Even during a pandemic, those infamous deals selling off city assets made private investors rich
Meanwhile, Chicagoans were hit with a $94 million property tax hike this year, with annual increases to come.
As Chicago’s economy felt the pain of the pandemic’s vise-like grip, one business — and it won’t surprise you — continued to make out like bandits:
The company behind the city’s notorious parking meter deal.
A new audit, according to Sun-Times City Hall Reporter Fran Spielman, shows that Chicago Parking Meters LLC took in $91.6 million in 2020.
But wait, there’s more. The Chicago Skyway toll bridge brought in $84.8 million for its private operators last year, Spielman reports. And four privatized city parking garages beneath Grant Park netted $16.2 million in 2020.
In all cases, that’s less revenue than the year before, but still a substantial return. And it’s all money that the city — which still owns these assets — will never see.
That the deals would prove lucrative enough to stand up against the ravages of a global pandemic, while the city has its hand out looking for revenue, is another bitter reminder that selling off city assets is usually just a terrible way to pay the bills.
“These sales of assets have already cost the city $5 billion to this point and will, over the course of the deals, deprive the city of two or three times that,” said attorney Clint Krislov, director of IIT Chicago-Kent’s Center for Open Government Law Clinic, who analyzes the three deals annually.
Money for nothing?
Chicago was in well-publicized financial distress when the administration of Mayor Richard M. Daley began selling off operational rights to some of the city’s biggest assets for instant upfront cash.
The 99-year Skyway lease in 2005 gave the city $1.83 billion all at once. The underground Grant Park garage deal in 2006 brought in $563 million. And the 75-year parking meter agreement in 2008 netted the city $1.16 billion.
But the city spent the cash nearly as quickly as it got it. And the private operators ratcheted up tolls and parking fees, so much so that Chicago Parking Meters LLC already has recouped the $1.16 billion it paid the city — and pulled in another $500 million as well ... and counting.
The investors who handed the city $1.83 billion to operate the Skyway sold those rights 11 years later to another company for $2.8 billion.
There was nothing back then, other than the need for political courage, to prevent the city from raising tolls and fees and continuing to operate the assets. Instead, it sold the rights for what amounted to pennies on the dollar, enriching investors until nearly the end of the century with money the city should rightfully have.
Though the $91.6 million pulled in by parking meter investors in 2020 represented a big drop from the $138 million they received in 2019, the company still turned a handsome $13 million profit. Even as the city spent months at a virtual standstill, with much of the population working from home.
Meanwhile, Chicagoans have been stuck with a $94 million property tax increase this year, with automatic yearly increases tied to inflation to come.
“People looking for fast cash usually get a bad deal — and they did get a bad deal on all three of these,” Krislov told the Sun-Times.
We certainly did.
No sale, please
If there is a bright spot, it’s that two past plans to sell the operations of Midway Airport fell through. The first was a $2.5 billion, 99-year plan to privatize the airport in 2009. And Mayor Rahm Emanuel — who made it a priority to find ongoing revenue streams to pay for ongoing expenses — nixed a $2 billion, 40-year deal in 2013.
Here’s hoping an improving economy and ever-tightening municipal purse strings don’t lead city officials to throw another ill-advised estate sale in the future.
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