City of Chicago adds longterm concessions for city parking to Midway Airport, Skyway
The City of Chicago will reveive an upfront fee of $1,157m for a 75 year concession with a Morgan Stanley (MS) subsidiary for the rights to profits from 36,000 street parking meters. Higher parking fees will be phased in over 5 years. After that fee increases will be subject to City approval.
The concessionaire is commited to a capital program to upgrade the parking meters so that they all have a cashless payment option by 2011. This will modernize the system much sooner than the City by itself was able to, according to a statement from the Mayor's office.
Under the concession, the City retains the right to revise rates charged, to add or subtract the number of meters and make other changes to the operations. But all changes are subject to the proviso that to the extent revenue is adversely affected the concessionaire is compensated - "made whole" in contract jargon.
The City proposes to use the concession fee for:
- $400m for a longterm fianncial reserve similar to $500m from the Skyway
- $325m for midterm budget relief 2009 through 2012
- $100m "human infrastructure fund" helping the City's needy
- $324m for "budget stabilization" to bridge the economy through the economic recession
"No others have done this..."
Mayor Richard Daley said no other government had managed to do what he called "major and groundbreaking" agreements like the Skyway, the Midway Airport and the parking:
"During the toughest economy our nation has faced in over fifty years, it is more important than ever that we manage our budget in ways that are both responsible and creative. The funds from this historic parking meter agreement will strengthen our city’s finances for the long term, give us the ability to continue investing in people’s needs and most importantly, protect our city and taxpayers from a worsening economy."
Of course Chicago could have joined the mendicants seeking bailouts in the Washington DC breadline with the likes of California, Citicorp, New York, General Motors, Freddiemac, Chrysler, Pakistan, AIG and hundreds of others.
The full City Council will consider the parking concession Dec 4.
Unlike Indiana, Pennsylvania and Texas longterm concessions have not been controversial in Chicago.
Daley is a Democrat.
The concession will be held by Chicago Parking Meters LLC, 76% Morgan Atanley Infrastructure Partners A Sub LP, 23% Morgan Stanley Infrastructure Partners LP, 1% several others.
LAZ Parking will be the concessionaire's operator.
The City received $1,830m for the Skyway concession from a Cintra/Macquarie partnering.