Can you imagine the day where a city decides to give its parking meters to an outside for-profit company? Well one U.S. city did that, and not only are the motorists there paying huge increases in parking rates, but the city itself will likely end up paying the entire amount that was given to them for the meters back to the company now operating and profiting off them.
That's right- more corruption in the Windy City, and you can be sure that as governments sell off their assets this could happen more and more! The Windy City already sold a toll-road bridge to a private entity and guess what happened to the toll rate? It jumped. It's now nearly double what it was just years ago.
So imagine this- Chicago sold its parking meters back in 2008 to a private for-profit company for $1.16 billion dollars for ownership of all the city meters for 75-years. Now the city is paying the company $14 million just this year in lost revenue because of street closings, festivals, construction, and other work. The number the city has paid out has increased every year, and it's not likely to drop with Chicago spending billions on its aging infrastructure, resulting in road closures, and lost meter money.
So even if the $14 million meter loss that Chicago is paying to Chicago Parking Meters LLC this year stays the same until the end of the contract in 2083, the city will have given back over a billion of the 1.16 billion it received for the meters. The crazy thing? Chicago Parking Meters LLC still gets to profit off the other meters that are used until 2083, making not only getting their $1.16 billion back that they gave the city, but profiting billions off the meters.
The Expired Meter says "When the Chicago parking meter lease deal was being jammed through the Chicago City Council in just over 36 hours in December, 2008 The Expired Meter warned how bad the deal was.
Certain provisions within the nearly one inch thick parking meter lease contract leaped out at people who actually read the document–provisions that could and would spell trouble down the road.
Alderman Scott Waguespack (32nd) knew about this stuff too. As one of the few (if not only), city council members who actually read the lease agreement and took the time to understand it, he foresaw what would happen.
“This is right on par with what we knew would happen,” said Waguespack initially in an interview this past Friday. “Any alderman (who voted for the meter lease deal) that still says they didn’t know that this was going to happen is ignoring reality.”
But when pressed, even Ald. Waguespack admits the meter lease deal is worse than even he predicted.
“Yes,” he simply said when asked if the deal has exceeded even his expectations of failure." In other words, Chicago will end up repaying CPM the entire $1.16 billion and more it got for signing away the city’s meters for 75 years–a net loss for the city.
And perhaps, least surprisingly,
Chicago Parking Meters, LLC just raised rates. Again.
Do you think it's right for government to sell assets for one time payments?