Mike, “The Parking Meter Geek,” who maintains http://theexpiredmeter.com website interviews Jay about how Chicago taxpayers lost billions of dollars of parking meter revenue.
Mayor Daley Did Not Lease the Parking Meters; He Sold Them
The length and terms of Chicago’s parking meter contract clearly indicate the Chicago parking meter agreement was a “sale,” not a lease. Mayor Daley calling Chicago Parking Meter’s 75 year parking contract a “lease” is another of his attempts to deceive the public. Since the law prohibits the sale of Chicago’s parking meters because they’re on the city’s right of way, Daley turned to his doublespeak and described the parking meter agreement as a “lease.”
A 99 year “real estate lease” is intended to last the entire length of a person’s life since so few people live longer than 99 years. Other common long term leases are 50, 80, and 175 years. The 75 year parking meter deal means the parking meter contract will cover two or more generations of Chicago Parking Meters employees. Given the length of Chicago’s 75 year parking meter lease, there will be one or more generations of Chicago drivers who will only be able to park at meters operated by Chicago Parking Meters. Because Chicago’s parking meter lease obligated more than a generation of drivers to specific parking fees stipulated in the original agreement, Mayor Daley essentially sold our parking meters to Chicago Parking Meters.
Chicago Parking Meters’ long term lease established the company’s “property ownership” of Chicago parking meters for 75 years, but the word “lease” in the Chicago parking meter agreement gives a false impression that Chicago still retains the rights to the city’s parking meters. Companies with long term leases typically do what they want with the properties they are leasing. Chicago parking meters are public property, and the law requires Mayor Daley and the city council to regulate the parking meters that are on the city’s right of way. Chicago Parking Meters agreed to its parking meter contract once the city met all of the company’s upfront demands. Because the original parking meter contract terms mostly favors Chicago Parking Meters, the parking meter agreement implies Chicago’s parking meters were sold, not leased.
Individuals and companies sign long term leases because rules or laws prevent them from buying the property they are seeking. For example, Jay’s friend wanted to purchase a condo’s owner garage. However, the condo association’s rules did not allow condo owners to sell their garages. Instead of buying the garage, Jay’s friend leased the garage for 99 years. As with Jay’s friend leasing a garage for 99 years, the 75 year parking meter lease circumvents the law that was supposed to stop the city from selling its right of way to Chicago Parking Meters. Mayor Daley and Chicago Parking Meters deliberately worded their parking meter agreement to hide the fact that the right of way was sold. Using the word “lease” in the contract doesn’t negate the fact that the city sold its right of way to Chicago Parking Meters.
Taxation Without Representation
The law that prohibits the sale of the city’s right of way is to protect citizens’ rights. A lawsuit is currently challenging the legality of the Chicago parking lease. Mayor Daley did not give citizens or their representatives adequate notice before the city council approved the lease. Furthermore, Mayor Daley did not allow citizens or their representatives to have input prior to the finalization of the parking meter agreement. It was impossible for aldermen to scrutinize the complex financial deal in the two days given to them by Mayor Daley. Since it took many months for the Daley administration to negotiate the parking meter agreement, Mayor Daley owed the city council members more time to review the complex details of the parking meter lease. The manner in which Mayor Daley forced the Chicago Parking Meters lease upon the city council and the automatic parking fee increases amount to “taxation without representation.”
First, Mayor Daley independently negotiated the Chicago parking meter lease without any advice or input from the city council. Next Mayor Daley’s ultimatum to the city council forced the aldermen to approve the parking meter lease. The manner in which Mayor Daley negotiated the parking meter lease and coerced the city council to approve it prevented Chicago citizens from being properly represented in the parking meter lease. It’s one thing for Mayor Daley to use poor business practices to arrive at the terms of the parking meter lease, but what’s worse about the parking meter deal is Mayor Daley consummated the deal in “bad faith.” If the court chooses to protect the rights of Chicago citizens who were excluded from having a voice in the negotiation of the parking meters lease, and who did not receive proper representation, the court will clearly rule in favor of the plaintiffs and void Chicago’s 75 year parking meter lease.
Stupid is as Stupid Does
A Chicago 2016 Olympics was Mayor Daley’s hidden motive to ram the parking meter deal through the city council. Recall that in December, 2008 Chicago was still in hot pursuit of becoming the 2016 Olympic host city. There were questions about Chicago’s financial ability to host the games. “Could private enterprise raise enough money to sponsor a Chicago Olympics,” and “Was the city council willing to put up $500 million to bring the games to Chicago” were two financial questions looming when the Mayor Daley compelled the city council to approve the parking meter lease. Mayor Daley needed the $1.15 billion from Chicago Parking Meters in reserve to prove Chicago had the financial wherewithal to host an Olympics.
Remember all the problems when Chicago Parking Meters started its lease. Pay boxes weren’t working and people received tickets in places where there were no signs or it was legal to park. The opponents to a Chicago Olympics made sure the Olympic Site Selection Committee knew about the Chicago parking meter fiasco. Because of the public’s furor over the parking meter lease, instead of the parking meter deal shoring up Chicago’s Olympic bid, the parking meter lease was the Chicago Olympic bid’s undoing.
In a “Bloomberg News” article, Gene Saffold, Chicago’s chief financial officer, said, “While profit estimates in the (Chicago Parking Meters) bond-offering documents were “fairly optimistic,” they were also “relatively in line with our projections when we valued the system’s current value of between $700 million and $1.1 billion.” Saffold’s comment is an attempt to make the public believe that Chicago Parking Meters is earning the amount of money the city estimated. Jay says, “Don’t believe Saffold.” If the deal is good as Saffold says it is, why is the city stonewalling the release of the financial estimates Saffold quotes in the Bloomberg News article? The release of the city parking meter revenue projection that Saffold quoted would refute Alderman Scott Waguespack and Inspector General Joseph Ferguson’s claims that the city undervalued the parking meter lease by $1 to $5 billion.
One way or the other we are going to find out how stupid Mayor Daley and his financial team are. If Saffold releases the city’s estimates he quoted to the Bloomberg News and it shows taxpayers were shortchanged by a billion dollars or more, then we know Daley’s financial team is as dumb and arrogant as we assume they are. If Saffold releases his estimates, and they are as good as he claims, they we know Daley’s financial team is stupid for not clearing up the parking meter deal misconceptions sooner. As Forest Gumps says, “Stupid is as stupid does.”