The city will pay the private firm that leased the city’s parking meters $20 million to compensate it for lost revenue.View Full Caption
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CITY HALL — The city will pay $20 million in 2018 to the private firm that leases the city’s parking meters — in addition to all of the revenue from the meters — under the terms of the much-loathed 2008 deal, officials said.
The city must make “true-up” payments to Chicago Parking Meters to compensate the firm for lost revenue when meters are removed, temporarily taken out of commission with the city’s permission or used by motorists with disabled parking permits, according to the terms of the deal.
Despite changes made by Mayor Rahm Emanuel in 2013 designed to make the deal better for city taxpayers, the 2018 “true-up” payment wil rise 16.3 percent from last year, said Molly Poppe, a spokeswoman for Emanuel’s budget office.
“Since Mayor Emanuel took office, he made it clear that he would never have done this deal and that it was poorly managed,” Poppe said.
Those 2013 changes negotiated by Emanuel included free Sunday parking in some neighborhoods.
The city used much of the $1.157 billion it got up front from the 75-year lease — inked by former Mayor Richard M. Daley — to close short-term budget gaps, making it impossible for city officials to back out of the contract.
The deal included a provision that anticipated the city would raise parking meter rates annually to keep pace with inflation, Poppe said.
Even though city officials have not raised meter parking rates in five years — no doubt fearful of a backlash from already angry voters — the city is still on the hook for the revenue those price hikes would have generated, Poppe said.
A spokesman for Chicago Parking Meters declined to comment.
A year ago, the City Council agreed to let the parking meter firm install 752 new meters — including 153 in the Loop — to reduce the “true-up” payment, Poppe said.
When a private construction project takes meters out of service, the firms are charged the cost, Poppe said. Through the end of September, firms paid $3.6 million to reduce the “true-up” payment, she added.
Companies that close streets for filming also must compensate the city for lost revenue from meters, officials said.