Chicago Parking Meters Are Making UAE The Big Bucks

A new audit has found that the city of Chicago is losing millions of dollars each year on its 75-year lease of its parking meters — all while the meters owners, Chicago Parking Meters LLC (CPM), are raking in hundreds of millions. 

Conducted by accounting giant KPMG and first reported by the Chicago Sun-Times, the audit found that the city has “handed over $78.8 million in ‘true-up’ payments, as they are called” in the 12 full years that CPM has owned the meters.

It also found that CPM has now recouped its entire $1.16 billion investment in the deal, with $502.5 million to spare, and they still have 61 years of ownership rights remaining. All while the city’s citizens are struggling with the costly parking fees that have gone from $3 an hour in 2008 to $6.50 in 2013, and now $7 an hour.

The audit’s findings have renewed calls for the city to renegotiate the parking meter lease. The lease was signed in 2008 by then-Mayor Richard M. Daley. The lease gave CPM, a private consortium of investors, the right to operate the city’s parking meters for 75 years. A large stake in CPM was sold to the Abu Dhabi Investment Authority shortly after

The lease has been controversial from the start. Critics have argued that the lease is too long and that it gives the private company too much control over the city’s parking system. 

“They took the quick cash, ignoring the fact that they were saddling the city with terribly structured, undervalued deals that will cost the city for decades to come,” Clint Krislov, director of IIT Chicago-Kent’s Center for Open Government Law Clinic, told the Sun-Times on Thursday.

“The city should have just hired a parking operator to update the technology and operate the system for the city. If they had done that and gotten a better price for all three assets, Chicago today would have between 3 and 4 billion dollars more than it has from these three deals together.”

The city, meanwhile, has defended the lease, arguing that it has brought in much-needed revenue for the city. The city has also argued that the lease has helped to improve the city’s parking system.

The audit’s findings are likely to add to the pressure on the city to renegotiate the parking meter lease. It remains to be seen whether the city will be willing to do so. 

In April, a unanimous decision by a three-judge panel of the Chicago-based 7th US Circuit of Appeals upheld the dismissal of a lawsuit from Chicago drivers who alleged the costly parking meter rates were derived from a 75-year, $1.1 billion contract with a private company in violation of US antitrust law.

Information for this story was found via the Chicago Sun-Times, Reuters, the Atlantic, Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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