Privatization of Parking Meters

When, in March of 2003, Mayor Daley ordered Meigs Field bulldozed in the middle of the night, Chicagoans were outraged over his demonstration of authoritarian arrogance. But that unannounced action-one the mayor claimed was motivated by post-9/11 safety concerns although it actually opened up Chicago's air space-paled in its comparison to Daley's secretive leasing of the city's 36,000 parking meters in early December 2008.

Daley and his team worked for months on the nearly $1.2 billion deal with Chicago Parking Meters LLC, a division of Morgan Stanley, without disclosing who the bidders were, how much they were offering or even the names of the people the city retained to advise them. As investigative reporters for the Chicago Reader learned after filing Freedom of Information Act (FOIA) requests, the Mayor's December 2, 2008 press conference took place not only before City Council approved the measure, but also before rank and file aldermen had seen copies of the bid or the ordinance required to carry it out. 37

Daley was able to pressure aldermen to vote on his behalf because they had already approved the 2009 fiscal year budget, which included the $150 million windfall from the proposed deal.38 The scheming and pressure tactics again reveal what a Tribune editorial regarding the plowing of Meigs Field called Daley's aversion to "any of that messy give-and-take normally associated with democratic government." 39

But it wasn't just the secrecy of these dealings or the rubber stamping of City Council, which voted 40-5 to approve the 75-year deal, that incensed Chicagoans. Nor was it just the spike in meter costs or the flurry of parking tickets resulting from broken, overstuffed, and mislabeled meters and malfunctioning new pay stations. 40 In a city that prides itself on its competitive edge, citizens found themselves in angry disbelief over how badly Mayor Daley and his deal-making brain trust had failed to get a remotely good price: at minimum, the parking meters drew in half as much money as they were worth.

A June 2009 report by Former Chicago Inspector General David Hoffman criticized the city for relying on miscalculations and rushing into a "dubious financial deal." Conservative estimates in the report reveal that the meters were leased for $974 million less than they were worth, causing Hoffman to report that the City's short term budgetary need "overshadowed all other legitimate, long-term, public interest issues." 41 Alderman Scott Waguespack, one of the five council members who voted against the parking meter deal, presented a detailed analysis at the rushed approval session that showed the city was getting a fifth of what the meters were worth. He estimated their value at $4 billion over 75 years. 42

The privatization fiasco led Illinois Attorney General Lisa Madigan to send subpoenas to Morgan Stanley Infrastructure Partners, the maintenance arm of LAZ Parking, and Chicago Parking Meters LLC in order to reveal whether the "transaction and implementation" of the deal led consumers to be defrauded.43 Furthermore, as asset sales become a favored method of the City of Chicago for raising money - past deals include the $1.8 billion lease of the Chicago Skyway, the $563 million lease of four parking garages under Millennium Park and Grant Park, and the $2.5 billion lease of Midway Airport - City Council is scrambling to rewrite the rules of privatization. It has since approved an ordinance to mandate the online accessibility of previous and future documents concerning the leasing of public assets. 44

Aldermen Manny Flores, Pat Dowell, and Brendan Reilly proposed an ordinance in October 2009 calling for a 60-day review period before voting on a bid, charging an independent party with the responsibility of analyzing proposed lease agreements. The Inspector General would also review the lease, although the proposed Asset Lease Taxpayer Protection Ordinance has not yet passed City Council.45 With the election of a number of young, outspoken aldermen, it was hoped that Mayor Daley would find it more difficult to steamroll City Council. Some of his opponents predicted the parking meter controversy would cost him at the polls the way snow-plowing failures had cost Michael Bilandic. But even as aldermen expressed their displeasure and citizens boycotted parking meters46 or committed vandalism on them,47 Chicagoans were adjusting to this latest display of one-man rule.