Update: the IG’s press release and report are available (both PDF)
Reports are starting to come in from the inspector general’s press conference about the parking meter privatization deal, and as Ben Joravsky predicted, it was a doozy.
WBEZ: “The inspector general estimates that bad deal will cost the city $997 million.”
Trib: “[David] Hoffman said the city relinquished future parking meter revenues conservatively estimated at $2.13 billion.”
Sun-Times: “Hoffman has reached the ‘conservative’ conclusion that Chicago Parking Meters LLC paid the city $974 million less than the system would have been worth to the city if it raised rates by the same amount and kept the meters for the next 75 years.”
Ben Joravsky and Mick Dumke, 5/21:
“But the information was revealing. It confirmed that Chicago Parking Meters assumed its revenues would go up each year. If the middle number can then be seen as a conservative base, it means the company puts a value of $202,918 on 519,480 hours of meter use (37 hours a week per meter x 270 meters x 52 weeks a year), or about 39 cents an hour. For 36,000 meters that works out to more than $66 million a year—and nearly $5 billion over the life of the agreement. Some meters elsewhere in the city may not generate as much money, but others, such as those in the Loop, could be expected to yield more. Plus, it’s likely that more parking spaces will be added to the system as the company switches from meters to pay boxes.
“Even if investment costs and inflation knocked the total value down by an astronomical amount—say 50 percent—that would still suggest the city got less than half what the system was worth.”