Clout company gets $60M towing contract to maintain stranglehold

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People who have their cars towed would have more protections under an ordinance approved Wednesday by the Chicago City Council. | File photo

Mayor Rahm Emanuel’s administration has awarded a $60 million contract that will allow a clout-heavy company to maintain its 26-year stranglehold on Chicago’s lucrative towing business.

After collecting $47.5 million from the city since 2010, United Road Towing was the lone bidder for the new towing contract, the first to be awarded by Emanuel.

Two other companies — Honeywell Building Solutions and Chicago United Industries — showed up at a pre-bid conference, but failed to enter the towing sweepstakes, records show.

The Chicago Sun-Times reported in mid-February that contract negotiations were “in progress,” according to a bid-tracker feature on the Department of Procurement Services website that did not identify the winning bidder.

Now, those negotiations have been completed and the $60 million contract has been awarded to United Road Towing.

The contract calls for the company to handle towing, boot release and management of city impoundment facilities at 103rd and Doty and 701 N. Sacramento Ave.

United Road Towing has made $40,185 in campaign contributions to Chicago area politicians in recent years, records show. Chief beneficiaries include campaign funds controlled by Ald. Edward Burke (14th), chairman of the City Council’s Finance Committee ($7,000); Ald. Pat O’Connor (40th), Emanuel’s City Council floor leader ($5,300) and Ald. Mike Zalewski (23rd), chairman of the City Council’s Aviation Committee.

Rookie Ald. Brian Hopkins got $1,500 from United Road Towing. City Clerk Susanna Mendoza, the Democratic nominee for state comptroller, got ($1,000).

Shortly after taking office in 1989, then-Mayor Richard M. Daley turned towing over to Environmental Auto Removal, a newly formed company whose owners had close ties to former state Sen. Jeremiah Joyce (D-Chicago), one of Daley’s closest friends in politics.

The firm and its parent company, United Road Services, held onto the business, even after the contract was re-bid in 2003, when the company’s records were seized in an FBI raid believed to be tied to an interstate auto theft ring.

United Road Towing’s contract includes removing Denver boots from vehicles that had been disabled by the devices due to unpaid parking tickets or other reasons.

In 2010, yet another round of competition ended with the same result.

After changing its name to United Road Towing, the company was awarded a new, $31.5 million contract to manage and secure four Streets and Sanitation auto pounds, release Denver boots, tow abandoned vehicles within 24 hours of notification and tow illegally parked vehicles within 90 minutes of city requests.

At the time, Daley’s City Hall claimed that United was chosen because it had a “dedicated fleet of 97 pieces” of towing equipment and sufficient personnel to do the job. The only other bidder in that 2010 competition, Tegsco, lacked experience handling Chicago’s towing “volume,” failed to provide an adequate staffing plan and “relied on subcontractors to perform all towing services,” officials said.

Gerald Corcoran once served as president and CEO of United Road Towing. Corcoran is now identified as the company’s “contact” on the new contract. He could not be reached for comment.

The towing contract has been a constant source of controversy.

Martin McNally, a former president of Environmental Auto Removal, was an investor with Joyce in a company that held a no-bid concession contract at O’Hare Airport.

McNally also had a history of doing legal work for Nello Sabatini, the longtime former Streets and Sanitation deputy who oversaw city towing operations until 1998.

In 2004, the Chicago Sun-Times exposed the city sale of about 70,000 cars a year to the company for no more than the scrap-metal price, regardless of vehicle condition. Owners got nothing for their cars but still had to pay fines and towing fees.

The towing company auctioned off the cars and kept the proceeds. The city had to pay more than $100,000 to a dozen people whose cars were wrongly sold for scrap.

In February 2014, Emanuel chose to grant United Road Towing a two-year, $16.5 million extension instead of putting the towing contract out to bid.

The new contract requires the company to own or lease at least two heavy-duty wreckers and “no less than 50 tow trucks,” one for each of the city’s 50 wards.

United Road Services “must not exceed four hours from the time indicated on the tow report to remove boots, tow and impound eligible vehicles.” Failure to meet that service level results in a “credit due the city” of $100 per boot, the contract states.

Joyce is not believed to have any remaining ties to United Road Services – and it would be surprising if he did, considering the bad blood that exists between Joyce and Emanuel.

For much of the Daley administration, international terminal concessions were controlled by Chicago Aviation Partners, a partnership between Duty Free International and McDonalds that included Joyce as a part-owner and paid consultant.

The contract expired in 2003. It was extended on a month-to-month basis until Emanuel took office, as the city tried three times to open the lucrative business to competition – and lobbyists lined up on all sides.

Replacing Chicago Aviation Partners was the first big test of Emanuel’s City Council muscle.

By a vote of 45-3, aldermen approved the 20-year contract with Westfield Concession Management after a rare public appeal by Joyce.

Chicago Aviation Partners then filed a lawsuit contending that the award to Westfield was the product of a “sham evaluation process” and would deprive O’Hare of $120 million because the company was not the highest bidder. The city won the case.

Joyce’s son subsequently worked for vanquished mayoral challenger Jesus “Chuy” Garcia in the April 7, 2015 mayoral runoff against Emanuel.

With help from local Ald. Matt O’Shea, Emanuel still managed to get 59 percent of the 19,828 of the total votes cast in O’Shea’s 19th Ward.

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