Did you know that every time you pay for street parking at a meter in Chicago, the revenue doesn’t go to the city but instead goes directly to a private company?
This ongoing diversion of funds is the result of a controversial financial agreement made more than a decade ago.
This all started in 2008 when Chicago, facing severe financial challenges, leased all of the city’s parking meters to a private consortium under then-Mayor Richard M. Daley. As part of the agreement, the private company paid the city just over $1 billion upfront. In return, the company secured the rights to collect all parking meter revenue throughout the city for the next 75 years.
Chicago’s controversial $1 billion parking meter lease
The deal turned out to be quite favorable for the private investors, as they have already recouped their initial billion-dollar investment. Now, with the lease extending until 2083, the ongoing revenue generated from Chicago’s parking meters constitutes pure profit for the company.
Many people cite this lease as a financial disaster and one of the worst municipal deals in American history. If the city had retained control of the meters, the daily influx of parking fees could have been redirected back into city operations.
While city officials have considered the option of buying back the parking meter system, the current valuation of the remaining years on the lease results in a purchase price that is too high for the city to afford.
