Aldermen are lawyering up and clamoring for more information as they prepare to approve or reject a new sale of Chicago’s marking meters.
And the question growing at City Hall this week amid legal uncertainty: Does the City Council have leverage to improve the infamous privatization deal?
“I don’t know,” Ald. Andre Vasquez said. “And when the answer is I don’t know, the response should be: Let’s pause.”
Vasquez and 13 other aldermen sent a letter to Stonepeak Partners, the New York investment firm aiming to buy the much-loathed lease from Chicago Parking Meters LLC.
The aldermen — a group that runs City Council’s ideological gamut, but includes many progressives — told the company they are concerned over its ownership of Omni Air International, a subsidiary that carries out long-haul deportation flights for the federal government.
“Chicago’s values as a welcoming city require that public institutions and those who operate public assets consider the broader human impact of their partnerships and investments,” the letter said.
The group also demanded Stonepeak provide an array of information, including any other immigration enforcement connections and its plans for parking meter data collection, and to allow Chicago residents, who despise the original 2008 deal masterminded by former Mayor Richard M. Daley, to ask questions and share their thoughts on the transaction.
It’s an opening shot at the company — a sign that many in the City Council believe they have a blanket right to accept or reject the deal that could be used to extract concessions.
Whether or not aldermen do is the primary question surrounding City Hall discussions about the sale.
The $1.15 billion cash payout Chicago got for selling a 75-year lease of the system, after only three days of City Council discussion, pales in comparison to the what it has earned for what it has brought in for its private owners, Morgan Stanley and Deeside Investments, a firm reportedly nearly half owned by the Abu Dhabi Investment Authority.
The system generated $189 million in revenue last year and over $2 billion total since the sale, according to a recent audit, all while severely restraining the city’s ability to make major road changes that remove parking spots and as parking costs rise.
The aldermen who believe the City Council has leverage point to two clauses in the ordinance and contract behind the deal. First, they note the ordinance says aldermen get to approve any sale, “notwithstanding” other rules. Second, they note that the contract allows the “background and reputation” of proposed operators to be considered.
It is a high stakes interpretation. The well-monied buyer and sellers would likely argue the city is required to approve a sale so long as a purchaser can be proven to operate the system well, a lower bar that Stonepeak would presumably pass. If aldermen block a deal with legal standing Stonepeak deems faulty, they could trigger a massive lawsuit.
Mayor Brandon Johnson has carefully stayed out of the back-and-forth, though he did tell reporters aldermen only get a “quite miniscule” scope to review the buyer. His administration appears to believe the contract forbids Johnson from blocking a deal, but officials have remained mum on whether they think aldermen are similarly obstructed.
Many aldermen have criticized Johnson for signing a confidentiality agreement that the administration says blocks it from sharing analysis with aldermen on the deal.
A group of 22 aldermen sent Johnson a letter Monday promising to vote “no” on the deal not because of its merits, but because Johnson’s administration “has systematically withheld the information necessary for property evaluation.”
The letter accused Johnson of failing to give timely notice of the sale to aldermen and slammed him for the confidentiality agreement. It also said Johnson had agreed to a “binding timeline” that left aldermen without enough time to vet the sale and demanded support from Johnson’s lawyers and finance experts.
Johnson’s administration has flatly rejected the accusations. Spokesperson Allison Novelo said Johnson’s team shared notice of the sale “at the earliest practicable opportunity” and has not placed a binding timeline on aldermen.
“That date does not alter City Council’s independent authority over its review, determination or timeline for consolidation of the matter,” Novelo said of the June 30 date by which Johnson agreed to report to Stonepeak on the deal’s progress.
The city has connected aldermen to Stonepeak and retained law firm Jones Day for independent analysis, Novelo said.
Many of the aldermen who signed the letter criticizing Johnson for not letting them analyze the deal have simultaneously argued they have no power to improve the parking meter contract, a remarkable position that shows how the sale might lead to political jockeying.
Ald. Gilbert Villegas called the deal “ironclad” Tuesday in front of reporters, even as he accused Johnson of not giving him the time to vet it. The parking meter lease cannot be changed, he said.
“There is no deal. I’m rejecting it because I wouldn’t have voted for it the first time,” he said.
But Villegas nonetheless promised to vote “no” and said it’s up to Johnson to figure out how to get a majority of aldermen to support the deal if that is necessary. He refused to answer questions about whether his vote could open the city up to a lawsuit or a costly arbitration outcome.
“They should go pursue the 26 votes needed to pass it. I’m not voting on it, and that’s my prerogative,” Villegas said. “There are 28 people who have not made a comment on whether they support it, which means there are sufficient votes there on the table to pass a deal. I’m just not going to be one of them.”
But despite the political hot potato, well over a majority of aldermen have either pledged a “no” vote or expressed extreme skepticism over the deal, including the progressives squarely focused on Stonepeak’s connection to deportations.
Vasquez criticized the group behind the letter slamming Johnson for not reaching out to more aldermen. They “further galvanized” the City Council by not engaging with other aldermen before moving ahead, he said.
“There are plenty of members who would have signed on to that letter as well for the same good government concerns,” he said. “You’re just doing it to posture and not just because you want the council to actually consider these matters.”
The administration should have communicated better, Vasquez said. Aldermen must slow down to vet the sale now, a process that could take months if not years, he said.
“We have to talk amongst ourselves to solve it,” he said. “There’s just so many steps that need to be done for us to do this, and I think when you look at what I believe is a fledgling independent council, we’re just starting to learn that muscle.”
Alds. Bill Conway and Red Burnett, the two aldermen to first publicly argue that the sale could give aldermen leverage to negotiate a better deal, said this week that attention must turn now to the deal itself and not just questions of procedure.
Conway said he didn’t sign the letter because aldermen should instead be focused on a simple question: “Does this decision make sense for the taxpayers.”
“That letter didn’t discuss the taxpayers at all,” he said. “I don’t need the mayor to be advising us on how to do a business deal. He can continue to screw up how to make a grocery store and the Bears. I want our own independent advisors.”
It’s too early to say whether aldermen will be able to come together to use their leverage, if they even have any, Burnett said.
“I don’t think we are even at a stage where we can come together and actually discern what’s the best decision,” he said.
