Bloomberg To Sell Off NYC Parking Meters - 75 Years Of Revenue For A One-Time Cash payment

[HiPointDem]

Matt Taibbi:

Readers of my last book, Griftopia, might recall a chapter about the city of Chicago leasing 75 years of its parking meter revenue to a coterie of private investors, some of them from the Middle East. The end result was and is a political obscenity: Native Chicagoans are now completely at the mercy of private interests when it comes to parking rates, collections, even holidays. When elected officials in Illinois can’t shut off the parking meters on Abe Lincoln’s birthday because a bunch of sheiks in Dubai don’t want the revenue stream turned off even for a day, you know something has gone seriously sideways in the national body politic.

Well, Chicago isn’t alone anymore. Hizzoner Michael Bloomberg in New York has decided to do his own version of the Chicago infrastructure bake sale; the city announced that it is putting up nearly 90,000 parking meters for lease. They’re expecting to get over $11 billion in upfront money from the deal, which is great news if you’re Mike Bloomberg, who gets to use that money to patch current budget holes instead of making tough cuts or raising taxes. The news is less awesome for the next half-dozen New York City mayors, or for the citizens of New York, who now will get to spend most of the 21st century grappling with its increasingly monstrous deficits with a major tributary from the city’s revenue stream shut off.

A New York parking meter deal, like the Chicago deal, would be a perfect example of the deeply cynical short-term thinking of many American politicians these days. These deals involve a sitting executive selling off a valuable piece of city property at a steep discount to private financial interests (often, to friends or campaign contributors), in order to solve a current cash flow problem that, surprise, surprise, will still be there the year after you finish spending the proceeds of your sale.

The fiscal genius that is Mike Bloomberg - selling New York City out to his Wall Street cronies. I'm sure it's just coincidence that the sell off happens to plug up a budget hole in his last year in office.

http://perdidostreetschool.blogspot.com/2012/06/bloomberg-to-sell-off-nyc-parking.html


Maybe we should just sell the whole country & let someone else run it. That would take care of those pesky budget problems.

[PoliticAverse]

1. The Chicago deal was especially bad. n/t

[Hassin Bin Sober]

14. Very bad for us. Great for the investors. Great for Daley.

Daley got himself a no-show job with the lawyer's firm that negotiated the deal. So he's all set.

In Da Mayor's defense he DID have a point about the anti-tax hysteria that would cause an up-roar if the CITY tried to raise revenues so drastically (versus a private corp. raising fees so drastically). But then again, he was planning on jamming something something very un-popular down out throats on his way out the door. Why didn't he push though an unpopular meter increase? Oh yeah, that wouldn't get him a no-show job now would it?

Chicago parking meter company wants more money; mayor balks


Here’s a look at parking-meter revenues in Chicago before and after the deal that privatized Chicago’s parking meters.

◆ City parking-meter revenues in 2008, the last full year before Chicago Parking Meters LLC paid $1.15 billion to take over the meter system for the next 75 years: $23.8 million

◆ Meter collections kept by Chicago Parking Meters LLC since then:

2009: $45.6 million

2010: $71.2 million

2011: $82.8 million

◆ Additional money the meter company has been paid to cover parking spaces temporarily taken out of service:

2009: $6,829

2010: $2.2 million

◆ Additional money the company is demanding — which City Hall is disputing:

2010: $13.5 million*

2011 (through September): $14 million

*2010 total is for free parking provided to drivers with disabled-parking placards or license plates. The 2011 total could rise depending on bills for reimbursement yet to be submitted.

Source: Chicago Parking Meters LLC financial statements, Sun-Times research

http://www.suntimes.com/news/watchdogs/12299030-452/chicago-parking-meter-company-wants-more-money-mayor-balks.html

The private investors who run Chicago’s parking meters are doing better than expected, and now they’re demanding an additional $14 million they say they’re owed under obscure provisions of the wildly unpopular 2008 deal that privatized metered parking and caused rates to soar, records show.

Disputing the claim, City Hall says Chicago Parking Meters LLC is seeking a “windfall to which it is not entitled.”

The $14 million bill stems from parking revenues the meter company says it lost when the city took meters out of service last year because of street repairs, festivals and other city-sponsored activities, according to documents obtained by the Chicago Sun-Times.

