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Chicago leased its metered parking spaces to a group of private investors. The 75-year deal has 65 years to go — though investors already have made back their money. | Michael Schmidt/Sun-Times

Lightfoot still hopes to alter much-maligned parking meter deal

Mayor-elect Lori Lightfoot vowed Wednesday to take a fresh look at the widely-despised parking meter deal and try and find some way to either break the 75-year lease, shorten it or sweeten the sour terms for Chicago taxpayers.

Lightfoot said it’s time to try again now that private investors have recouped their initial $1.16 billion investment — and still have 65 years to go on the 75-year lease.

“It’s like this burr under your saddle. And it keeps rubbing and rubbing … every time there’s reporting about the windfall of money that they’ve made at a time when we’re in such financial distress,” Lightfoot told the Sun-Times.

“My lawyer’s curiosity says I want to take a look at that deal and see if there’s something that we can do. … The fact that they’ve already made their money 10 or 15 years into it underscores that it was not a good deal for taxpayers. … Whether or not we’re gonna be able to do anything about it is an open question. But I feel an obligation to take a look at that and see if we can craft a better strategy for taxpayers.”

Chicago Parking Meters LLC spokesman Scott Burnham could not be reached for comment.

The most recent burr under the saddle is the latest annual audit of the deal Chicagoans love to hate.

It shows Chicago’s parking meter system took in another $132.7 million in 2018. That puts private investors on pace to reap a hefty return on their initial $1.16 billion investment with 65 years to go on the 75-year lease.

Attorney Clint Krislov tried to get the parking meter and parking garage deals declared illegal on grounds that the city can’t legally sell the public way.

He further claimed the garage deal both restricted development in the Loop and subjected the city to giant penalty payments, like the $62 million the city spent to compensate the owners of the Millennium Park and Grant Park garages for allowing the Aqua building, 225 N. Columbus, to open a competing garage.

Both lawsuits were thrown out after the Emanuel administration defended the deals.

Lightfoot was asked whether she would return to court with Krislov or simply approach Chicago Parking Meters — whose investors hail from as far away as Abu Dhabi — and implore them to give beleaguered Chicago taxpayers a break.

“The first way we have to start is have our lawyers take a look at the outlines of the deal and see where we have any kind of options. That’s where we start,” she said.

The city had been collecting only about $23.8 million in annual meter revenue in 2008, the last year before CPM took over the system. Factoring in the newly reported figure for 2018, the company has already extracted $1.2 billion in parking-meter revenues from the contract.

CPM’s net income after operating expenses last year was $89.3 million, documents show. That figure does not include debt payments or investment losses. The company distributed $49.5 million to its private investors last year.

Buried in the contract: Daley also agreed the city would reimburse investors for every parking space that became temporarily unavailable — whatever the reason.

In 2012, that compensation — called “true-up payments” — added nearly $27 million to the parking meter company’s bottom line.

Emanuel tweaked that fine print in 2013, leading to a big decrease in true-up payments; they cropped to $6.5 million in 2014, but surged by 38% in 2017 and remained relatively high last year, at $17.3 million, the audit shows.

Chief Financial Officer Carole Brown said Lightfoot is free to try again to make, as Emanuel put it, “lemonade out of a big lemon.” But she’s unlikely to get very far.

“It’s a contract. If she feels that there’s some value to it, you can always look and see if there’s a way to do something with that contract. But I don’t know off the top of my head how you could just not honor the contract,” Brown said.

Brown noted that parking spaces taken out of service are only one factor triggering the annual “true-up” payment.

“The original parking agreement said the city would increase parking rates by a formula every year. We haven’t increased parking rates since 2011. That’s the second thing that contributes to the true-up payments,” she said.

“What they bought was a certain number of parking meters for a certain period of time at a certain rate and the city chose not to increase those rates.”

Civic Federation President Laurence Msall was equally pessimistic about Lightfoot’s chances of sweetening the parking meter deal.

“You can always plead and ask for mercy and gratuitous gifts to the city. But, whether you have the legal ability to enforce it and whether they have an obligation to” renegotiate is another matter, Msall said.

“Previous legal advisers to the mayor and to the city have looked to see how you could re-open it and it doesn’t seem to be very fruitful.”

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