Why Does Abu Dhabi Own All of Chicago's Parking Meters?

[phantom power]

The city of Chicago has 36,000 parking meters. In 2008, it sold them on a 75 year lease for over one billion dollars. The buyers were led by Morgan Stanley. But as Matt Taibbi reports in his forthcoming book Griftopia, previewed in Rolling Stone, the state-owned investment arm of Abu Dhabi ended up owning a large share -- possibility a controlling majority -- in Chicago's parking meter system.

...

But while the City of Chicago was deliberating on whether to sell their parking meter system to Morgan Stanley--which they ultimately decided to do--the Wall Street megabank was making plans to offload the parking meters to a third party.

...

Within two months of selling its parking meters to a coalition of U.S. and Western investors led by Morgan Stanley, Chicago's parking meters came under new, foreign ownership.

...


Taibbi calls this a "bait and switch" pulled by Morgan Stanley on Chicago. He explains why this is about more than just parking meters. Now if city officials want to do anything that might disrupt parking meter revenue -- let's say close down parking for a street festival or parade -- they need to get the approval of those meters' shadowy, foreign owners. They also need approval to change parking hours or fees. The new ownership has already made unwelcome changes, ending the previous policy of allowing free parking on holidays. But not only did Chicago cede the operation of an entire segment of the city to mysterious private investors -- Taibbi says they could have gotten four times as much money for it, up to $5 billion.

http://www.theatlanticwire.com/features/view/feature/Why-Does-Abu-Dhabi-Own-All-of-Chicagos-Parking-Meters-2337

[SoCalDem]

1. Corporate hot-potato...n.t.

[gateley]

2. This makes me sick to my stomach. We've sold our country

to make a fucking buck. Does America own ANYTHING any more?

Wasn't Bush about to sell our fucking PORTS to Dubai or something like that?

This is heartbreaking.

[Barack_America]

5. Who gets the parking ticket money?

I'd not put another dime in those machines if I lived there.

[ieoeja]

14. I have not.

Before this I paid the meter figuring it was not worth the gamble and the city needs the money. Obviously, "the city needs the money" is no longer a factor to consider. And they raised the rates making it less of a gamble that I lose in the long run.

But, mostly, I would just rather pay a $50 ticket to my city than $2 to Morgan Stanley or whomever.

I am kinda disappointed that Daley decided to retire. There was actually a chance of him being unseated over this. The Alderman who voted for it claim they were misled by the mayor's office. Of course, this particular council has not one time in 22 years voted against anything wanted by the mayor. If you are going to let someone lead you anywhere they want, it makes it pretty easy for them to mis-lead you.

They'll keep their Aldermanic seats. But this is currently an albatross for those seeking higher office.

[Statistical]

30. The ticket goes to the same place the parking fees go to.

You pay either way. You didn't think they were stupid enough to pay $1B just for the parking fees without the parking fines half. I mean think about that. The city could simply stop enforcement and nobody ever pays anything ever again = $1B loss for new owners.

No they sold everything. The entire parking system. So you pay the fee they collect. You skip the meter and get a fine they collect.

Very shortsighted. The $1B is now long gone and that entire revenue stream is diverted for a lifetime (75 years).

[northzax]

37. this is correct

the city no longer has any enforcement obligations for parking meters, this is now done by Chicago Parking Meters, LLC.

[pscot]

35. You could be hauled up before the World Court

at the Hague and be charge with NAFTA violations in addition to your parking fines. You would have been better off invading Iraq, you international scofflaw, you.

[Taverner]

29. The world is up for grabs if you can pay for it

We're already in Libertarian Pixie land...yay

[gateley]

39. Yeah. Yay. nt

[Barack_America]

3. Sickening. We've become a nation of whores.

As loath as I am to use that word, it's exactly what we are. And we've been given little choice in the matter.

[Hannah Bell]

4. capitalism, bay-bee.

question is, why would anyone feed those meters knowing where the money goes?

[Hassin Bin Sober]

27. Cause the city still writes the citations and boots your car if you have two outstanding.

What choice do I have?