Daley Lands Job With Parking Meter Lawyers


Former Mayor Richard Daley has landed a job with the firm that helped negotiate Chicago's parking meter deal.

Daley will be "of counsel" to Katten Muchin Rosenman LLP, the law firm announced Wednesday morning. The former mayor "will draw on his vast knowledge, experience and relationships globally to contribute to the continued growth of the firm."

The firm says Daley will not participate in work involving Chicago or affiliate city agencies.

“I appreciate all of the professional offers I have received since announcing my plan to leave government,” said Daley in a statement. "[The firm] has a demonstrated commitment to giving back to the community, which is important to me.”




Source: http://www.nbcchicago.com/blogs/ward-room/Daley-Lands-Job-With-Parking-Meter-Lawyers-122931698.html#ixzz1xDMxlr25

[HiPointDem]

17. they really stuck it to the city with those additional fees, didn't they? i also read that

the company had installed meters in residential neighborhoods as well, so that now you have to feed the meter to park in front of your own house.

is that true?

[Hassin Bin Sober]

18. I haven't seen it. Maybe more downtown.

It may be that people downtown used to park free overnight or sundays. Now it's 24/7 in some areas. And it's EXPENSIVE. I had lunch downtown a couple sundays ago and I think paid $7 bucks to park on the street. You're welcome, Dubai Sovereign Wealth Fund!

They ARE exercising their right to hire their own meter readers - to scare up enforcement where they feel a heavier hand will draw water to their own mill.

[HiPointDem]

19. "They ARE exercising their right to hire their own meter readers" ? they = abu dhabi? i don't

quite understand your comment.

thanks for the info about residential parking,btw. maybe what i read was hyperbole.

[Hassin Bin Sober]

23. Yes. Chicago Parking Meters LLC is a management company owned by the investors:

But two months after the deal, in February 2009, the ownership structure completely changed. According to Scales in the mayor's press office:

In this case, after the Morgan Stanley investor group's $1.15 billion bid was accepted and approved by the City in December 2008, Morgan Stanley sought new investors to provide additional capital and reduce their investment exposure — again, not an unusual move.
So, while a group of several Morgan Stanley infrastructure funds owned 100% of Chicago Parking Meters, LLC in December 2008, by February 2009, they had located a minority investor — Deeside Investments, Inc. — to accept 49.9% ownership. Tannadice Investments, a subsidiary of the government-owned Abu Dhabi Investment Authority, owns a 49.9% interest in Deeside.


So basically Morgan Stanley found a bunch of investors, including themselves, to put up over a billion dollars in December 2008; a big chunk of those investors then bailed out to make way in February 2009 for this Deeside Investments, which was 49.9 percent owned by Abu Dhabi and 50.1 percent owned by a company called Redoma SARL, about which nothing was known except that it had an address in Luxembourg



Read more: http://www.rollingstone.com/politics/news/exclusive-excerpt-america-on-sale-from-matt-taibbis-griftopia-20101018#ixzz1xqIXfVcb

[HiPointDem]

24. so basically it's the ruling family in abu dhabi getting 1/4 the revenues, & a bunch of rich morgan

stanley investors getting half, and the shadowy "redoma sarl" getting 1/4?

re "redoma SARL":

A Société à responsabilité limitée, also known by the acronym SARL is a private limited liability corporate entity that exists in France, Switzerland, Luxembourg, Monaco, Macau, Algeria, Morocco, Tunisia and Lebanon and has commerce as its purpose.

A SARL is a company whose liability is limited to the contributions of its members. Shares are not freely transferable; transfers require the agreement of half the shareholders if the beneficiary is a third party... If the beneficiary is a partner, a spouse, an ascendant or a descendant, the transfers are free. A SARL is broadly equivalent to a private company limited by shares ("Pvt.Ltd.&quot in the United Kingdom, and a Limited liability partnership in the United States.

http://en.wikipedia.org/wiki/Soci%C3%A9t%C3%A9_%C3%A0_responsabilit%C3%A9_limit%C3%A9e

all the parking meter proceeds go to the 1%?

