The most popular deals in the works are metered municipal street and garage parking spaces. One of the first was in Chicago where the city received $1.16 billion in 2008 to allow a consortium led by Morgan Stanley to run more than 36,000 metered parking spaces for 75 years. The city continues to set the rules and rates for the meters and collects parking fines. But the investors keep the revenues, which this year will more than triple the $20 million the city was collecting, according to credit rating firms.
After the deal, some drivers complained about price increases as well as meter malfunctions caused by the overwhelming number of quarters that suddenly were required.
Based on the new rates, the inspector general claimed the city was short-changed by about $1 billion.
"The investors will make their money back in 20 years and we are stuck for 50 more years making zero dollars," says Scott Waguespack, an alderman who voted against the lease. A spokeswoman for Morgan Stanley declined to comment.
But if it turns out to be a bad deal, it can be fixed, right? Nope:
...if a city wants to use a parking lot property for something else years down the road, it can't--the city is typically locked into parking for the lease's life unless it compensates the new operator for the long term revenue loss.
In Pittsburgh, the mayor is proposing to lease out the parking system for an upfront sum of about $300 million over 50 years and funnel the money into the pension system.
Bill Peduto, a city councilman, is fighting the plan. The spaces generate $35 million annually, and considering that the concessionaires are proposing doubling rates, he says, the city will ultimately lose $3.5 billion over the life of the lease.
"Even with the money from a sale, we'll have to put another $17 million annually into the pension fund--and we don't have that," Mr. Peduto says. He prefers raising parking rates slightly and floating a bond to stabilize the pension fund.
So why are municipalities making these awful deals? Desperation:
"We view these asset sales as 1-shots...that create structural budget imbalances in future years, but that may be necessary actions to bridge the time gap until revenue stabilization or growth returns," says Robert Kurtter, a managing director at Moody's.
The California legislature recently released a report by its analyst's office entitled "Should the State Sell its Office Buildings?" California originally bought office buildings to save money, the report says. The cost of leasing them back "would exceed sales revenue," it said, making the sales "poor fiscal policy."
But "in the current budget environment," it added, such deals are necessary to balance the budget.
These motherfuckers are just picking over the carcass. Some federal aid right about now would be really helpful. And I told you these budget shortfalls would happen over two years ago.
Nobody ever listens to the Mad Biologist...
Ah yes, we have those fake parking meters in a private shopping center that looks exactly like a public street right here in Nashville. I wrote about it here, prompting all sorts of comments from Libertarian types who accused me of hypocrisy because I object to fake parking meters where the money allegedly goes to a charity I may or may not support but I have no probelm with THEIR TAX MONEY ZOMG ZOMG ZOMG!!!! paying some welfare queen to sit at home and eat Doritos on the big screen TV when she could be out working hard like THEY do.
Sadly I lost most of those comments when I switched commenting programs but you would have enjoyed reading them.
While it's true you don't have to pay to park, the meters look EXACTLY like the city ones, and it's only if you read the very teeny tiny fine print do you realize that your contribution is "voluntary," not to avoid getting ticketed. I can't tell you how many harried housewives I see fishing in their handbags for a quarter to feed the machine. When I tell them these are fake parking meters not real ones they are astonished.
This is just a small part of my whole issue with these private-but-look-public developments, which are the new trend in shopping center development. It's eroding the fabric of public space. It just so happens that one of the anchor tenants in the Nashville development is Whole Foods. Say people wanted to protest in front of Whole Foods for some reason, say their CEO's stance against healthcare reform last summer. Well, these may look like public sidewalks but they are not. You do not have the same rights on this privately owned space as you do on publicly owned space. You do not have the right to free speech and to picket Whole Foods or any other establishment in this development.
When I tell people about this (including my city councilman) they look at me like I'm some radical. But really this is exactly the kind of thing those Teanuts are going to find slapping them on the ass in a few years. Suddenly the corporate entities they've devoted so much time to empowering are going to be on the other side of a particular issue and they will find themselves suddenly without the rights they thought they had. And by then it will be too late.
First they came for the liberals, and I wasn't a liberal so I said nothing .... you get the picture.
Got a mate who loves the fact that the westfield shopping centre carpark is privately owned. You can park anywhere. Want to park a trailer and take up four spaces? Do it! It's not illegal - you are not on a public street. Their only option is to sue you privately - like that's going to happen.