Since the “Great Mistake of 2008,” every time a Chicagoan feeds a parking meter or taps the ParkChicago app, they are hit with a reminder of the political class selling out everyday Chicagoans.
It’s time to get the meters back, regain control over our city’s infrastructure and invest in ourselves.
We are sending money to billionaire investment firms and foreign nations instead of paying for our libraries and parks. Our money flows out of Chicago and into the pockets of Chicago Parking Meters, LLC (CPM), a private consortium that has already stripped Chicago of $2 billion in just 18 years of a 75-year lease and now wants to sell it to another investor to rake in billions more over the remaining 57 years.
As bad as the money leaving our city is, we are also legally trapped without control to invest in, adapt and meet our changing infrastructure needs. We are hamstrung from making changes and face penalties if we do so: If the city installs a bike lane, expands a sidewalk for outdoor dining, repairs a water main, or hosts a fleeting but glorious summer street festival, we must write a “true-up” check to CPM to compensate for their hypothetical lost revenue. Just last year, the city had to shell out a staggering $25.2 million to settle a dispute stemming from pandemic-era stay-at-home orders.
We need to buy our parking meters back — at a price that makes sense for our fiscal situation — to regain control of a key asset and to ease the cost on everyday, hardworking Chicagoans. Parking rates have made living in Chicago less affordable as investors continue to find more ways to maximize profit on the backs of our people. If instead we own our meters we can control the cost increases and help make life more affordable at a time when the price of healthcare, daycare, housing and groceries are leaving people more cash-strapped than ever.
Conventional wisdom is wrong about the $3 billion price tag being too high. Fresh, innovative leadership and new ideas are sorely needed. Parking is no longer just a strip of asphalt for storing cars and handing out orange tickets, it has potential massive opportunities that flip the purchase from a debt-ridden cost to an investment that will yield benefits to all Chicagoans for decades to come.
Here are two ideas that turn the meters into a source of revenue and investment instead of costs and liabilities:
First, we upgrade the ParkChicago app to offer optional monthly subscription tiers with a variety of benefits. Drivers could pay $10/month for perks like waived transaction fees, extra buffer time, and one “get out of jail free” card per year to waive or cancel a ticket. Imagine the parking system making you happy rather than irate if you could get a little perk here or some grace there.
For $30/month, rideshare and delivery drivers could get an “insurance policy” against tickets: a guaranteed 15-minute grace window to grab food orders or drop off passengers without stressing over a parking ticket. We could even create dedicated pick-up and drop-off zones in key high-density areas like the Loop or more narrow streets to simultaneously ease congestion and clogging of bike and pedestrian lanes. Further, not using dedicated pickup and drop-off zones could result in additional tickets to incentivize compliance.
For high-frequency users with a subscription of $50 to $100/month the city could offer access to key locations throughout the city designed to streamline the parking experience. These memberships could unlock high-demand parking spots in key corridors throughout downtown and commercial hubs. We could create partnerships with other parking services like SpotHero (a homegrown company recently acquired by Uber) to show more affordable parking options throughout the city and revenue-share if someone books on another site.
Instead of circling the block for what feels like hours, subscribers could get access to a real-time digital GPS system built right into the app, showing exactly where open spots are located near them so they never have to waste time circling the block.
By getting just a small fraction of Chicago’s 1 million drivers to sign up, innovative software upgrades like these could create $30 million to $50 million in brand-new, recurring revenue every year while giving people more choices and a better experience and also allowing us to freeze or lower rates at the meters.
Second, we use our reclaimed streets to solve a problem for electric vehicle owners who don’t have access to charging. Thousands of drivers want to drive EVs but can’t because they live in apartments and condos without a garage to plug into at night.
The city can start by installing 1,500 curbside EV charging stations at these meters as a pilot program. We can buy electricity at cheap wholesale rates and sell it at standard retail charging rates. Every time a car plugs in, the city wins thrice over: the city generates revenue by providing energy, we collect the standard parking fee, and we reduce carbon emissions as more people adopt EVs. This green energy network will bring in another $7.5 million annually and can scale up to generate more revenue and more charging stations as needed going forward. We could even allow people to pay for a dedicated parking spot overnight on a daily or monthly basis so they could predict and plan for charging while allowing the city to create yet another new revenue stream.
These ideas and numbers reveal a new potential path forward to undo the worst deal in Chicago history. To borrow the $3.2 billion needed for the buyback, the city could use a 40-year bond at a 4.5% interest rate and even sell minority stakes to Chicago-based investors if we can’t finance the entire deal as a city due to this administration’s poor financial decision-making. Our annual interest-only debt payment would be around $144 million, or $174 million if amortized.
With new ideas for revenue, the math starts to work in Chicago’s favor:
• Current meter revenue: $161.0 million
• New app subscriptions: $33 million to 50 million
• EV charging profits: $7.5 million to 15 million
• Saved penalty fees: $15.0 million (The money we stop wasting on “true-up” checks)
• Total annual income: $216 million to 241 million
Our new income ($216 million or more) clears the bond payment and leaves enough room for other expenses associated with operating the system. It doesn’t raise property taxes, it doesn’t take a dime from our city budget, and it leaves us with a multi-million dollar annual surplus. Just a few new innovative ideas can start to tip the scale in our favor, but only if we act.
We still have time.
City Council can review and reject the deal, and the mayor needs to tap into our immense business and financial expertise to pencil a deal that makes sense. We are a city with world-leading financial experts, innovators, technologists, and a strong business community. We can and we must get our parking meters back. We cannot afford to watch our public wealth get passed around global investment markets for another half-century.
This is why the next mayor needs to be forward-thinking, innovative and financially skilled enough to find ways to alter the abysmal state of Chicago’s financial situation. It’s time to take control of our parking meters and finally erase the “Great Mistake of 2008.”
Joe Holberg is running for mayor of Chicago. He was a math teacher on the West Side, then a small business owner and entrepreneur helping thousands of Chicagoans work toward and achieve their financial goals.
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