Alderman meets with bond experts on buying back parking meters
BY FRAN SPIELMAN City Hall Reporter firstname.lastname@example.org May 13, 2013 10:54AM
Updated: June 15, 2013 6:16AM
Downtown Ald. Brendan Reilly (42nd) said Monday he’s been meeting with municipal bond experts to try and identify ways to buy back Chicago’s 36,000 parking meters and he’s been told it’s “within the art of the possible.”
Mayor Rahm Emanuel has summarily dismissed the idea of buying back the meters from the company that paid the city $1.15 billion to control them for 75 years, adding, “We don’t have the money. We spent it prior to my coming here. We don’t have the billions of dollars.”
Reilly strongly disagreed in a Monday email to his constituents.
The alderman said he has been “meeting with municipal bond experts to try and identify ways to buy back this valuable public asset” instead of living with the nightmare deal for the next 71 years.
“Although we would have to potentially pay more for this asset than we originally leased it for, buying it back now could limit our exposure to future, costly litigation by [Chicago Parking Meters LLC] and allow the city to again control the asset decades before the lease would be due to expire,” the alderman wrote.
“Bond experts have informed me that this approach is within the art of the possible and I will continue to aggressively pursue this option.”
City Hall sources said Emanuel’s legal and financial teams explored “every available option, including finding a way out” of the widely-despised parking meter deal.
But, former Mayor Richard M. Daley’s decision to drain nearly all of the parking meter proceeds to balance his last few budgets without raising taxes took the re-acquisition option off the table, the sources said.
“While the city might be able to borrow money retired by future parking meter revenues, a city bonding deal without additional equity would not be attractive enough compared to potential competition or CPM’s own capabilities. In addition, any deal like this, would increase pressure on future rates. This route is unrealistic and untenable,” a mayoral spokesperson said.
Reilly said his “back of the envelope” conversations with finance experts have convinced him that it would be possible to borrow the money against future parking meter revenues to bankroll the re-acquisition.
“If it was structured in such a way that we get immediate control of the asset as far as decision-making about how the meter system is run and we forego 25-to-30 years of revenue to service the debt off the meters, that could put us in a position to own that asset and benefit from that revenue stream after we’ve paid off the bonds. That could be decades before the lease deal expires. That’s what I want to understand before we close the door on that altogether,” Reilly said.
Two dozen Chicago aldermen have declared their support for Emanuel’s plan to trade a longer paid parking day for free neighborhood parking on Sundays, two votes shy of the “silent majority” needed for City Council passage.
Reilly has been leading the charge to drop the swap and simply pay Chicago Parking Meters $63.8 million in disputed claims. He’s concerned that extending the parking day by one hour a day for 25,818 meters and by three hours for 3,217 other meters would create a hardship for his River North constituents and give the company yet another windfall.
Emanuel has portrayed free Sunday parking as a boon to neighborhood retailers and claims Chicago taxpayers could come out of the swap $1 million ahead.
But Reilly quoted unnamed colleagues as warning the Sunday freebie could “actually inhibit” neighborhood retailers by encouraging motorists to occupy spots all day.
“Visitors could take advantage of those free meters by parking their car in a spot on Saturday night and not picking it up until Monday morning,” the alderman wrote in the “42nd Ward Update” to constituents.
“In some wards, that would make it very difficult for residents to secure short-term street parking to support local businesses on Sunday.”
Once again, Reilly applauded Emanuel for “protecting us from $1 billion in exposed liabilities” over the remaining 71 years of the lease by convincing Chicago Parking Meters to accept the city’s reimbursement formula for metered spaces taken out of service because of policing actions.
But Reilly said he simply cannot support the mayor’s decision to swap free Sunday parking for a longer parking day. Nor does he believe Emanuel has given aldermen enough time to wade through a parking meter settlement that’s as thick as a phone book.
“Although 28 days is far better than the 72 hours the Daley administration gave the City Council to review the original parking meter lease, setting this artificial deadline to review such a complex proposal and reams of data is somewhat reminiscent of the very process that resulted in ... making the mistake of approving this disastrous lease agreement in the first place,” he wrote.
Reilly’s opposition to the mayor’s parking meter changes marks the second time in two months that he has taken Emanuel on over the issue of parking.
Warning of a “chilling” impact on tourism, Reilly also broke with the administration over the mayor’s plan to shift Chicago’s parking tax from a sliding scale to a fixed percentage.
As vice chairman of the City Council’s Budget Committee, Reilly said Monday he considers himself an Emanuel supporter and prides himself on the “solid working relationship” the two men have built over the last two years.
“I do not relish this public disagreement with the mayor,” Reilly wrote.
“But, as I proved during the Daley administration, I will always stand up and oppose policies when I genuinely believe they could hurt downtown Chicago or the city at large.”