[alcibiades_mystery]

22. I haven't seen a meter box off a major (commercial) street anywhere on the North Side

I think the claims of meter boxes going up in residential neighborhoods is false.

[mopinko]

31. no. city still says where they should go.

[jehop61]

27. Thank you

This story has been buried in the Chicago press. Shout out New Yorkers, don't let it happen there.

[bluestateguy]

2. Would booting out the UN generate any new revenue for the city?

They are sitting on some pretty pricey real real estate that I think the city could profit from handsomely. And the diplomats never pay their parking tickets anyway. I've always thought the UN should be in Geneva anyway.

[jmowreader]

8. I can think of a couple addresses that would DEFINITELY generate tax revenue...

that is, if Bloomberg has enough balls to tax them. Pun not intended.

The first one is 1 East 161st Street, Bronx, N.Y. On it is a structure commonly known as "Yankee Stadium."

The other is 126th St. & Roosevelt Ave., Flushing, N.Y. On this parcel is a structure commonly known as "Citi Field."

With the economy the way it is, providing two private businesses an exemption from property tax is no longer affordable. Especially since all they do is provide entertainment seven months out of the year.

[hrmjustin]

3. How typical of him to do this. he never thinks. n/t

[BeyondGeography]

4. So fucking lame

You'd think the Chicago nightmare, which cedes control of the streets to private pirates, would be enough to short- circuit this, but no...

[AnotherMcIntosh]

5. So Bloomberg is going to follow Richie Daley's lead to sell offf and privatize the parking meters.

Then how many other mayors will think to themselves, "Well if they can do it, why can't I?"

Along with promoting "free-trade" agreements, this is one way to dismantle a country.

[HiPointDem]

7. most definitely.

[RedCappedBandit]

6. bloomberg pls go

[waddirum]

9. same thing as a drug addict selling the VCR and microwave

for a quick cash fix

[snappyturtle]

10. Well, Daley and Bloomberg aren't alone in selling off

public assets. IN sold their toll road....and it operated in the black!

[HiPointDem]

11. i think some people are getting some nice kick-backs....just saying.

[Hassin Bin Sober]

13. Mayor Daley retired and got a job working for the attorney firm....

.... that negotiated the deal. Ain't that special.

[snappyturtle]

29. For sure! nt

[spike91nz]

12. al services withprivitization creep

This seems to be part of the general effort to privatize the public space as a way of keeping protest contained and making access only available to those with the cash. I wonder if this is the same group that manages the private prisons? It appears to be so in several locations around the globe and, if so, is an offshoot from the old RCA corporation, now dedicated to running the governmental services without having all that nasty social oversight that public services are open to. Have had some problems with some of these private services providing incentive for booting people who let the meter run too long and then charging them extortion rates for return of the use of the vehicle.

[HiPointDem]

20. thanks for the information about rca -- i looked it up & was surprised to find they run private

prisons -- globally, no less.

[MindMover]

15. I do not believe that politicians have the right to sell off

the public's property....these contracts will be fought and won in court in the near future.....

[Egalitarian Thug]

36. Well it's been going on for decades and nothing yet.

Cities in California for instance, have given dozens of parking lots (super-profitable cash cows) and former government buildings, built with taxpayer money of course, to private companies "to eliminate operating and maintenance costs" since the 80's.

[JackRiddler]

16. Think what he can get by selling the city's tax revenue straight up.

How about the DMV? The streets? The sidewalks?!

Then again, I'm an optimist. I think there's a good chance that in 75 years or less cars will have been rendered obsolete in cities.

[alcibiades_mystery]

21. If our Daley lesson is accurate, it may be the only way to get rid of Bloomberg

[Festivito]

25. I will gladly pay you Tuesday for my hamburger today. AT WHAT %???

A 75 year bond,...
with collateral,
with rights to control land,
with right to control prices,
and other rights?

GOES FOR WHAT RATE?

What percent return is that for the banker. I don't know how much per hour NY charges, nor hours of operation. I'm seeing 6-9% for a collateralized bond/loan.

Ridiculous.

It's like a bond issue, only, it has collateral.

And, for 75 years! Rest assured there will be "collateral damage."

[me b zola]

26. Wait, so to park on a public street you will need to pay a private company?

[AzDar]

28. Ugh.

[obamanut2012]

30. Chicago is really regretting this

Dumb idea.

