Opinion: Emanuel’s Parking Meter ‘Fix’ Could Make Things Worse

Mayor Rahm Emanuel announces changes to the parking meter lease deal at a press conference Monday. Photo credit Ted Cox/DNA Info Chicago

Chicago Mayor Rahm Emanuel may have done the impossible.

He may have actually made Chicago’s reviled parking meter lease deal even worse.

At a press conference Monday morning Emanuel announced a settlement in the ongoing legal battle between the city and Chicago Parking Meters, LLC (CPM).  Initially, it sounded like the city had indeed arm twisted some mild improvements to the universally despised deal out of CPM.

But as details of the proposed settlement emerged over the course of the day, Emanuel’s allegedly new and improved parking meter lease deal looks like it could make things even more challenging and expensive for Chicago drivers.

The mayor wants to allow Sunday drivers to park for free. On its surface, the concept evokes the idyllic image of church-going Chicagoans driving to worship early Sunday morning. But at his press conference, the mayor conveniently left out the important fact that meters still must be fed Sunday downtown in the Central Business District.

Since traffic and parking volume is lowest on Sundays, it’s certainly not much of a concession on CPM’s part.

Inexplicably however, Emanuel agreed to extend meter enforcement by one hour at most metered spots so that drivers must feed meters Monday through Saturday until 10 PM.

Adding even more salt to the wound, the mayor targeted the River North entertainment district and wants to allow CPM to charge for meters until midnight seven days a week–a three hour increase.

While City Hall estimates CPM will see an $8 million loss from allowing free Sunday parking, it says the company will make up $7 million of that amount up with the extended meter hours. Overall, Chicago drivers won’t see any benefit from these changes.

But many people are skeptical the city’s math will hold up. 32nd Ward Alderman Scott Waguespack thinks its possible CPM could actually end up generating even more revenue from these changes.

“It’s essentially going to be a wash or we’re going to be paying more,” said Waguespack.“Restaurant patrons, bar patrons, they’ll all be paying more. That would probably make them (CPM) a lot more (money).”

Initially, Emanuel’s refusal to pay CPM for street closure bills last year seemed like a brilliant bargaining tactic–a tactic that would allow the mayor to fulfill a campaign promise to force CPM to renegotiate the meter deal. It could have been a rare chance to make needed changes to the steaming pile of parking pain former Mayor Richard M. Daley left behind for Emanuel to clean up.

The most glaring example is the meter rates themselves. Emanuel was unable, or unwilling to find a way to lower Chicago’s parking meter rates–far and away the nation’s highest.

But Chicago’s current three tiered rate system could have been exploited to lower rates overall. That’s because the inflexibility of the current rate structure keeps meter rates artificially high and most likely limits CPM’s revenue.

Under the current rates, someone parking in the low income Austin neighborhood pays the same as the driver in Wrigleyville who finally snags a parking spot after circling the block for 20 minutes.

Why didn’t the mayor sell CPM on a demand based pricing structure instead of the current system? By allowing a sliding rate schedule based on parking demand, rates in low income, low demand areas would drop while rates in high congestion areas would be allowed to rise.

This would allow average rates for Chicago drivers to decline overall while keeping CPM’s revenues constant or even higher than they are now. Not only would this make metered parking more affordable to more drivers, it would also serve as a defacto congestion tax reducing parking congestion as well as minimizing vehicles circling neighborhood blocks  searching for an open spot.

San Francisco has been experimenting with this model recently and initial reports seem to indicate diminished parking congestion and increased meter revenue.

Perhaps the only positive aspect of what Emanuel is proposing is the concessions from CPM on the tens of millions in street closure bills the company submitted. The mayor claims the company agreed to slash the $49 million in these bills to just under $9 million. Going forward, he says his administration was able to convince CPM to change the way street closure claims are calculated saving the city $20 million a year or over a billion dollars over the next 71 years left in the term of the lease.

But the Emanuel Administration is not providing details or any data to support their claim. So at this point, no one really knows for sure if any of these savings will actually materialize in the long run.

From the driver’s perspective, Emanuel’s plan makes little sense.

And based on the mayor’s reputation for being a tough as nails negotiator, the supposed concessions he’s gotten from CPM are impressive in how pathetic they are.

Is it possible Mayor Emanuel got outmaneuvered by Chicago Parking Meters?

It certainly seems so.

