, even construction.
Along with that, the city gave up more than seven decades of revenue from the parking meters. Before the deal, the meters generated about $20 million annually for Chicago, money was used to pay for city services.
“If we had quadrupled it or even doubled it … the annual revenue could have been between $50 to $100 million with annual increases or increases every couple years. We do the same thing for the CTA and for other transit agencies. You have to raise the cost of taking a ride just to pay for everything from the pensions to the infrastructure,” Waguespack said.
Daley’s administration also argued the money leftover after the city covered its budget shortfall would provide a long term financial cushion. That did not happen.
“They basically burned through all those funds within two years,” Waguespack said.
“Had we had the opportunity to have a hearing, a public hearing, and ask questions — I think it would have made a difference, and I think we could have had the opportunity to do something that benefited the city better,” Hairston said.
Mayor Rahm Emanuel negotiated changes to the deal in 2013 and Mayor Lori Lightfoot saw an opportunity during the pandemic. Her efforts, however, will likely end up costing the city millions when arbitration is done.
“The lawyers on the other side were really, really good, and the lawyers and negotiators on the city side were way over their heads,” Greising said.
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