Illinois

Chicago Parking Meter Investors Make $ 13 Million Despite Pandemic

Chicago parking meter revenue should return to pre-pandemic levels. Some should then recover as the city regains its vibrancy and hundreds of new meters are installed on Montrose Harbor and the busy neighborhood streets in connection with Mayor Lori Lightfoot’s 2021 budget.

But even before its comeback, the retail investor who leased the Chicago parking meter managed to survive the darkest days of the pandemic, making a profit of $ 13 million.

According to a new audit, Chicago’s parking meter system generated $ 91.6 million in revenue in 2020, even though many Chicago residents were working remotely with their cars near their homes. This is only a 33% decrease from the previous year’s $ 138 million.

Chicago Parking Meters LLC has a 75-year lease term of 62 years and has already recovered a full investment of $ 1.16 billion and an additional $ 500 million.

In addition, there are four city-owned underground parking lots, down from $ 34.8 million in 2019 to $ 16.2 million. View of those assets.

One penny of these revenues also eased the burden on Chicago taxpayers, who were forced to raise their property tax by $ 94 million in 2021, and were subsequently forced to raise their annual tax in line with the CPI. ..

This is because former mayor Richard M. Daily has unloaded all three assets. Daily used the money to avoid property tax hikes while the city’s employee pension fund was sunk deeper into the hole.

Vehicles parked in the first block of East Superior Street on the Gold Coast.
Tyler La Ribieru / Sun Times

Trading date until 2008

Of the three deals, the 2008 parking meter deal was the biggest political nightmare for the two mayors who inherited it and the Chicago city council who approved it with lightning.

In 2008 it was $ 3 per hour, but in 2013 it was $ 6.50. These meters are currently $ 7 per hour.

Initially, car drivers were very upset about the price increase, destroying the meter and boycotting it, leading to a dramatic reduction in street parking. Income has recovered to a pandemic.

KPMG’s latest financial report further demonstrates how great the deal was for retail investors far from Abu Dhabi.

Chicago Parking Meters LLC lost one-third of its annual revenue last year, but the system has generated enough money to distribute $ 13 million to investors. Total revenue was much higher than the $ 23.8 million meter payments in 2008 before CPM took over the system.

During the pandemic, the company’s operating costs fell from $ 7.3 million to $ 4.7 million. Investors were also able to recover an additional $ 6.8 million through the terms of the contract requiring the city to refund investors for all out-of-service spaces.

This is the number of times the city closed the streets during the pandemic to allow the restaurant to serve customers outdoors after the restaurant stopped servicing customers indoors during the pandemic. This is because the service of the meter has been stopped.

Still, as in 2012, when Mayor Rahm Emanuel added nearly $ 27 million to meter company revenue before fine-tuning the details in 2013, it’s more than the previous “adjustment payment”. There are few.

Attorney Clint Chrislov
Rich Hein / Sun Times

$ 2.1 billion to date

Taking into account the newly reported 2020 figures, private investors have already withdrawn $ 2.1 billion from their transactions through three refinancings. The latest refinancing ($ 1.2 billion) was completed in 2019.

As expected, if parking revenues return to $ 100 million a year, the company will make nearly six times the amount invested by investors.

The latest audit results were provided to the Chicago Sun-Times by lawyer Clint Chrislov. As director of the IIT Chicago-Kent Open Government Law Clinic Center, Chrislov has reviewed dozens of transactions and analyzed the results annually.

“People looking for quick cash usually have a bad deal — and a bad deal for all three,” Chrislov said on Friday.

“The sale of these assets has already cost the city $ 5 billion and robs the city of two to three times that in the process of trading. What the city needs and has itself. The cash that was made. That’s the most annoying part. The city could have hired the same people to do this for them and could have funded the improvements themselves. “

Skyway transactions worsen, according to lawyers

Parking meter leasing is a deal that city councilors and their voters dislike, but Chrislov argued that it was “comparable” to Skyway’s deal.

Ten years after investors gave the city more than $ 1.83 billion to lease the Skyway for 99 years, the right to operate a privatized highway and increasing tolls in pockets are at their original price. Sold to a consortium of three Canadian pension schemes, which is $ 1 billion more than.

“This was a $ 1 billion profit in the decade the city would have made,” said Chrislov.

“They make 23% of their initial investment annually, and there are 85 years left.”

Chrislov sought to acquire a meter and garage deal that was declared illegal because the city could not legally sell public roads.

He also said that garage trading restricted the development of loops and the city spent $ 62 million to compensate Millennium Park and Grant Park garage owners to allow Aqua Building, 225 N. Columbus. He claimed to have imposed a huge fine. Dr. opens a competing garage.

Both proceedings were abandoned after the Emmanuel administration defended the deal.

Just before taking office, Lori Lightfoot, who was elected mayor at the time, decided to review the parking meter arrangements and find a way to break the lease, shorten it, or ease the strict conditions of taxpayers. I swore.

She called it “keep rubbing and rubbing” “burrs under the saddle”, but her administration hasn’t done anything to get rid of it.

Parked at 800 blocks on North Clark Street on Friday, June 4, 2021.

Parked on Friday at 800 blocks on North Clark Street.
Tyler La Ribieru / Sun Times

Chicago Parking Meter Investors Make $ 13 Million Despite Pandemic

Source link Chicago Parking Meter Investors Make $ 13 Million Despite Pandemic

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