Chicago City Mayor Rahm Emanuel is attempting to make up for what he describes as the mistakes of a previous administration by renegotiating its 75 year deal with the private company now responsible for running the city’s parking meters.
In 2008, the Chicago Parking Meters group paid $1.15 billion for the lease to monetize about 36,000 street parking spaces. It is the third-biggest street meter system in the U.S. and the largest to be privately administered.
The agreement was endorsed by the then Chicago alderman to the tune of 40 votes to 5 in just two days, with the money received said to be used by the council to address a budget deficit.
According to the Chicago Tribune the deal “stands as one of the dumbest and most despised decisions in the council’s history.” It is believed that the city greatly underestimated the real value of the meters as a stable revenue source for city coffers.
To make matters worse, the private company was last month seeking an additional $49 million from the city as compensation for lost revenue caused by street closures. This amount was the result of a two year audit undertaken by the company itself, and has been questioned at all levels. The current Mayor subsequently refused to pay, forcing both parties back to the negotiating table.
Under terms agreed to this week, the Mayor has obtained control over the processing of data to determine whether the city owes or is owed money from future adjustments to available street parking. This arrangement is hoped to save tax payers $1B over the remaining lifetime of the lease.
In further negotiations the city agreed to extend metered parking by one hour in most areas of the city and until midnight in other areas. In return, the private company will allow free Sunday parking in neighbourhoods outside the city’s core.
Terms of the revised agreement and legal settlement were put before Chicago’s city council on May 8, who now have 30 days to review it.