Turning public works — water, prisons, parking enforcement, the list goes on — over to private companies always turns out to be a boon for private companies while local taxpayers get shafted. Such is the ongoing disaster that is the privatization of Chicago’s parking meters.
David Cohen of In The Public Interest has been following this dumpster fire:
New numbers are out, and this past year Chicago lost another $136.2 million in potential revenue. That’s how much in parking fees went to the group of global investors who operate the meters.
As you recall, Chicago (like all cities) was struggling financially because of the Great Recession. Out of desperation, the city rushed to take a $1.15 billion offer from private investors—including some from as far away as Abu Dhabi—in exchange for control of 36,000 parking meters for 75 years.
Once the ink was dry, the deal’s finer details came into focus. The city’s inspector general concluded that the meters had been sold off $1 billion dollars under their value. And because the investors demanded a healthy return on their investment, parking rates shot up to some of the nation’s highest.
Since, the investors have made out like bandits. By 2019, they had made back their initial investment plus $500 million in profit on top.
Combined with two other privatization deals made around the same time—four parking garages and the Chicago Skyway bridge—the parking meters have sucked billions from Chicago’s budget.
“Chicago today would have between 3 and 4 billion dollars more than it has from these three deals together,” Clint Krislov, director of IIT Chicago-Kent’s Center for Open Government Law Clinic, told the Chicago Sun-Times.
As I told Paul Rosenberg for Salon earlier this year, it was an “incredibly stupid way” to borrow money on the city’s future revenues.
But what I really try to get across when I tell the story is the extra, extra, extra stupid (and anti-democratic) part.
Get this: The contract is written to make it harder (and much more expensive) for the city to introduce transit alternatives, like bus or bike lanes. The city essentially has to “buy back” parking spots to cover revenue that could have been generated over the life of the (75 year!) contract.
If anyone in your town, city or county even proposes so much as a “study” regarding privatizing any of your public works, start organizing early against it because these deals never benefit taxpayers in the long run, no matter how slick Wall Street is in lying about it.