The Parking Ticket Geek and The Expired Meter teamed up with CBS 2 News Thursday night to report on some pretty amazing data about Chicago’s parking meter system and the meter lease deal.
The information essentially confirms what most people knew already–Chicago vastly undervalued the meter lease deal by hundreds of millions of dollars.
That’s because with the higher rates and new pay and display meter units, the new meter company is raking in the revenue.
The internal documents obtained by CBS 2 and theexpiredmeter.com reveal that LAZ Parking projects $75 million in proceeds next year, the second year of the 75-year meter lease, with expenses of $15 million. That would be a net income of $60 million.
Read the entire juicy report, “New Data Shows City Losing Millions On Meter Deal,” and/or check out the video report here.
Posted in 
I suspect our beloved Mayor Daley is not stupid, but there exists two sets of city books just as many corrupt political organizations do. What the city “claims” to have received for the meter deal is on the public books and the additional revenue was put into the “TIF account”.
Even Oprah can’t take it here anymore and is moving to bankrupt California.
EPIC GOVERNMENT FAIL! Just like everything else they do…
Made it to national news too:
http://www.nytimes.com/2009/11/20/us/20cncmeters.html?_r=1&adxnnl=1&pagewanted=1&adxnnlx=1258825129-8BTZb3Vcrj7KKgj/H2UITw
I wonder how much money Morgan Stanley gave to the Daley campaign fund, which serves as his 401(k) fund. And how much fell into the TIF black hole.
Why didn’t Daley just jack up the parking rates himself? Good question, and here’s my pet theory: By selling the meters and let a bank (read: black hole for money) jack up the rates Daley can say with a straight face he didn’t raise taxes but shrug it off as Morgan Stanley raising a fee. What’s hilarious is parking ticket money input rolled off a cliff.
Banks are to money what black holes are to matter.
Congratulations Chicago you’ve made the list again in the latest Tribune toast to your incredible monetary appetite. Red Light Ticketing Cameras they whistle while they work. Before you get across the intersection, your indefensible ticket is in the mail. What a surprise, the RLTC actually increase collisions, what a farcical safety pretense. At least parking meters can’t rear-end you, at least no yet.
Oh Yeah
Here are the sites and a charts
http://www.chicagotribune.com/news/chi-red-light-cameras-22-nov22,0,2590486.story
http://www.chicagotribune.com/news/local/chi-091122-redlight-map,0,1513125.htmlpage
Here’s a challenge I just put on the Tribune’s blog site on cameras,
If Mayor Daley was truly concerned about red light traffic safety as he claims, he would add one second to the yellow light time at each intersection. In fact, on behalf of the National Motorists Association I’ll extend the NMAs offer of ten thousand dollars to the him if extending the yellow light proposition is fairly evaluated by a mutually chosen traffic engineering company and found to be ineffective. Based on the current Tribune series he may well should take on the challenge….
The offer is on the NMA web site motorists.org
barnet847 (11/21/2009, 5:18 PM )
I think every one needs to step away from the crack pipe. It’s not like “their making $60 million per year”. When you open a business and take out a mortgage on a building do you not deduct your mortgage payment from your net proceeds? What’s the debt service like on 1.2 Billion Dollars?
What everyone is also overlooking is a very important factor called risk. The City divested itself of all risk and cost associated with operating the parking meter system. For example, if gas prices shoot upward of $5, a very likely scenario given the 75 year term of the concession, driving will undoubtedly decrease. What impact will that have on the meter system? What will happen with $10 or $15 a gallon gas prices? Add risk mitigation to the savings in escalating future operating costs for equipment, maintenance, labor agreements, pensions, etc. and the City in my opinion made a smart choice.
Let’s assume that the City could have done exactly the same thing as the private operator. They could have netted an additional 600 Million over and above the 1.2 Billion it received up front. Over 75 years that’s a theoretical 8 Million dollars per year that the City “gave up”. How does that stack up when one considers the risk? What is the value placed on betting that there will always be passenger cars in sufficient quantities to generate that kind of return for the next 75 years?
Better yet, let’s pretend the meter deal never happenned and the City has massive layoffs and raise taxes to cover the half billion shortfall. How happy and cheerful would we be then?
Very good analysis, riddle me this, cars get smaller, city provides more on-street parking by offering half-size spaces to accomodate more eco-friendly vehicles that are half the size of today’s vehicles. To take it a step further dimensionably, when vehicle levitation kicks in we’ll be able to stack vehicles vertically and get four times the vehicles in the same time space continuum. Who ever will be collecting the parking revenue then will make proportionally more I submit. Let’s just hope by that time the city machine breaks down due to lack of maintenace.
Or the city raises the parking rates same as CPM, LLC/LAZ for a couple three years and takes the necessary time to evaluate, receive public input and debate the merits and value of a deal with a much shorter time frame and one which allows the city to actually manage parking, not just revenue.
And Peter: How many rabbits do you think the city has to pull out of its hat since it’s projecting to spend, what?, two-thirds of the proceeds of a 75 year deal in just 3 years?
SS
Monday morning quarterbacking as it may be…
“Or the city raises the parking rates same as CPM, LLC/LAZ for a couple three years and takes the necessary time to evaluate, receive public input and debate the merits and value of a deal with a much shorter time frame…”
You mean the same “city” that did not raise meter price of twenty-five cents per hour for over twenty years? That city? Think about what would have happened if they penned in forty million for new pay boxes into the budget. What are the odds that would have made it all the way through the process?
You’re argument is way too rational.
That’s not to say that I don’t agree with you, because I do. It should have been an option in lieu of the lease. However, I would have added the provision that if the alternative plan were not approved and funded then the lease option moves forward. That would have added some teeth to the proposal and stiffened some backbones.
Peter:
“You’re argument is way too rational.”
I get that a lot :->.
It appears we’re on the same (or at least a similar) page. I was offering an alternative pretend scenario.
Peter Parker, you bring up a good issue with risk. Morgan Stanley could end up ripped off after all when you consider Peak Oil. Peak Oil means that oil will be less plentiful and it sure don’t take much of a supply shortfall to make fuel prices spike. Just fire up Google and type in “peak oil” and grep away.
As time goes by, cars will be smaller and more aircraft-like. The “Smart Car” is an example of automotive evolution. The Messerschmitt KR200 of the 1950s is a better example – and things like it could return. Note that the Me KR200 was invented by Fritz Fend, the same bloke who invented the world’s first fighter jet. I bet Burt Rutan can design a good-mileage car, being how he’s an aircraft designer.
But nonetheless, cars need fuel. What could screw Morgan Stanley is the de-proliferation of cars (of any design) due to extreme gas prices. At $10/gallon, public transit starts looking good even for short commuting missions. In my case, were it not for how the Pace bus system makes the CTA look good, I’d use transit instead of drive.
Everyone-
Again, I am continually impressed by the high level of debate in the Comments. I have lots of admiration for smart people, especially for people more intelligent than myself.
However, even though I think we got too little for the deal, you could debate this valuation issue for the life of the lease and never reach consensus.
However (and this is the thing that bothered me the most on this deal) one cannot deny that the time given the city council and the public to weigh in on this deal before it was voted on was MUCH too short.
Even if we assume $1.16 billion is a great deal for the city. 48-72 hours to look over, debate and discuss and a deal of this magnitude is wayyyyy too short of time. I mean, did even a single person outside of the city council actually get to weigh in on this? I don’t think so!
Friends, democracy took it in the ass on this deal. In this regard, there’s no doubt.