City Leased The Streets Along With Its Parking Meters: Study

The deal to lease Chicago's parking meters to a private company has crippled the City's ability to make comprehensive transportation planning, a new report finds.

Giving up control of the placement and pricing of meters stripped the City of the public right of way, its most important tool for urban street planning and for shaping people's parking and transportation habits, according to the study released Tuesday by the Active Transportation Alliance.

"This means 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 are dictated, controlled and limited by parking meters," the report reads. "These restrictions severely limit innovative planning for bicyclists, pedestrian and transit users."

The City lambasted the report in an email response released late Tuesday afternoon by budget department spokesman Pete Scales, saying it showed a fundamental misunderstanding of the parking meter lease deal and the law of public right of way. It also chastised the ATA for not reaching out to the city before publishing the report.

"The claim that the City has lost control of 'one of their most powerful urban planning and revenue-generating tools' is absolutely incorrect," the response reads. "To suggest that the parking meter concession 'restrictions will severely limit innovative planning for bicyclists, pedestrians and transit users' is wholly wrong. To the contrary, the City continues to pursue a wide range of planning efforts and construction projects, part of an ongoing effort to offer attractive non-driving options."

ATA spokeswoman Margo O'Hara insists the group reached out to the City when it first began work on the report late last year but got no response.

Giving up control of the meters also means money from meters no longer goes to improving nearby sidewalks and roads, a formula the ATA says is what makes for the most sophisticated urban planning.

"A key element of competitive, fair parking strategy is that the increased revenues are used to generate a healthier, more pedestrian-friendly and appealing environment in which it is attractive to shop," the report reads.

Instead, the revenue generated by meters goes to the private company, Chicago Parking Meters, LLC.

"The reason why this is so important to us," O'Hara said, "is that we want to see our streets be safe for pedestrians, be safe for cyclists with innovative street designs. This deal limits and at its most extreme penalizes these designs."

The report recommends that planners adjust parking meter rates based on the principle of market-rate pricing: lower prices where lots of meters are open and raise rates where there's overcrowding.

In its response, the City says its rate increases early this year did just that.

"As ATA notes, the objective of market-based pricing is to bring pricing to a level that will provide optimal utilization of the system. The meter rate increase implemented in early 2009 were intended to do just that, specifically reducing cruising for underpriced parking and promoting turnover and availability," the response said.

The Active Transportation Alliance began researching the report shortly after the meter deal was approved last December.

"We starting looking into it first because of all the political secrecy around the deal," O'Hara said, "but then we decided to ask, 'Well, what is the right price for parking meters?' Raising rates is not necessarily bad -- and parking is often hugely subsidized -- so long as the City is giving people other options, like more bike paths or making the trains more reliable.

"Our impression is that the lease was done from a budgetary perspective and not from a transportation perspective," O'Hara said.

The lease does allow for the city to change meter rates, locations and hours of operation, but it must compensate Chicago Parking Meters, LLC, for any lost revenue. This need to reimburse the private operator for any lost revenue all-but negates the city's ability to change meter rates and hours, as the case the of 32nd Ward Ald. Scott Waguespack illustrates.

Waguespack wanted to reduce the charged hours on 250 meters in his ward for the next three years, as the Reader's Ben Joravsky and Mick Dumke reported in the second part of their exhaustive series chronicling the parking meter deal. But told by the city that he would have to find a way to compensate for over $600,000 in lost revenue, Waguespack scrapped his plan.

Cindy Gatziolas, a spokeswoman for the Mayor's Office of Special Events, said that the City's agreement with Chicago Parking Meters, LLC allows for a certain percentage of the meters to be out of service, without penalty, for events like street fairs and festivals, but wouldn't say what that the percentage was.

The Active Transportation Alliance report comes three weeks after Chicago Inspector General David Hoffman issued a study that determined the city leased the parking meters for nearly $1 billion less than their potential market value and with almost no consideration of the long-term financial impact.