[mopinko]

32. ok, fact check on chicago.

although i have beefs with the deal, emanuel is pushing back on some of them so we will see.
BUT- we did not "lease the meters". we let this company replace our antiquated coin only meters, whose intake was physically capped, with modern kiosks that take credit cards and give you a receipt to put on your dashboard. you can also move your car to any spot in the large zone once you pay. i, for one, am EXTREMELY GRATEFUL for this leap into the 21st century.
now most of the revenue is paperless transactions, and theft, once rampant, is very difficult.
there was no way in hell that the city had the money to invest in this upgrade. i do not know what was spent, but i am sure it was a huge amount of money. they had to put what is basically a wireless atm on nearly every block of arterial street in the city.
and chicago was not the first. i believe there have been smaller cities. i was in philly a couple years ago and believe they have the same deal. could be wrong about this.

chicago long ago privatized most of their parking assets. staffing them with honest people who would not go home with their pockets stuffed with quarters was a pain in the ass.

i am very grateful that i don't have to drive around with an ash tray full of change any more. and there are more places to park as people are no longer required to park between the lines at the meter.

none of that makes a good story, i know.

[ieoeja]

33. You are the first fellow Chicagoan I have ever heard praise these.

Until this very moment, 100% of the people I knew in this city are furious with this deal. Many even believe Daley would have lost had he chosen to re-run because the people of this city are absolutely livid over this shit.

Nice to hear there is one person in the city who was actually represented by this action.


On edit: the city was putting up those new kiosks before the lease. Are you even certain that the leassor finished the installation? Or did the city do so on the city's dime as part of the deal?

[mopinko]

34. from the inspector general's report

The lease agreement requires that the concessionaire make improvements to the parking- meter system. Specifically, the lease agreement requires that any space “with a Metered Parking Fee of at least $1.50 per hour must have a payment option at the point of sale other than the cash payment.”37 The Concessionaire must “provide such payment option ... no later than 180 days after the first Day that the Metered Parking Fee for such Metered Parking Space is at least $1.50 per hour.”38 The City projected that the cost of this upgrade was $50 million over the first two years of the lease.39

[Hassin Bin Sober]

40. Christ! What does that even mean?

Oh that's right. You are just regurgitating/cutting-and-pasting talking points from the "inspector general's" report. So it really doesn't have to mean anything.


Oh please Mr. Big Bad city, please don't make me place a credit card machine on evey corner so I can extract money from citizens' bank accounts. Please don't make me cut down on paid labor and deposit money directly to our accounts!!

LOL. If businesses do ANYTHING efficiently it is collect their fees.

[mopinko]

35. i think it has been grossly misrepresented.

as are most things chicago. lot of black and white things and talking about what happens around here.
i am fond of the color grey.

[Hassin Bin Sober]

38. Well she supports red light traffic cameras and speed cameras. Calls it an asshole tax.

I call it a regressive tax but who is counting.

Her "fact check" is full of bullshit and shoddy "opinions."

"emanuel is pushing back on some of them so we will see" - yes we'll see a bunch of bluster but the facts don't lie. We owe every time a meter is closed. It's in the contract. There may be some slight wiggle room in the numbers but it will land close to $27 million for the last two years. More for this year. And the next 75 years.


Yes. The credit/card debit card is VERY convenient. Convenient at sucking money out of your bank account. OF COURSE they would prefer using cards. Now they don't have to pay NEARLY as many people to service the machines. Sure it's nice to not have to carry quarters. Thank god. With the 500% (and counting) fee increase it would be impossible to stock your car with that many quarters.....

Now here is where it isn't so convenient. Once you purchase a ticket that money is gone. If you need to add money to the meter you have to buy another ticket. Great if you can time your re-ticketing at the same time your old ticket runs out. Not so great if you know your meeting/appointment/haircut will run longer than expected. No more running out to pop another quarter in the meter to extend your time. When the meters first were installed I found myself blowing a half hour or more on an old ticket so I could re-meter at my client/dentist/barber's convenience. Now I, and everybody I talk to, find ourselves "maxing out" even when you aren't sure you will need the time.

