This year I spent the holidays in Chicago where I once lived for two decades. When I left Chicago in 2000, parking meters cost $.25 an hour in the downtown area called the “Loop.” Up until 2009, the rate was the same. As of January 1, 2013, thanks to the privatization of Chicago parking meters, the rate has soared to $6.50 an hour, payable 8 AM to 9 PM, seven days a week, including holidays (I had to feed the meter on Christmas Day). In the Central Business District just outside the Loop, the rate is $4.00, and everywhere else in the city street parking is $2.00 an hour. Chicago downtown parking rates are now the highest in the nation. This is the last scheduled rate increase of the 2009 privatization deal, but additional “cost of living” increases will be applied going forward.
It used to be that you parked, got out of your car, and fed the meter with the loose change in your pocket. Now, 34,000 of Chicago’s 36,000 meters have been replaced by 4,700 “pay and display boxes.” It works like this: You park and walk to one of the complicated looking “pay boxes” who some in the city have dubbed “Martian toilets.” After walking half a block and possibly waiting in line while freezing your butt off, you feed the box with a huge pile of change or use your credit/debit card, (they don’t take dollar bills). You get a receipt, then you walk back to your car and place it inside on the dashboard. If you have a motorcycle or motor scooter, you write your license plate number on the receipt and adhere it to your headlight. Way more complicated than when I lived there, and shockingly more expensive.
Unhappy Chicagoans have taken to avoiding parking in the downtown areas, switching to public transportation, and of course, in true Chicago style, defacing and vandalizing the hated boxes. In 2010, 20 of the 200 pound boxes were stolen. Chicagoans were impressed.
Who owns Chicago’s parking meters?
In 2009, Mayor Richard M. Daley struck a deal, behind closed doors, with a consortium of investors headed up by Morgan Stanley to privatize the city’s parking meters. If you want to know all the sordid details, read Matt Taibbi’s 2010 book, Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History.
To make a long story short, Mayor Daley, having spent a year putting the parking meter deal together, introduced it as a fait accompli to the City Council on December 1, 2008, and asked for a rubber-stamp vote two days later. The final bid was $1,156,500,000 for a 75-year lease on the city’s parking meters to be paid in a lump sum. 75 years? The ever-fearful, clueless aldermen had no time to really examine the deal or determine who the investors were, yet they passed it 40–5.
Morgan Stanley and its investors formed a company called Chicago Parking Meter, LLC (CPM). The agreement stipulates that CPM receives all associated revenue from the parking meter system, with the exception of fines, until 2084. CPM subcontracted with LAZ Parking for the management and maintenance of all Chicago’s meters.
In February of 2009, in a classic bait-and-switch, the original investors stepped aside to make way for investors from Abu Dhabi. Taibbi estimates that Abu Dhabi investors are now at least 30 percent owners of Chicago’s parking meters. Another investor has an address in Luxembourg. The rest include various arms of Moran Stanley, JP Morgan Chase, the Teacher’s Retirement System of Texas and other insurers and pension funds.
Wall Street wins, Chicago loses
According to Bloomberg News, Chicago Parking Meters LLC (CPM), estimates that it will earn over $9.58 billion dollars from its parking meter deal with the city. CPM’s $9.58 billion revenue is more than eight times what CPM paid Chicago for the parking meter rights.
Another ridiculous provision of the deal is that if the city takes meters out of service for street repairs, festivals or other city-sponsored activities, the city owes CPM for loss of revenue. As of October 2012, the unpaid bill for out-of-service parking spots is $14.2 million. Aldermen used to have control over streets and parking in their districts, and would accommodate resident and small business needs. Not any more. Just one example of how privatization erodes democracy.
The total CPM is seeking from the city is nearly $50 million. The additional bill is for reimbursement for free parking the company provided to people displaying a disabled-parking placard or license plates—another part of the bad deal Daley made with Morgan Stanley and CPM.
Privatization and the undermining democracy
Wall Street banks, recipients of more than $300 billion in federal taxpayer bailouts in the worst credit collapse since the Great Depression, are using that money to prey on states and cities suffering from recession-induced deficits. They have massive taxpayer provided assets to wave under the noses of mayors of cities desperate to cover shortfalls. The deals invariably are very good for investors and, long-term, very bad for citizens.
The ultimate goal of Wall Street, and the billionaires who run it, is to privatize everything that is not nailed down. Our shortsighted, visionless and corrupt politicians, who gain personal rewards from the selling off of America, are accommodating them. The arranger of the Chicago parking meter deal, Mayor Richard M. Daley, made out OK. He now works for Katten Muchin Rosenman, the law firm that represented the city in the sale of its parking meters, downtown parking garages and the Chicago Skyway. (Yes, other pieces of Chicago, besides the parking meters, have already been sold off.) He is also on the payroll of JP Morgan Chase.
Reason Foundation, a pro “free market,” libertarian think tank and strong advocate of privatization, publishes an Annual Privatization Report. Reason Foundation avidly supports the selling off of public assets in what it calls “public-private partnerships.” If you can stand the cheerleading for privatization, their website is a good place to keep track of privatization efforts around the country. If you spend time there you will learn that the Reason Foundation is thrilled that New York, Pittsburgh, Sacramento, Memphis and Harrisburg are considering privatizing their parking assets. You will read its ecstatic report that Osceola County Florida is “partnering with the private sector” in managing its library. And you will learn that last year Ohio became the first state to sell off a state prison to a private operator. It went for $72 million.
Privatization deals are being made by elected officials, in every major city in the country, behind closed doors, out of site of public scrutiny. The public sector is eroding, and the danger of this selling off of America can’t be overstated. The media is lax in covering these behind-the-scenes deals and tends to present private takeover of public assets in a neutral if not favorable light, although after the fact, it will report on how the citizenry hates it.
Privatization is one of the most dangerous aspects of the corporate takeover of government and politics in America. Americans, who as a group suffer from an unhealthy worship of money and power, and who naively conflate capitalism with freedom and democracy, have yet to raise a significant challenge to these ominous trends. As a nation, we have bought the decades of false corporate messaging that the private sector is more efficient and cost effective than government and the public sector. So, we are surprised, and even outraged, when the results of corporate takeover are unsatisfactory.
When we wake up and realize there is no public sector left, and we have no real voice, anymore, in how our country, state and cities are run, when democracy is nothing more than a farce (which it is close to becoming), it will be too late.