Apparently the City is getting a one-time payment of $1.16 billion (yahoo says $1.15 billion, but what’s $10 million among friends?). Hopefully this is entirely in cash and will be paid at the start of the “lease.” But what is being given up to one of Morgan Stanley’s financial devices for 75 years? It’s not really the parking meters, because no meter could last more than a decade or two. Is it the street space controlled by the meters? Can the City reduce this space in the future if needed for a driveway, bus stop, hydrant? What about spaces that currently lack meters but where they might be appropriate in the future?
While the Tribune says rates will quadruple, or more, by 2013, but what happens later? This deal apparently runs to 2084. Of course we can be sure it’s fair. The Tribune says
The mayor’s nephew, William Daley Jr., works for Morgan Stanley and lobbies state and Cook County officials on the firm’s behalf.
And according to Reuters
“I think it’s a fair price” for the parking meter system, said Dana Levenson, head of North American infrastructure banking for Royal Bank of Scotland, who helped negotiate the parking lot lease in his former position with the city.
The deal covers “more than 36,000 meters,” which seems to value each space at about $32,000. Of course that’s a citywide average, surely spaces in outlying districts aren’t worth as much as those in the loop.
One thing that I don’t doubt: Chicago street parking has been underpriced and raising the rates is a smart move for the City. HIgh Cost of Free Parking author Donald Shoup recommends…
Charge market rates for curb parking. He defines market rate as the parking price that will yield 85 percent occupancy
Clearly the City has been losing revenue for years, essentially subsidizing motorists while taxing retail purchasers, homeowners, renters, and the rest of us.