FacebookTwitterGoogle+RedditEmail

Ignoring Chicago, Toronto Has a Big, Stupid Idea

by

Last weekend, the good folks of Toronto, Ontario learned that their elected officials at City Hall are considering selling off the Toronto Parking Authority – which operates dozens of municipal parking lots as well as on-street parking. [1]

It’s a big, stupid idea that indicates our “city fathers” apparently don’t read, but also that they can’t see through the latest scam being sold by some corporate lobbyist.

It’s as though the Innocents in Toronto City Hall have never heard of the parking meter scandal that ate Chicago and has become an unmitigated disaster – even though more press has likely been given to that fiasco than to any other public-private partnership (P3) undertaken in recent U.S. history.

To recap: in 2008, Chicago’s then-Mayor Richard Daley convinced city aldermen to approve a 75-year lease by which the city’s 36,000 parking meters were handed over to a private consortium led by Wall Street titan

Morgan Stanley. In exchange, Chicago got a one-time payment of $1.2 billion.

Within a short time, it became clear that this was a bad deal, with parking meter rates suddenly increasing fourfold, and free parking in the evenings jettisoned by the new private owners. Obviously, Chicago’s residents, accustomed to street parking, were forced to find other arrangements, while Chicago’s retail and entertainment sectors were hit badly by the new rates, which caused a marked “decrease in economic activity”. [2]
But the city’s taxpayers were hit even harder

According the The Atlantic, “An inspector general’s report found that the deal was worth at least $974 million more than the city had gotten for it. Not only would the city never have a chance to recoup that money or reap new meter revenue for three-quarters of a century, clauses buried in the contract required it to reimburse the company for lost meter revenue.” [3]

Not only did the city of Chicago give up billions of dollars in revenue when it signed the 75-year lease, the contract was also “the gift that keeps on giving” to Morgan Stanley and friends. Buried in the contact was a clause (called Adverse Action rights) that means “any action that prevented parking at the meters – for example, when a sewer was repaired or a street fair was held – would require the public to reimburse the contractor for its lost parking meter revenue.” [4] Parades, festivals, even routine road maintenance cause financial penalties for the city under the contract, amounting to millions of dollars.

Moreover, a 2009 study by Chicago’s Active Transportation Alliance found that “…every potential project on a street with meters, including bus rapid transit, bicycle lanes, sidewalk expansion, streetscaping, pedestrian bulb-outs, loading zones, rush hour parking control, mid-block crossing and temporary open spaces” would cost the city money because it would mean less parking at parking meters owned by the Morgan Stanley consortium. [4]

As one writer put it, “anything that promoted less driving” would cost the city money. [5]

Chicago privatized its parking meters because of budget troubles. But according to Ellen Dannin at Truthout, “privatization has made basic city maintenance more expensive…Before signing the Parking Meter contract,

Chicago’s budget for sewer and water main repairs did not include the additional costs of paying Adverse Action claims. Now AA compensation must be added to the cost of repairs. That means less money is available, including less money to make repairs. That budget pinch may force the city to defer maintenance and repairs, to defer repairs or replacements past the useful life of the current infrastructure, or to take other cost-saving measures that are not optimal.” [6]

As well, other clauses in the contract mean Chicago “won’t be able to make, for 75 years, fundamental economic development, land use or environmental policy decisions – anything that would affect the revenue of the parking company.” [7]

Apparently, Chicago’s city aldermen were given a mere two days to review the 686-page parking meter contract. As well, there were no public hearings on the deal. Now Chicago has become a case-study on just how badly the public can be screwed by privatization of its municipal assets.

The fact that Toronto City Hall is even considering its own parking meter deal – despite the evidence in Chicago – conjures up P.T. Barnum’s observation that “there’s a sucker born every minute.” Just why we keep electing them is another matter.

Footnotes:

[1] David Rider and Patty Winsa, “John Tory denies report Hydro One is in talks to buy Toronto Hydro,” The Toronto Star, March 4, 2017.

[2] Donald Cohen, “Cities Need to Weight Costs of Private Partnerships,” The New York Times, July 23, 2013.

[3] Molly Ball, “The Privatization Backlash,” The Atlantic, April 23, 2014.

