Parking Ticket Geek

« Is ParkMagic Dead? Tribune Reports Red Light Cameras Don't »

Another Dude Thinks Chicago's Parking Meter Lease Was A 'Good' Deal

user-pic
The Parking Ticket Geek

The Geek is an idiot, who gets a lot of parking tickets, and knows how to fight back.

Shhhh!.jpg

Here's a piece of advice.


If you don't know what you're talking about, don't open your mouth.


That's the Geek's way of remaining civil  and respectful, despite a very powerful urge to shout and loudly utilize very coarse language one shouldn't use in front of a priest, a young child or your grandmother.


My barely controllable rage has been triggered by Reuters blogger Felix Salmon freshly penned commentary, "Chicago's good parking deal."


It seems the fresh revelations proving once again that Chicago sold off a valuable asset at fire sale prices inspired him to weigh in on an issue of which, he obviously, has no grasp.


So let's deconstruct Salmon's thoughts, point by point.


There's no indication of Chicago Parking Meters's cost of funds, or whether, after paying the interest on its debt, it's managing to make any profit at all.


OK. Fair enough point. However, if your company's expected profit margin is over 70%, it's a decent bet, unless you've secured a payday loan for the $1.16 billion, you're still making serious cash.


But this ignores the whole point of doing the deal in the first place: that the city was politically incapable of raising the parking-meter rate itself.


What?!? Excuse me?


It was the city council that passed the ordinance that spelled out the specifics of the meter rate increases. CPM and LAZ don't control the rates. The city still controls parking meter rates. They could change them back to 25 cents per hour if they wanted to. Of course there would be a severe penalty but that's besides the point.


In fact, from every report I've read and every city hall insider I've spoken to, all 50 alderman, a full year after the deal was signed, are still receiving holy hell for the rate increases from their constituents.


Salmon goes on to contend that because the city's consultant (William Blair) told the administration it could get between $650 million to $1.2 billion for the meter system, and they ultimately got the top end of that range, the deal was a good one.


Of course, Salmon must have missed Mick Dumke's and Ben Jorvasky's Reader piece that showed it was Blair that came to the Daley Administration with the idea for this deal. Blair can hardly be considered objective when they present the deal, consult on the deal and then push for the deal to be accepted so they can make their monstrous sales commission.


Dude. Let me ask you this. If you went to a doctor that said you only had three months to live, would you just believe them, curl up and die? Or would you get a second opinion?


In this case, wouldn't it have been prudent if the city sought a second or even a third valuation opinion for a deal as large as this?


It's called due diligence.


And Salmon, of course ignores all the other contrary estimates (Chicago Inspector General, Prof. Woods Bowman, Ald. Waguespack) of the deal that show, at a minimum, the city could have received $400 million more, if not billions more in some estimates.


However, even though the cons far outweigh the pros on this deal, you could debate this valuation issue for the life of the lease and never reach consensus.


Salmon, of course without really understanding or knowing the full story, doesn't know or ignores how little time was given to the city council and the public to weigh in on this deal before it was up for a vote.


Even if we assume $1.16 billion is a great deal for the city. 48-72 hours to look over, debate and discuss and a deal of this magnitude is wayyyyy too short of time.  When democracy so blatantly suffers in a case like this, the true value of the deal is irrelevant because by definition, it's a bad deal.


So next time Mr. Salmon, it might be best to think before you speak--at least on this subject.

Recommended

[?]

Recent Posts

Subscribe

1 Comment

dude said:

user-pic

Mr. Geek you can borrow my baseball bat to give Mr. Salmon a tuneup.

Leave a Comment?

Some HTML is permitted: a, strong, em

What your comment will look like:

said:

what will you say?

Related Topics

Most Active Pages Right Now

ChicagoNow.com on Facebook