Mayor Brandon Johnson said Tuesday the city will not try to buy back Chicago’s parking meters after all, following days of speculation over whether he would attempt to finagle its way out of an infamous sale almost two decades ago.
Speaking to reporters at an unrelated event, the mayor confirmed he will forgo potentially purchasing the meters from the private company Chicago Parking Meters.
Johnson said his team looked into making a bid for the citywide system, which the company took control of for $1.2 billion in a 75-year lease the City Council approved at Mayor Richard M. Daley’s behest in 2008, but determined the cost was “far too high.”
Chicagoans overwhelmingly hate the deal — which has seen the private investors already recoup their investment with decades of control ahead of them and parking rates continuing to rise — and City Hall has been trying for years to figure out a way out of it, to no avail.
“I want to put the rumors to bed. We are not pursuing a purchase of the city’s parking meters at this time,” Johnson said.
A spokesperson for Chicago Parking Meters did not immediately respond Tuesday.
The company reported over $160 million in parking revenues in 2024, up from nearly $151 million in 2023, the two most recent years for which revenue data is available.
Top Johnson advisor Jason Lee shared little Tuesday morning, citing a non-disclosure agreement.
“Things come across the desk and we do due diligence on things that are presented,” Lee said ahead of Johnson’s announcement. “You have a fiduciary responsibility to look at all possibilities.”
Like many top City Hall advisors before him, he criticized the original parking meters sale. The contract was one sided and the money the deal raised for Chicago was quickly spent, he said.
“Privatization in general was a hot idea in municipal circles, but I think there were some crucial challenges that affect us today,” Lee said. “The valuation the deal was sold at was probably too low.”
Facing the fallout from the 2008 recession, the city sold a 75-year lease of the city’s 36,000 parking meters to a private buyer led by Morgan Stanley, agreeing to also boost fees for the first time in 20 years. Though it was the first of its kind nationally, it was just one privatization effort under Daley, coming on top of the lease of the Skyway toll road, downtown parking garages, and the attempted, but failed privatization of Midway Airport.
The deal was set to net the city about $1.15 billion — with $150 million being dedicated to plugging the city’s deficit and $400 million being put into a long-term reserve.
Had the city kept the meters and raised rates to the same level it pledged in securing the deal, it was estimated back in 2009 the city would have still earned about $1.5 billion over time.
Between 2009 and 2024, the meters had brought in more than that, however — $1.97 billion in parking revenues alone, $1.87 billion in gross profits and net operating income of $1 billion, according to CPM audits. Meanwhile, the city ran through much of the initial payout to plug early budgets.
Mayor Rahm Emanuel revised the deal in 2013 to allow for free Sunday parking, different hours of operation and the ability for drivers to pay by phone. Efforts to unwind the deal have been unsuccessful. That included a 2009 lawsuit arguing the privatization deal went against the city’s right to create parking and traffic policy and tied future officials’ hands; and a 2021 class-action suit alleging CPM had a “monopoly” that was unfair to drivers.
Johnson said Tuesday the cost to buy the parking meters now would be “much more” than the initial sale price.
“The more we looked into it, the more problems emerged,” he said. “We would be locked into ever rising debt payments that would require City Council to consistently vote to raise parking rates year after year.”
The bad deal of the past only made it more important for Johnson and his team to be judicious, Lee said. “It would be easy in a fit of exuberance to rush into another bad deal. So you have got to be very careful and scrutinous because there’s a lot of risk.”
Ald. Bill Conway, 34th, said Tuesday morning he first heard of a planned sale of the meters by its current owner from friends in private equity. The downtown alderman, a DePaul University finance professor himself, believed the latest debt sale by Johnson’s administration – unnecessarily large, in his view – may have been sized with a parking meter deal in mind.
Whether or not a new deal would have been a good idea would have depended on a number of factors, he said, speaking before Johnson’s backed away from the rumored purchase. Major changes in how Chicagoans use cars make the matter hard to predict, he added.
“The devil’s in the details,” he said. “And unfortunately, the mayor’s office has not shared any details with us on this, and I think it’s important that the mayor be transparent about this.”