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Report says Chicago bungled parking deal

With the slumping economy, Chicago privatized the city's parking meters in a $1.2 billion, 75-year deal. With the slumping economy, Chicago privatized the city's parking meters in a $1.2 billion, 75-year deal. (Associated Press)
Bloomberg / June 4, 2009
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Chicago leased its parking meters to private investors for $974 million less than they're worth, says an inspector's general report, which called the transaction aimed at closing the city's budget deficit "hasty" and "secretive."

The city should have given elected officials more time to review the arrangement, gotten an independent assessment, and held public hearings before awarding the lease, said a statement by Chicago Inspector General David Hoffman.

"The short-term budget problems and the large upfront payment the city would receive overshadowed all other legitimate, long-term, public-interest issues," Hoffman said in his report.

Chicago got $1.2 billion from investors led by Morgan Stanley under the 75-year lease of 36,000 parking meters, approved in December. The city planned to use some of the money to address deficits in the 2008 and 2009 budgets.

Mayor Richard M. Daley has advocated leasing city assets to improve its finances.

"People are taking a much closer look at the risks involved," Richard Norment, executive director the National Council for Public-Private Partnerships in Arlington, Va., said in an interview. "There's a much closer scrutiny from financial houses than before."

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