23 Responses to Opinion: Emanuel’s Parking Meter ‘Fix’ Could Make Things Worse

  1. Drew says:

    Out maneuvered? Not likely.

    Paid off by a check to his Hollywood brother is more like it.

  2. Mike in Ravenswood says:

    “Is it possible Mayor Emanuel got outmaneuvered by Chicago Parking Meters?”

    No, he supports corporate profit over the needs of the citizens of Chicago.

  3. [...] Could the Parking Renegotiation Makes Things Worse? (DNA, Expired Meter) [...]

  4. nonya says:

    I suspect that while the CBD/River North extended hours well more than offset the Sunday piece, what that’s also offsetting (not announced) is the “savings” from street closures, etc.

  5. Jeff says:

    Watch and see CPM make a giant campaign gift to Emanuel, to thank him for this great big fat windfall. Only Emanuel has the gall to claim that this municipal giveaway is somehow a “win” for the people of Chicago.

  6. Jeff says:

    And how does it make sense to add 3 hours of parking in River North, one of the few areas of the city not plagued with vacant storefronts? Like everything else he does, Emanuel makes the choice that is guaranteed to drive business out of the neighborhood. Then again, what do you expect from a Mayor who can’t figure out how to turn a profit on the glorified picnic known as Taste of Chicago.

  7. Drew says:

    More decisions from a One Term mayor.

  8. Anonymous says:

    Rahm Emanuel didn’t get much lemonade from the supermassive lemon. I wonder if Daley planned on retiring after making this horrific parking meter deal – knowing it would be his Blizzard of 1979

  9. Drew says:

    I wonder if a Federal Complaint could be filed naming Daley and Company (all the alderpersons that voted FOR the Leases) under RICO and Criminal Conspiracy to Defraud the City and the Taxpayers.

  10. ejhickey says:

    just in case some people have forgotten, LAZ parking is now totally owned by a soveriegn wealth fund based in the Kingdom of Dubai.

  11. David says:

    It’s easy to get the contract canceled. File for bankruptcy. This is exactly the kid of contact that gets canceled in bankruptcy.

  12. Neal says:

    “… based on the mayor’s reputation for being a tough as nails negotiator …” – like his caving in to the Chicago Teachers Union that gives them a 16% raise? Can we say “paper tiger?” I cannot believe that all the over-paid lawyers and thugs in Chicago government cannot find a way out of the lease deal. Legal or otherwise. Release all the documents and let the citizens have a go at it. Offer a big reward.

  13. B says:

    The people who pay for parking weren’t a party to this negotiation and like most negotiations the result is to benefit the parties that were present at the expense of those who were not.

    Then again there is the true nature of those parties as well….

  14. David says:

    The contract with the Meter Company actually has been released. I have looked at it. It was clearly written by the Investment Group and is just about as one sided a contract as I have ever seen. Any change which falls “primarily” on the metered parking people is considered to be an “event” which triggers compensation. Cook County imposes a parking tax, Laz goes to the city and gets compensation. The State imposes a parking tax, Laz goes to the city and gets compensation. The Feds impose a parking tax, Laz goes to the city and gets compensation. It also requires the City to enforce the meters or… yes Laz gets compensation. So, for example, if the lawsuit challenging the ability of the City to Act as enforcer for Laz were to be won, the City would pay. And the term is broad enough that it is just about impossible to get around. The one way, I think, to do this is to add a requirement that any entity that maintains a device or machine for “self-service” use of credit and debit cards for transactions exceeding $5.00 must have an attendant within X feet of the the machine or pay a tax of X dollars per machine per day. This would not fall “primarily” on the Laz Boxes. The law would apply to grocery store self-check outs, parking lots, Redbox and similar machines, gas stations and the like. Most of these places already have attendants available, and those that do not would likely only have one or two machines and thus be willing to pay the license fee. ($25 per day and 3000 meters produces about 27 Million a year in “revenue” for the City. Not as much as the City would like, but at least enough that the City likely will not lose money on the deal)

    The other alternative is to file Bankruptcy and seek to have the contract cancelled. Bankruptcy is often used to get rid of “bad contracts” and I could see the City using this to terminate the Garage Leases (and the provisions which require the CITY to pay if another garage is allowed to open), the Meter Leases, and the Skyway lease. And I suspect that the City would take the opportunity to cancel all of the teacher contracts as well.

