In 2008, then-Mayor Richard M. Daley rushed a proposal through Chicago’s city council to lease out the city’s downtown parking meters for 75 years.
Councilmembers (and the public) were given only a few days to examine the deal’s details. Daley made the hard sell, promising a buyer with $1.15 billion to fill Chicago’s existing budget hole if the council acted quickly.
Only after the deal was done did the city learn that it leased the meters nearly $1 billion too cheaply while giving away rights to manage traffic and land use to investment giants Morgan Stanley, Abu Dhabi Investment Authority, and Allianz Capital Partners—for 75 years.
While the Chicago parking meter privatization deal has been long recognized as a failure, features of the deal are present in many public-private partnership (P3) contracts.
As cities wrestle with the idea of privatizing parking assets to generate immediate cash, it is important to understand the long-term impacts of these deals. This fact sheet details the risks and impacts of these privatization contracts, using the Chicago parking meters deal as a running case study to illustrate real-world consequences.