OK I lied. The boxes aren't really all that convenient. Want to pop in to the coffee shop? Walk to the meter (sometimes the closest is across a busy street) > Insert your card > Wait for card to scan > Select your time > wait for the machine to contact your bank (the longest piece of the process) > Print your ticket (second longest) > Walk back to your car and place the ticket on the dash. Kind of a pain in the ass (but admittedly better than not having a quarter handy).


there are more places to park as people are no longer required to park between the lines at the meter. BULLSHIT. On paper maybe. In reality, not so much. First of all, there wasn't THAT much wasted space in the defined spots. Second of all, people being lazy and inconsiderate now park further away from the person in front of them - leaving half or 3/4 spots wasted.


they had to put what is basically a wireless atm on nearly every block Yes sure. But it's not really an atm is it? It doesn't dispense money or take bank deposits. It's a credit card reader with wireless technology. That's a real fucking achievement.

[MADem]

39. Thank you for that amplifying bit of information. It does provide perspective.

It also makes the entire reasoning behind the effort understandable.

They have something like this in many towns and cities in MA--and they also have something rather similar to UK parking lots.

[Hassin Bin Sober]

41. Cut and pasted right out of the city's "report"

The reasoning behind the efforts was SOLELY to prop up Daley's budget. Oh and to have a billion dollars earning interest to pay for other programs - well the money is almost gone. Spent. Kaput.

Now figure in what we will have to pay for meter closures and the asset becomes a liability.

http://theexpiredmeter.com/2012/05/analysis-bad-gets-worse-when-it-comes-to-parking-meter-lease-deal/

But when pressed, even Ald. Waguespack admits the meter lease deal is worse than even he predicted.

“Yes,” he simply said when asked if the deal has exceeded even his expectations of failure.

City Will Give Back Entire $1.16 Billion By Lease End



With the Sun-Times report that Chicago Parking Meters, LLC has billed Chicago $14 million for contractually obligated revenue just for 2011, bad has skipped worse and jumped directly to financial nightmare.

Because if you do the calculations based on this figure, by the end of the 75 year lease term, Chicago looks to pay CPM more than the original $1.16 billion lump sum payment it received in 2008 for the rights to operate Chicago’s metered parking system.

In other words, over the length of the contract, CPM will get their entire initial investment of $1.16 billion back through givebacks while reaping many billions of dollars in profits from Chicago drivers who pay the highest meter rates in the entire nation.

It’s simple math really.

There is some good insight from one of the Alderman who actually read the contract before voting "no" (one of only 5 no votes).

[MADem]

37. He wants to drive cars off the streets--maybe he's hoping they'll overcharge.

Who polices this? I hope not the city. The "meter enforcers" who will ensure that people aren't overstaying their time need to be paid for by the private company...not the city.

[Hassin Bin Sober]

42. That's one of the kickers.

The LLC gets to hire enforcement if they feel the city isn't doing their job enforcing the meters. They already have enforcement people out on the streets. Not sure how they get paid but I would bet it's in the contract kick some ticket revenue back for their work..

[mopinko]

43. city enforces the meters, city gets the ticket money. forcing cars off the streets

is exactly what this is about. that is what parking meters are for. controlling how many people drive their cars to crowded places like downtown. to force people onto our rather good public transportation system.

and per hbs' comment above- feeding meters is illegal. if it is a 2 hour meter, after 2 hours, you are supposed to move along. technically, you are supposed to at least move your car. but it is supposed to be inconvenient, so you wont do it. so i guess it is working.

[Hassin Bin Sober]

45. Feeding meters over the posted limit is illegal.

Adding time to a meter within the time limit is not.

Maybe I wasn't clear. I said the new "market based" approach is forcing people to "max out" rather than buy only the time they need. Nowhere did I indicate meter feeding in excess of posted limits (limits that, for some re$on, are greatly increased).

Does this help?

[dgauss]

46. Maybe onerous parking fees will promote public transportation,

but to say that's what parking meters are for - "controlling how many people drive their cars to crowded places like downtown. to force people onto our rather good public transportation system" doesn't describe what's going on. Maybe when meters were publicly controlled that was part of the reason for having meters, along with raising public revenue, but once it's in the private sector the only driving force is private profit.