  15. Jeff says:

    David says:

    “The other alternative is to file Bankruptcy and seek to have the contract cancelled. Bankruptcy is often used to get rid of “bad contracts” and I could see the City using this to terminate the Garage Leases (and the provisions which require the CITY to pay if another garage is allowed to open), the Meter Leases, and the Skyway lease. And I suspect that the City would take the opportunity to cancel all of the teacher contracts as well.”

    My comment:

    Even if Chicago could successfully file and emerge from bankruptcy, I think that would leave the city with a credit rating somewhere between the credit ratings for North Korea and Somalia. Not only would that preclude financing for any major city project, it would scare off the businesses that might otherwise be considering an investment here. Seems like the cure might be worse than the disease.

  16. Anonymous says:

    And Heff, if you use the Chapter 11 bomb, no teacher would ever want to work in Chicago ever again. You fo through all that college to work for minimum wage for UNO while the CEO gets millions? How do you pay off the college loans and the car with the “The Gauntlet”* package?

    * See the flick “The Gauntlet” for details

  17. B says:

    It has been said that in order to get control and everything of value the aim is to bankrupt all levels of government in the USA. This is what international and wall street bankers do. They’ve done it third world countries.

    If Chicago goes the route of bankruptcy we can be assured that the parking contract would continue and there would be more such contracts with large financial institutions. Contracts which will allow these institutions to extract money from the people and ultimately make all the rules.

  18. The Parking Ticket Geek says:

    David,

    I want you to know how much I appreciate you and all the intelligent and knowledgeable people that comment here.

    This type of insight is so darn enlightening and again, VERY appreciated.

    Mike

  19. This is the best analysis I’ve read of this proposal so far, particularly referring to the demand-based pricing idea. That would be a win-win. Efficient parking management benefits the businesses and reduces congestion. You end up paying more to park in some areas, but you’re able to find a spot more easily. And the the city will make more money off of successful businesses than it could through the meters…so why not? No one is asking for free Sunday parking. Residents in busy areas will be so happy to be able to park their car on Saturday evening and not have to move it until Monday! Businesses who want customers on Sunday will get the short end of the stick.

  20. The Parking Ticket Geek says:

    Hey Lindsay,

    Thank you for your kind thoughts. You made my day.

    I have one minor disagreement with your comment. There is a vocal minority of people who attend churches, mainly on the south and west sides, that have been asking for free metered parking on Sundays. The problem is 1) they don’t want to pay and 2) If they pay, if the service goes over 2 hours, they have to run out and feed the meter before service is over.

    I don’t agree that the meters should be free on Sundays for these reasons. If everyone has to pay the meters, there shouldn’t be exceptions for whatever reason. Once you start down that path, then the system ends up favoring some but not others and then you have chaos.

    Making Sunday parking free is a political ploy on the Mayor’s part.

  21. Drew says:

    Separation of Church and State for a reason.

    The Store Front Reverunds that are whining about this are already driving around in Lexus and Cadi’s and Audi’s and high end SUV’s.

    They just want the meter money from their “flock” to hit their bank balance and not CPM’s.

  22. Sue says:

    Where there’s a will there’s a way.
    O.K., so there’s a clause in the contract that stifles competition from nearby parking lots, but not from distant lots. So, if we can’t beat them in court, let’s take it to the street. I mean this IS Chicago. Are we really going to let a bunch of Wall Street quants and Princeton shysters roll right over us?
    It’s got to be like the Montgomery bus boycott. Put them out of business. NOBODY parks at any meter ANYWHERE.
    The city uses empty lots that are just far enough away so that they are beyond the noncompete area, offers FREE parking, and runs shuttle buses. We won’t get 100%, but we might be able ot hurt them enough to get them to give up something. Could force ther value of their bonds down.
    And, at the very least, it would bring the whole city together for a common cause. It would be therapeutic. We’ve suffered enough with this deal. We need a little therapy.

  23. I stand corrected! There are people asking for free Sunday parking. Doesn’t everyone want as much free stuff as possible? The problem is that providing parking isn’t free to the city. And the people who should be paying for it are the drivers–not the tax payers, not the business owners, not the pedestrians and bus riders. I hate paying for parking as much as the next person, but I understand the supply and demand principles behind pricing. And so I end up walking further from free parking or riding my bike…Which is exactly why pricing works. I do think the time limits should go and turnover should be regulated by demand-based pricing.

    For more on parking policy, see the report I wrote last year: “Parking Strategies to Support Livable Communities” http://1.usa.gov/CMAP_Parking

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