Nov 19, 2009 11:00 pm US/Central
New Data Shows City Losing Millions On Meter Deal
Company Could Net $80 Million Next Year, According To Projections
CHICAGO (CBS) ―
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Chicago parking pay box (file).
CBS
There are new indications that Chicago may have left hundreds of millions of dollars on the table when it leased its parking meters to a huge financial conglomerate.
CBS 2 has examined documents that project a huge financial windfall for the new private meter company.
The documents show the company expects to take in almost $80 million next year alone. With periodic increases, Chicago parking meters could soon yield $100 million a year.
The company won't comment on what appear to be their own numbers. It even sent attorneys to try to keep us from reporting what could rekindle the furor over the hastily approved lease deal.
The internal documents obtained by CBS 2 and
theexpiredmeter.com reveal that LAZ Parking projects $75 million in proceeds next year, the second year of the 75-year meter lease, with expenses of $15 million. That would be a net income of $60 million.
Those forced to feed those meters aren't pleased with the company's good financial fortune.
Experts have told The Expired Meter those numbers indicate the city may have grossly undervalued a real cash cow. Some experts say the parking-space lease should be worth $1.56 billion to nearly $2 billion.
Chicago was paid $1.16 billion for the lease, meaning the city may have undervalued the deal by $400 million to $800 million, according to Mike of The Expired Meter.
It's been nearly a year since the rates went up and those boxes started appearing. People have gotten used to them, almost accepting them, until they learned the latest revenue projections.
"That's pretty crazy," one man said.
But the numbers come as no surprise to the alderman who fought the deal from the start.
"The administration needed cash, they needed it fast, and they made a rush to judgment on this meter contract," 32nd Ward Ald. Scott Waguespack said. "And they also listened to a third-party consultant who essentially gave them the idea, lobbied for the idea, closed the deal and benefited from it."
The city's take from the meters up until last year was in the $20 million range, through 2004, 2005, 2006 and 2007. We don't have last year's numbers and this year's aren't in yet. But LAZ Parking estimates next year, the second full year the meters are in private hands, will quadruple the recent take.
In the view of Mike, "(the city of Chicago) basically went down to the pawn shop, took the valuable family heirloom and sold it for a fraction of its cost."
The documents also show revenue from the meters was far less than expected at the beginning of this year, but has been growing steadily every month as the unofficial boycott loses steam and people return to their normal -- although now more expensive -- parking habits.
CBS 2 Chief Correspondent Jay Levine and the Chicago parking news website theexpiredmeter.com contributed to this report.
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