Notes on Pensions / Parking Arrangement

Sale of parking could aid other projects (P-G, Joe Smydo)

Yes, the “$300 million” we’ve all been mentioning is only a practicable bare minimum. We all hope to, and expect to, earn more for the lease. From the article, it sounds as though most would prefer to plow any overage also into pensions.

Mayor releases revised parking lease proposal (P-G, Joe Smydo)

Congratulations, community! Now there probably won’t be any overage to speak of.

Last but not least:

Article here: Bloomberg, Darrell Preston. It looks like Chicago’s private parking operator is projected (somehow or another) to collect $11.6 billion in revenues over the 75 years of its lease, or an average $154 million per year — with which it must also run that operation. Looks like Chicago’s operator paid $1.15 billion for the concession on day one, or the equal of 7.5 years worth of projected revenue, that is 10% of the lease.

Here is the full context of the term “dubious” in the article:

The deal was “dubious” for Chicago, its Office of the Inspector General said last year, because the city’s chief financial officer, who negotiated the agreement, failed to calculate how much the system would be worth over 75 years. The present value of the contract was $2.13 billion, more than the $1.15 billion the city received, it said. (ibid)

So that city office claims the lease ought to have been worth about 18% of lease revenues up-front over its lifetime, instead of just 10%.

ASIDE: Chicago has an Office of the Inspector General?!? Sounds like some kind of Controller on Crack, or an Auditor Plus Attorney General. Do you suppose it’s a full-time, serious operation?

Chicago just does things differently. It elects its City Clerk — sound like fun?

8 thoughts on “Notes on Pensions / Parking Arrangement

  1. MH

    Seriously, we're paying for something that should have been paid for 20 or 30 years ago. City government has hidden and avoided and otherwise kicked this can down the road for a long as possible. Limiting the scope of the lease keeps potential assets safe because they can't be spent. It isn't like the city has lost the ability to put an extra $1/hour on the parking meters. It just isn't selling it right now.

  2. BrianTH

    From the article:

    “In return for these changes, Mr. Ravenstahl agreed to expand a no-compete zone, Downtown, that discourages construction of new public parking garages by the city and parking authority.”

    Does this imply Hizzoner is in ongoing negotiations with the approved bidders?

    Anyway, hopefully that also means the changes will not end up seriously affecting the price.

  3. Anonymous

    MH – the pension has NEVER been funded. Not 20 or 30 years ago, 100 years ago.

    As approved (and sometimes required) by the State.

    Thanks state!


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