CHICAGO | The city of Chicago already has deals to lease an airport, a toll road and garages. Now it wants to add parking meters to that list to raise some much-needed cash.
Mayor Richard Daley unveiled a proposal Tuesday to lease Chicago's metered parking system to a private operator for more than $1.1 billion in a deal that will drive up parking rates but help the city weather tough economic times.
"This use of metered parking proceeds will give us the flexibility to address our worsening economy, protect our city finances and taxpayers, and keep investing in our city's human needs over the next few years," Daley said at a news conference.
The 75-year lease deal may be a boon for city coffers but it's a bust for motorists who will see parking rates climb at the city's 36,000 metered spaces.
Neighborhood hourly meter rates will climb to $1 next year and $2 in 2013 from its current 25 cents. Daytime downtown hourly parking rates will climb to $3.50 next year and then to $6.50 in 2013 from $3. After that, rates will be adjusted annually by inflation.
The proposed lease is the latest for a city that has already cut deals to lease other property to raise money -- including Midway Airport and the Chicago Skyway.
The Chicago City Council has approved a $2.5 billion lease of Midway in a deal the city hopes to close by early next year. The city already has leased the Chicago Skyway in a nearly $2 billion deal and has another $563 million deal to lease downtown parking garages.
The winning parking meter bidder is Chicago Parking Meters, LLC, which includes divisions of Morgan Stanley infrastructure funds. The Chicago Parking Meters operator is LAZ Parking.
Daley plans to use the nearly $1.2 billion in proceeds to pump $400 million into a long-term reserve fund; use $325 million to help balance city budgets through 2012 and spend $100 million on programs to support residents in need. The remainder -- about $324 million -- would be a sort of rainy-day fund "to help bridge the period until the nation's economy begins to grow again," Daley said.
The watchdog group the Better Government Association is concerned that parking rates will go up.
"Do the users benefit? No," said Jay Stewart, BGA executive director.
Daley will ask the City Council to approve the deal at a special meeting Thursday.
