As Chicago grapples with the fallout from a disputed parking meter deal, the stakes for the city's finances continue to climb. An arbitration panel's determination could land the city a bill upwards of $100 million due to purported violations under former Mayor Lori Lightfoot's administration. The deal in question, struck with Chicago Parking Meters (CPM) in 2008, turned over control of the city's paid street parking to the private company for a period of 75 years.
Amid the throes of the COVID-19 pandemic, the city had reclaimed 4,007 parking spaces, a value-decreasing move during the economic tumult. According to The Chicago Tribune, two months following their devaluation, Chicago returned 2,646 spots to CPM for a massive credit, holding on to 1,361 spaces as reserves. This financially advantageous back-and-forth, labeled 'arbitrage' by city staff, has now been marked as a violation by the arbiters, potentially decreasing the system's value, according to documents uncovered during proceedings.
Chicago's Chief Financial Officer, Jill Jaworski, mentioned that while the administration is "vigorously defending itself," measures such as converting reserve spaces to concession spaces could mitigate any damages. "The city may be able to cover the potential cost by giving CPM control of more parking spaces," Jaworski told The Chicago Tribune. Currently, the city benefits mostly from reserve spaces, but CPM enjoys all revenue from concession spaces.
Originally, the city's controversial move was designed to leverage the reduced value of parking spaces during the pandemic for the city's gain. The outcome of the arbitration, focused on by an independent third-party appraiser, will dictate the financial consequences. As reported by The Chicago Sun-Times, city officials understood the strategy embodied risks, but Chicago's current Mayor Johnson's administration insists that "the contract allowed the actions the city took."
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