Sacramento city officials and the folks promoting a downtown arena for the Kings think leasing out the city’s parking facilities to a private operator for 50 years is a swell idea. Why, it’s so swell they don’t even have to ask the public to vote on it. They’ll just sign the lease, get $200 million they can plunk into an arena and worry about funding police and fire services later on.
They really ought to look at what is happening in Chicago, where the “75-year parking meter disaster,” as the governor of Illinois refers to it, has sent parking rates skyrocketing and given the city a steady stream of financial shocks.
Metered parking in the Loop, the city’s premier business and entertainment district, has jumped 66 percent since 2009. By 2013, it will have jumped 115 percent, when it will cost $6.50 an hour to use a metered space.
Neighborhood parking — which cost as little as 25 cents an hour as recently as 2008 — increased to $1.50 an hour from $1.25 this year, while downtown parking outside of the Loop increased to $3 an hour from $2.50, according to Chicago media reports.
While that’s painful enough for city residents, taxpayers are getting smacked with surprise bills from Chicago Parking Meters LLC, the lease operator, thanks to fine print in the 521-page contract that city officials apparently overlooked when they signed the $1.15 billion agreement less than three years ago. The contract allows the company to collect all revenue from the city’s 36,000 metered spots for 75 years. Here are two recent examples:
■ CPM is demanding $13.5 million in compensation for motorists’ use of disability placards and license plates to park for free, the Chicago Sun-Times reported this week. Newly elected Mayor Rahm Emanuel is fighting the charge, saying, “I don’t write blank checks to companies that say that’s what we owe. I’m gonna be the taxpayer watchdog.”
CPM invoked a formula outlined in the complicated lease that allows it to charge the city when revenue estimated lost to disabled parking goes over a certain amount. This provision could cost Chicago tens of millions of dollars over the next 75 years. The soaring parking rates have also generated a scandal in misuse of disability placards, the Sun-Times revealed, which could force the city to end free parking for disabled residents.
■ The company has sent City Hall a bill for $2.2 million to cover the cost of revenue estimated lost from street closures, CBS Chicago reported Monday. Last year, the city was billed $1.6 million for closures. Officials fear that the city will get an endless stream of bills whenever streets are closed for anything from nonprofit festivals to emergency repairs.
Adding to Chicago’s pain is the growing perception that the city got the short end of the stick when it negotiated the deal to plug a budget deficit under then Mayor Richard Daley. The $1.15 billion the city received from CPM was $974 million less than the lease was worth, Chicago Inspector General David Hoffman calculated in 2009, according to another CBS Chicago story. At this time, the city has only about 10 percent of the $1.15 billion left in its reserve fund.
In its haste to devise an arena funding plan, the city of Sacramento wants to rush into a parking concession deal that would give away a steady revenue stream for the next 50 years in return for money to invest in an economically questionable arena. As Chicago is learning, city residents will get whacked every which way for decades to come.