Parking Garage Mistake Costs Chicago Taxpayers $58 Million
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.”