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* The Daley legacy in a nutshell…
Chicago’s parking-meter system took in $121.7 million last year, while four underground city-owned garages reaped another $34.7 million — with not a penny of that money going to the cash-strapped city government.
Instead, the $156.3 million pot of parking cash went to private investors who control the meters and garages under deals cut by former Mayor Richard M. Daley and rubber-stamped by the City Council. […]
In the seven years since, the meter company has reported a total of $778.6 million in revenues. It’s on pace to make back what it paid the city by 2020, with more than 60 years of meter money still to come. […]
Two years before the meter deal, the city gave Chicago Loop Parking — another entity led by Morgan Stanley — the rights to four parking garages under Millennium Park and Grant Park for 99 years. In return, the city received $563 million.
Last year, the garages produced $34.7 million in revenue, the highest annual total since 2008, audits show. After expenses, their net operating income was $8.4 million. Over the nine years of the deal, the facilities have generated $292.6 million in revenue for their private operators.
And, of course, all the money from both deals was squandered to avoid a tax hike.
* Related…
* City reaches new pension deal with laborers: The bad news is that city taxpayers will have to chip in an additional $70 million or so to start, and some of that money will be diverted from a different pension fund covering other employees. Potentially worse, the deal will have to be approved by the legislature and signed into law by Gov. Bruce Rauner, who has balked at signing other pro-Chicago legislation until Mayor Rahm Emanuel convinces other Democrats to back the pro-business, union-weakening structural changes the governor wants.
posted by Rich Miller
Tuesday, May 24, 16 @ 10:50 am
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=And, of course, all the money from both deals was squandered to avoid a tax hike.=
This is the real tragedy here. We spent it all with nothing to show except an inflated idea of what our tax revenue buys.
Comment by Carhartt Representative Tuesday, May 24, 16 @ 10:53 am
To avoid a tax hike or a budget cut?
Comment by Rhino Slider Tuesday, May 24, 16 @ 10:54 am
One-time money from 99-year leases to fix a one-year operating budget hole.
If that’s not criminal, it should be.
Comment by wordslinger Tuesday, May 24, 16 @ 10:56 am
Those deals would be tossed befoe pensions for those who want Chicago to go bankrupt.
Comment by illinois manufacturer Tuesday, May 24, 16 @ 10:57 am
We studied this deal in my MPA’s economics class. The people in the Mayor’s Office didn’t properly account for inflation. Their inflation estimates were all based on Year 0, not for each previous year over the course of the 75 years. This is a perfect example of not approving something that hasn’t been made public ahead of time. The banks are going to make a ton of money on this deal.
And as Rich pointed out, far too much of the money was squandered with only small amounts going towards capital projects that will survive the 75 years.
What a frickin’ waste.
Comment by Just Me Tuesday, May 24, 16 @ 11:04 am
==some of that money will be diverted from a different pension fund covering other employees==
Resorting to cannibalism is always an act of desperation. Even if =all= you take is =a little= from another who can =spare it=.
Doing so could allow for survival, but it rarely ends well. This is bad.
Comment by Formerly Known As... Tuesday, May 24, 16 @ 11:18 am
And so everyone understands how long a 99 year lease is, 99 years ago the Cubs won the world series two years in a row!
Comment by NoGifts Tuesday, May 24, 16 @ 11:22 am
@Nogifts - the Cubs last won the World Series in 1908 (and 1907 prior). That was 108 years ago. The idea is sound, though.
Comment by Bogey Golfer Tuesday, May 24, 16 @ 11:39 am
This action was quasi-criminal. People who have tried to do something about have been stopped by Democrats.
The simple reality is neither party deserves to be just one of two.
Comment by jerry in chicago Tuesday, May 24, 16 @ 11:41 am
Sort of a Tier 3 pension.
Comment by DuPage Tuesday, May 24, 16 @ 11:41 am
Dont blame Daley he was reelected
By overwhelming numbers
Comment by Foster brooks Tuesday, May 24, 16 @ 11:44 am
Daley: the gift that keeps on giving.
Comment by Sir Reel Tuesday, May 24, 16 @ 12:11 pm
Boy those Chicago Democrats are wheeler-dealers! When will they learn?
Comment by BIG R. Ph. Tuesday, May 24, 16 @ 12:49 pm
Not that the following makes either of these sales a ‘good deal’ for the city, BUT:
Regarding the garages:
–original buyer gave them back to their lender a few years ago.
–the lenders spent $26.8m on running them last year
–8.4 million divided by 563m is only a 1.5% return–that’s *tiny*
Regarding the meters:
–again, the articles always ignore the operating costs.
–$121.7 m was gross receipts; they do have something like 20-25 million in annual operating costs.
–they did upgrade the meters from the old style, which wasn’t a small expense.
–city no longer has to employ coin collectors.
–city gets all ticket revenue, and meter owners do employ their own additional team of ticket writers.
Still, completely indefensible deals, and especially so when you know how the $$ was spent.
Comment by Chris Tuesday, May 24, 16 @ 1:10 pm
And this is the direction Rauner will take the entire state, if we allow it. And the Tribune is sure to be the cheerleader for all the privatization, just as they did with Daley.
Comment by Eugene Tuesday, May 24, 16 @ 1:24 pm
==Meanwhile, the Emanuel administration spent more than $62 million in 2015 to settle a lawsuit involving the garages. Under terms of the original agreement, the city wasn’t supposed to allow new competitors near them ==
How is this not a violation of anti-trust? The city can collude with industry to monopolize a specific geographic area?
Comment by TinyDancer(FKA Sue) Tuesday, May 24, 16 @ 1:39 pm
IIRC, didn’t Daley’s law firm get major work after he “retired” from the companies that got in on this deal? Can you say “quid pro quo”?
Of course, there couldn’t be anything corrupt about the way a Chicago machine Dem like Daley does business, right?
Comment by Illinois Bob Tuesday, May 24, 16 @ 3:44 pm
Gee, I wonder why Wall Street touts privatization and also why some folks keep falling for its false promise.
Comment by Truthteller Tuesday, May 24, 16 @ 3:58 pm
You know there’s a problem when RahmEmanuel.com redirects you to Donald Trump’s website
Comment by Anonymous Tuesday, May 24, 16 @ 4:24 pm
Tiny: Noerr-Pennington doctrine.
Comment by jack28 Tuesday, May 24, 16 @ 4:30 pm
jack28 - thanks
Doerr-Pennington needs to be re-litigated.
This could be a good test case.
What are the chances?
Comment by TinyDancer(FKA Sue) Tuesday, May 24, 16 @ 8:33 pm