The city changed to 7 days a week parking fees. So now, of course, the enforcement people are crawling the streets 7 days a week. It's not like the old days where you could "run in" to a store on Sunday knowing the enforcement was non-existent. The creepers will get you at eight o'clock on a Sunday night.

[Statistical]

31. The fine goes the same place. You pay either way. n/t

[Hannah Bell]

43. i hear chicago has public transit.

[Statistical]

45. True (unless they sell that too).

Just pointing out the entire operation has been sold.

Not paying the meter and risking a ticket likely (depending on how good enforcement is) could result in more being paid.

The crappiest part is the city still acts as a collection agency (likely getting a portion of revenue) and will do things like place hold on tax returns, suspend license, prevent registration of vehicle until this corporate profit is paid.

Daley is a friggin idiot.

[Cleita]

6. I thought there were once laws about this kind of thing.

We need to get those laws back.

[AngryAmish]

7. Well something had to be done about the pensions

There is a large cohort of baby boomers that are set to retire from the City of Chicago next few years. It has already started. Police, Fire, etc. These pensions had not been paid for. The parking meters (and selling the Skyway - a toll road) enabled a lot of that pension debt to be wiped away.

Oh, and we spend the other part if the fund fro thsi sale - a rainy day fund - over the next year because the economy is in such shit.

Truth be told, I kinda like the new meters. Fewer people park downtown, and my business rarely keeps me in the Loop more than two hours. So $8.50 is cheaper than $25 for a parking garage.

[Hassin Bin Sober]

32. The only thing I like is one doesn't have to have a supply of quarters to park.

Since the machines take a debit card they are much more convenient.

I do find myself over-paying so I don't have to hassle with inserting the card, printing the receipt and walking back to the car to place the new receipt. Updating the ticket is much more of a pain than tossing another quarter in the slot if your haircut runs longer than expected. I assume the bean counters figured this in their model when they fleeced the city.

[kysrsoze]

44. What do we sell next? And it was sold for 1/5 of what it was worth. That's inexcusable

Now you can no longer park overnight for free in the Loop. Is it really OK for the city to get 20 cents on the dollar, and for our fees to be more than tripled in most locations? What are you going to say when they continue to raise the rates and the city no longer has any control over it all?

[Canuckistanian]

8. Wow, sweet deal

All that the Abu Dhabi company has to do is wait for the revenue stream to come in. And Chicago police will do the parking enforcement FOR them.

[phantom power]

9. At least until we start selling our police departments.

[Wounded Bear]

12. Nice shirt....

I've often used the Robocop reference as what the future looks like if the privatization trend continues. Looks like the filmmakers might have been a couple of hundred miles off, though.

;)

[Hassin Bin Sober]

33. Daley is already doing that.

[damntexdem]

10. Because Abu Dhabi has such a cool-sounding name?

Because Lovely Rita Meter Maid lives there?

[Tatiana]

11. They've raised rates THREE times since the meters became privatized.

This is an outrage and Daley should be ASHAMED of himself for trying to make a quick buck off this privatization scheme.

I wonder if there is any way we can get out of the contract that Daley signed.

[WinkyDink]

18. They can quintuple the rates, and whatayagonnadoaboutit? Vote out DUBAI?

[ieoeja]

19. Dart, for one, said he'd look into it if elected mayor.

If the lease doesn't have an out, fuck 'me. Whoever heard of a lease that couldn't be broken Refund the balance (+ interest).

Ignoring the cost factor -- Daley apparently already spent half the fucking money -- a substantial foreign investment means the US State Department will probably get involved on behalf of those foreign investors. Diplomacy pretty much requires it. Odds are the federal courts will stop anything we try unless we make it very, very lucrative (like refund them the 4x market value rather than the much less lease cost).

[Statistical]

36. It likely does have an out (just my wild ass guess) but most of time billion dollar deals have ...

contingencies.

The problem is like you said Chicago spent half of it. Where is Chicago going to magic up the spent $500B plus contingency fee plus any interest.

I mean if Chicago has $600 - $700B (one again a wild ass guess) to "make whole" and get out of the lease they wouldn't have needed the lease to begin with.

