Chicago Parking Meter Privatization Creates Controversy

Published August 1, 2009

A parking meter fiasco has enraged Chicago citizens, shoppers, and business owners, and their fury has raised the hackles of the city’s aldermen.

In a raucous city council meeting in June, council members who have long been accused of being little more than rubber stamps for Mayor Richard M. Daley approved a measure to require they have at least 15 days to vote on privatization deals of city assets worth $100 million or more.

The ordinance followed hard on the heels of a report by the city’s inspector general criticizing the mayor’s office and city council for approving the $1.15 billion, 75-year parking meter lease just two days after Daley’s office briefed the council on the particulars and without aldermen seeing the contract.

The report said the city could have netted more than $2.13 billion in revenue from the meters if Chicago had kept them.

Prices Soar, Meters Break

The lease, approved in December, allowed parking prices at the 36,000 meters to skyrocket. But most infuriating to motorists is that thousands of meters have not worked properly or at all. Many have been so stuffed with quarters they have broken or have made it impossible for persons to buy more time.

These and other problems have resulted in thousands of parking tickets, which in turn have led to hundreds of meters being vandalized with spray paint, Super Glue, hammers, concrete blocks, fire, and more.

“People keep on saying this is why privatization is bad. Well, no, this is why it’s bad when it’s done badly,” said the Parking Ticket Geek, a Chicagoan who declines to reveal his identity because the city’s parking situation has inspired him to start a Web site,, that tracks Chicago’s parking problems and skewers Daley and other officials for them.

“It’s bad when you have 72 hours to discuss and vote on it. It’s bad when you undervalue the asset. Seventy-five years is too long. Why not 10 years and then reevaluate it?” the Parking Ticket Geek said. “When you quadruple the cost to park, and people aren’t getting out of cars because they are afraid to get tickets, that’s got to be hurting businesses. Then you have to put the city’s 10.25 percent sales tax on top of that. And the morons are surprised when their tax revenues fall.”

High-Powered Lawyers Involved

Chicago Alderman Leslie Hairston (D-5th Ward) in May alleged the companies have been defrauding thousands of motorists by knowingly using meters that are mismarked or are running fast, cheating parkers out of time they have paid for.

Illinois Attorney General Lisa Madigan (D) then issued subpoenas to Morgan Stanley, Chicago Parking Meters, and LAZ Parking.

A week later, Morgan Stanley Infrastructure and Chicago Parking Meters LLC, the main investors, hired former Illinois governor Jim Thompson and attorneys in the Winston & Strawn law firm he runs. LAZ Parking, hired to operate the meters, retained the equally politically connected law firm of Mayer Brown Rowe & Maw, whose staff includes two former Daley chiefs of staff and once included Bill Daley, the mayor’s brother and former U.S. commerce secretary.

Daley dismissed criticisms of the parking meter deal from aldermen, the public, and the city’s inspector general.

“Like anything else, you can issue any type of report,” Daley told reporters after the inspector general’s report questioning the deal appeared in early June. “I can criticize anything.” He added, “This is a good financial deal.”

Steve Stanek ([email protected]) is a research fellow at The Heartland Institute and managing editor of Budget & Tax News.

For more information …

Report of the Chicago parking meter lease by Inspector General David Hoffman: