The Chicago City Council is set to approve a $2.53 billion sale of the city's parking meter lease to private investment firm Stonepeak. This new deal represents an improvement over the original 2008 transaction, which saw the city sell rights to its 36,000 metered spaces for 75 years for $1.15 billion during a financial crisis. The original buyers, Chicago Parking Meters LLC, had generated approximately $2.2 billion in revenue by 2025, far exceeding their initial investment with 57 years remaining on the lease.
The new agreement includes a one-time payment of $75 million to the city upon transfer of the meters to Stonepeak, plus 5% of annual net operating income through 2083, projected to generate an additional $376 million over the next 57 years. City officials also estimate that Stonepeak can expect over $7.5 billion in profits from the parking meters during the lease term. The deal also stipulates that at least 50% of employees working on the parking meter system must be Chicago residents.
Aldermen stated that the additional revenue for Chicago will be directed towards the city's pension funds, which face approximately $36 billion in unfunded liabilities and a funding ratio of only 28%. However, even if the entire expected $451 million from the new deal went to pension funds, it would not meet the minimum annual contribution of $3.35 billion actuaries say is needed to reach a 90% funding goal. The city currently makes $2.85 billion in annual pension contributions.
Despite the perceived improvements, some aldermen expressed skepticism. Ald. Bill Conway argued that after accounting for interest expenses and depreciation, the city's net profit-sharing might be closer to $140 million, significantly less than projected. Ald. Jason Ervin and Ald. William Hall voted against the deal in the Finance Committee, with Ervin citing a rush to approve and Hall criticizing the lack of Black-owned firms' involvement. The City Council faces a September 30 deadline to approve the deal or risk potential arbitration and legal costs.
