The Chicago parking meter lease is not just a bad deal that happened in the past. It’s an ongoing problem year after year. The Chicago Sun-Times just reported that the vendor’s annual revenues are now up to $134.2 million, meaning they will recoup the full amount they paid for the concession by 2021 – with 62 years left on the lease. The investors have already pocked $927 million. That doesn’t account for the time value of money, but even if you discount it back, this is looking like a good deal. (Just over the next decade, assuming revenues remain flat, that would equate to a discounted $384 million at a pretty high discount rate of 10%).
In more bad news, Emanuel had bragged that he’s significantly reduced the penalty payments that the city had to make to the vendor for closed parking spaces and the like. But that is now back up to $21.7 million per year.
In short, thecity:
- Sold off rights to on-street parking revenues for 75 years for $1.1 billion, then promptly blew the money such as that residents have nothing to show for it.
- Converted what used to be $23.8 million in annual revenues for the city and turned it into a $21.7 million expense – a $45.5 million per year swing in a city with serious financial problems.
- Created barriers to repurposing on-street real estate for things other than parking, such as bus lanes, widened sidewalks, green space, etc.
- Still has 65 more years to go