[4] Ellen Dannin, “Costs of Privatization Hidden in Plain Sight,” Truthout, January 28, 2014.

[5] Ibid.

[6] Ibid.

[7] Cohen, op. cit.

More articles by:

Joyce Nelson’s sixth book, Beyond Banksters: Resisting the New Feudalism, can be ordered at: http://watershedsentinel.ca/banksters. She can be reached through www.joycenelson.ca.

Weekend Edition
January 19, 2018
Friday - Sunday
Louis Proyect
Morality Tales on the American Malaise: the Films of Rick Alverson
January 18, 2018
Patrick Cockburn
The Destabilizer: Trump’s Escalating Threats Against Iran
John W. Whitehead
Silence Is Betrayal: Get Up, Stand Up, Speak Up for Your Rights
Andrew Day
Of “Shitholes” and Liberals
Dave Lindorff
Rep. Gabbard Speaks Truth to Power About the Real Reason Korea Has Nukes
Barbara G. Ellis
The Workplace War: Hatpins Might Be in Style Again for Women
Binoy Kampmark
Corporate Sickness in May’s Britain
Ralph Nader
Twitter Rock Star Obama’s Silence Must Delight Trump
John G. Russell
#Loose Lips (Should) Sink … Presidencies … But Even If They Could, What Comes Next?
David Macaray
The “Mongrelization” of the White Race
Ramzy Baroud
In Words and Deeds: The Genesis of Israeli Violence
January 17, 2018
Seiji Yamada
Prevention is the Only Solution: a Hiroshima Native’s View of Nuclear Weapons
Chris Welzenbach
Force of Evil: Abraham Polonsky and Anti-Capitalist Noir
Thomas Klikauer
The Business of Bullshit
Howard Lisnoff
The Atomized and Siloed U.S. Left
Martha Rosenberg
How Big Pharma Infiltrated the Boston Museum of Science
George Wuerthner
The Collaboration Trap
David Swanson
Removing Trump Will Require New Activists
Michael McKinley
Australia and the Wars of the Alliance: United States Strategy
Binoy Kampmark
Macron in China
Cesar Chelala
The Distractor-in-Chief
Ted Rall
Why Trump is Right About Newspaper Libel Laws
Mary Serumaga
Corruption in Uganda: Minister Sam Kutesa and Company May Yet Survive Their Latest Scandal
January 16, 2018
Mark Schuller
What is a “Shithole Country” and Why is Trump So Obsessed With Haiti?
Paul Street
Notes From a “Shithole” Superpower
Louisa Willcox
Keeper of the Flame for Wilderness: Stewart “Brandy” Brandborg
Mike Whitney
Trump’s Sinister Plan to Kill the Iranian “Nukes” Deal
Franklin Lamb
Kafkaesque Impediments to Challenging Iran’s Theocracy
Norman Solomon
Why Senator Cardin is a Fitting Opponent for Chelsea Manning
Fred Gardner
GI Coffeehouses Recalled: a Compliment From General Westmoreland
Brian Terrell
Solidarity from Central Cellblock to Guantanamo
Don Fitz
Bondage Scandal: Looking Beneath the Surface
Rob Seimetz
#Resist Co-opting “Shithole”
Ted Rall
Trump Isn’t Unique
January 15, 2018
Rob Urie
Democrats and the End(s) of Politics
Paul Tritschler
Killing Floor: the Business of Animal Slaughter
Mike Garrity
In Targeting the Lynx, the Trump Administration Defies Facts, Law, and Science Once Again
Thomas Hon Wing Polin
Hong Kong Politics: a Never-Ending Farce
Uri Avnery
Bibi’s Son (Or Three Men in a Car)
Dave Lindorff
Yesterday’s ‘Shithole Countries’ Can Become Classy Places Donald, and Vice Versa
Jeff Mackler
Lesser Evil Politics in Alabama
Jonah Raskin
Typewriters Still Smoking? An Interview with Underground Press Maven John McMillan
Jose-Antonio Orosco
Trump’s Comments Recall a Racist Past in Immigration Policy
David Macaray
Everything Seems to Be Going South
Kathy Kelly
41 Hearts Beating in Guantanamo
FacebookTwitterGoogle+RedditEmail