I doubt Chicago credit rating lets them float a bond that large so it would require a signifiant tax hike to raise the money over a short period of time to "get out" of the deal.

[Guy Whitey Corngood]

22. Not only that, the rates in 2 years are going to be out the ass!!! nt

[butterfly77]

13. Because Bush/cheney inc,,

sold them roads,bridges,toll booths all over the country and the Saudis have whole blocks with armed guards..

They own this country in soooo many ways and that is why Pres Obama has to untangle so much bullshit in so many areas to overturn certain laws and many know it.

That is why he looks at all of the loopholes in many of the things he is trying to overturn with no help from some of the SO CALLED DEMOCRATS..

Republicons come on DU everyday and sow doubt in the angry and uninformed. Now everything is being revealed or repeated for the people who never paid attention due to being busy,in whatever was going on in their lives during the bush years.

The CONS know that all they have to do is throw some lies out there and they will jump because they didn't know what they have been doing for years..

Not this issues necessarily because there is much,much more with wars,oil spill,the whole economy in general..

[Zax2me]

15. Looks like the city council has some explaining to do eom

[WinkyDink]

16. Wiat until kids here go to Dubai Charter Schools.

[Guy Whitey Corngood]

17. That's our boy Daley. nt

[Angry Dragon]

20. Where is Cool Hand Luck when we need him??

[Catshrink]

21. It's a sheik-down!

[pampango]

23. So Chicago took $1 Billion for revenue from its parking meters and now FOREIGNERS (maybe) control it

Color me not scared. If Chicago could have gotten more than $1 Billion for this revenue stream and didn't do it, do we blame the "shadowy foreigners" for this or the "good ol' American" Morgan Stanley or "good ol' Chicago politicians"? If "good ol' American Morgan Stanley paid Chicago $1 Billion and then sold it to someone else for more, maybe they took the FOREIGNERS for a ride.

[Romulox]

26. Right--control of our government by corporations is the problem, not those corporations' place of

incorporation.

Perhaps we agree on something, though I suspect you tend to support the increase in corporate power over governments (the natural consequence of laissez-faire economics, after all.)

[Romulox]

24. Sorry--why is it that I'm supposed to care about the nationality of the corporations that own us?

Let's be clear: I am 100% against the kind of privatization described in the OP, but... I don't think Morgan Stanley is an more an acceptable owner of a municipal function than a Saudi prince. It's almost as if we are meant to get outraged that the ruling class is being outsourced.

To that I say, gimmeabreak!

[phantom power]

28. I agree that the big blunder is privatization period...

however, the "foreign" aspect may introduce additional national security risks.

You know, double your stupid, double the fun.

:shrug:

[Statistical]

34. +1.

City got a billion either way. If they were thst worried about ebil foreigners they should have specified limits in the contract on re-sale.

Sad thing is one billion has to be a tiny fraction of what 74 years worth of parking fee (plus effects of inflation) is worth.

Essentially selling $5B to $6B in revenue for $1B now.

Kinda like a pensioner selling $1M in lifetime revenue for $200K now.

[Tatiana]

38. It's like an advance on a tax refund you know is coming.

Like the ones advertised by the tax preparing companies. Why not try to make due and receive the full benefit, rather than settling for immediate gratification and less than the full amount of money you would have received?

Our meters should not be run by a private company.

[Hassin Bin Sober]

41. I thought I read somewhere the revenue will be close to 11 billion.

Poor Daley says the mean old tax payers wouldn't let him raise the parking fees so he AD to sell the concession to the private sector. That is, in part, true. There was a discussion here a while back about the "anti-government" mentality in this country that will sit still while a private firm rapes the shit out of us .... but screams bloody murder when the municipality tries to raise fees.

[Statistical]

42. Ouch $11B for $1B. The city got slammed worse than I thought.

Think of all those future services the $11B could have bought.

[Starry Messenger]

25. I thought Milton Friedman only taught in Chicago.

Sounds like his principles filtered down to the civic management.

[and-justice-for-all]

40. Some US highways are leased by the US from foreign countires too.

http://www.usatoday.com/news/nation/2006-07-15-u.s.-highways_x.htm