Parking Garage Mistake Costs Chicago Taxpayers $58 Million

Did anyone read the fine print?

That’s the question people in City Hall are probably asking after a ruling from an arbitrator directed the City of Chicago to cough up $57.8 million to compensate Chicago Loop Parking, LLC for a breach of contract according to the Chicago Sun-Times.

Under former Mayor Richard Daley, back in 2006 the city signed a 99-year lease for $563 million to allow Morgan Stanley (now Chicago Loop Parking, LLC) to operate four city owned parking garages–Millennium Park garage, and the Chicago Park District’s Grant Park North, Grant Park South and East Monroe Street parking structures.

But the contract prevented the city from licensing any new parking garages or lots within a certain distance of the garages they managed. But, according to the Sun-Times story, within months of signing this lease agreement, the city allowed competing parking to be constructed in the nearby Aqua building and issued a license to Standard Parking to operate the parking garage.

Chicago Loop Parking believes they were losing substantial revenue from the parking at the Aqua building and originally asked for $200 million in damages.

While the city has 90 days to appeal, according to the contract, the arbitrator’s ruling is binding.

Morgan Stanley is also the main investor in Chicago Parking Meters, LLC, the lease holder of the 75-year lease for all of the city’s metered parking spaces.

CPM and the city are in arbitration over what the meter company claims is lost revenue due to times when street closures keep parking meters from generating revenue (street repair, festivals, utility work, etc.) and for an overuse of disabled parking placards where drivers park for free at meters. CPM has billed the city for nearly $60 million.

Here’s the Sun-Times full story, “City of Chicago hit with $57.8 million tab in parking garage snafu.”

13 Responses to Parking Garage Mistake Costs Chicago Taxpayers $58 Million

  1. Drew says:

    Daley deliberately had his people violate these contracts and you can bet he managed to get a payoff from Morgan Stanley to ensure that their contract was beneficial if violated by the city.

    And there was a Daley at Morgan Stanley as I recall.

  2. Drew says:

    And this was no mistake or error.

  3. mark says:

    Why are the rouges who did these deals in prison?
    Why doesn’t the Great Rahm take action?
    He certainly does against the schoolchildren of Chicago.

  4. Paul says:

    How do they get $58m damages from just one fricken parking ramp?

    How much in campaign donations to city pols has Morgan Stanley made over the last 10 years?

    Would love to follow the money.

  5. The Parking Ticket Geek says:

    Alas…you are probably right Drew. It was most likely NOT a mistake.

  6. OIFVet says:

    I wonder how many more easter eggs have been set to hatch by Da Mare, and how many of them will just happen to benefit Billy Daley’s Morgan Stanley while Da Ballet Dancer plays the dunce. You know Billy, the guy who’s making lots of noise about installing himself in the guvnor’s mansion in Springfield town. In any halfway non-ethically-bankrupt country this crowd would be comparing notes about KP with Blago. But in this state and this country they just play the game of musical chairs, enriching themselves and their sponsors from our pockets. Hope they choke on those $58 mil.

  7. The Parking Ticket Geek says:

    Paul,

    I think part of the calculation of damages is based on the length of the lease which is…wait for it…99 freakin’ years!!!!

  8. david says:

    I wonder if it is time to carefully examine all of the long term city contracts, cut way back on sales taxes, spend everything the city can on infrastructure improvements and then file for Bankruptcy. Under Bankruptcy bad contracts can be canceled by the Federal Bankruptcy Judge. And the first to go, I think, could be the Laz contacts.

  9. The Parking Ticket Geek says:

    David,

    I think you may be on to something here. Hmmmmmmmm…..

  10. AnnoyedDriver says:

    Hi Geek,

    Can you list Municipal Code Ch. 9-64-150B here? Neither your links nor the city’s nor Amlegal works, so I cannot read the statute.

    I received a parking ticket for No Stopping/No Standing. The thing is, it was “Photo Enforced.” So I just got it in the mail. For the life of me, I cannot read the license plate on the “Notice of Violation” they mailed me, or in the online photo you can look at. Can I fight this on that defense, given that there is no way to even tell whose car it is if you cannot even read the plate?

    Thanks!

  11. The Parking Ticket Geek says:

    AnnoyedDriver,

    Very odd. I checked our link in the Blog roll and it seems to be working.

    Here’s the link to the muni code for 9-64-150B

    http://www.amlegal.com/nxt/gateway.dll/Illinois/chicago_il/title9vehiclestrafficandrailtransportati/chapter9-64parkingregulations?f=templates$fn=default.htm$3.0$vid=amlegal:chicago_il$anc=0-0-0-8831

    And here’s the language.

    9-64-150 Parking prohibited – Fire stations, railroad crossings and hazardous locations.

    (a) The commissioner of transportation is authorized to erect and maintain signs indicating no parking at any place within 20 feet of the entrance to any fire station, on the side of any street opposite the entrance to any fire station within 75 feet of the entrance, or within 50 feet of the nearest rail of a railroad crossing. It shall be unlawful to stand or park any vehicle in violation of any sign erected or maintained pursuant to this subsection.

    (b) The commissioner of transportation is authorized to determine places in which the standing or parking of vehicles would create an especially hazardous condition or would cause unusual delay to traffic and those streets or parts of streets upon which parking shall be prohibited, and to erect and maintain appropriate signs giving notice that standing or parking is prohibited. It shall be unlawful to stand or park any vehicle in violation of any sign erected or maintained pursuant to this subsection.

    Note how broad this language is. Depending on the details of your parking situation, you may be able to wriggle out of the ticket.

    Hope this helps.

  12. ugh says:

    Do people that work for the city government actually take pride in what they do? How could something like this been missed? How many people were sleeping on the job?

  13. Jeff says:

    Chicago may sell some downtown parking garages/lots – end parking perk for city employees:

    http://www.chicagotribune.com/news/local/breaking/chi-city-may-sell-downtown-parking-lots-garage-20140818-story.html

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>