In 2008, Chicago made a financial move that still haunts the city. The city, under the leadership of then-Mayor Richard M. Daley, sold off the rights to its parking meter revenue for $1.15 billion, a deal that’s been widely criticized as one of the worst financial decisions in the city’s history. The sale of these rights to Chicago Parking Meters LLC, a group with investors from the UAE, has proven disastrous for taxpayers. In exchange for the immediate cash, Chicago locked itself into a 75-year agreement, meaning that all revenue from the city’s 36,000 parking meters will go straight to Dubai until 2083.
Currently, the city collects around $150 million a year in parking fees. Yet, instead of benefiting Chicago’s coffers, the money flows directly into the hands of private investors. This arrangement has only become more troubling over time, with Chicago residents footing the bill. Not only did the city undersell this valuable asset by a wide margin, with estimates suggesting the system could have been worth at least $2 billion, but they also agreed to clauses that require them to make payments to the consortium if parking spaces are unavailable due to construction or events. These stipulations have led to millions in extra costs for the city, further deepening its financial woes.
The deal was signed at the height of the Great Recession, with the aim of plugging budget gaps. The $1.15 billion may have seemed like a good short-term solution, but now, years later, the city’s finances are strained, and the payment continues to grow. Meanwhile, the consortium has already made back its investment and continues to rake in profits, while Chicagoans are stuck with the long-term consequences. The city’s future fiscal health is being undermined by a deal signed long ago, and it’s an issue that won’t be resolved anytime soon.
Sources:
https://news.wttw.com/2023/07/27/wttw-news-explains-what-happened-chicago-s-parking-meter-deal