Three City Council leaders who negotiated the compromise that sweetened Stonepeak Partners’ $2.53 billion deal to acquire Chicago’s parking meters are calling a special City Council meeting Monday to take action that could blow a $75 million hole in Mayor Brandon Johnson’s tax-heavy budget.
Finance chair and 3rd Ward Ald. Pat Dowell, Ald. Scott Waguespack (32nd), who preceded Dowell as Finance chair, and Ald. Nicole Lee (11th) want to compel Johnson to use the $75 million up-front payment from Stonepeak they negotiated without the mayor’s help to be applied to the 2026 city budget as an extra payment that chips away at the city’s $36 billion pension crisis.
Without consulting the Council, Johnson decided to use the $75 million windfall to help defray the cost of the $363 million pension advance for 2027. That’s not what the Council intended, nor was it required by the ordinance, which passed 46-3.
That ordinance stated the up-front payment the city received when Stonepeak closed the deal last week — as well as profit-sharing going forward — would be earmarked for pension payments and specifically allocated at the Council’s discretion.
“Our goal was always to use this money to reduce our pension liability — not to maintain a steady level,” Dowell told the Chicago Sun-Times Tuesday.
“We have to start somewhere. … Every year, most of our property tax … goes toward pensions. This helps to reduce that liability for taxpayers. … If we just wanted the money to be used any old way, we would have been silent on that in the ordinance we passed in September and allowed those dollars to go into the general fund.”
Lee added, “The earlier you can make credit card payments, the better off you are in the long run.”
If the Council approves the ordinance, it would create a $75 million gap in Johnson’s proposed $17.6 billion budget, which is already tenuously balanced with $480 million in borrowing to cover police settlements and $664.2 million in new and increased taxes. Anti-administration alderpersons also have threatened to reject Johnson’s corporate head tax for a second straight year.
Asked how the $75 million gap would be filled, Dowell said: “That’s not my problem. It’s on him to come up with the $75 million.
“Hopefully, this is a collaborative effort and we can figure this out together. But this is what happens when the communication breaks down.
“He took the right from the Council to determine how the [up-front] payment would be allocated by just placing it in the budget the way he wanted to do it. He had nothing to do with [sweetening the parking meter deal]. And we were not given any indication except through the budget that his intent was to use this money in this manner. There was no conversation.”
Lee agreed “the mayor’s got to figure out” how to plug the $75 million gap if the up-front payment from Stonepeak is not made available to use toward next year’s pension advance.
“It’s clear in the legislation we passed for the parking meter deal that the City Council would decide that. We negotiated the transfer,” Lee said. “This is just a pattern of his. We have not been super-engaged in the process on many things. … I can’t say that I have a bad relationship with the mayor. But it’s not an ongoing dialogue.”
Last month, the Council gave final approval to New York investment firm Stonepeak Partners’ $2.53 billion bid to acquire Chicago parking meters after a negotiating team led by Dowell, Lee and Waguespack brokered a compromise to sweeten the deal for the city.
It calls for the city to receive a $75 million transfer fee at closing, 5% of net income going forward and 2% of the sale price if and when the meters are sold again before the deal ends in 2084. The compromise also reduces costly compensation the city is required to pay for every space taken out of service.
Those “true-up payments” cost the city nearly $174 million through 2025.
Johnson said Tuesday that the deal gave the city “the option” to use the $75 million “in a variety of ways.”
“If the City Council uses it differently, certainly … they have prerogative to do that,” the mayor said.
But, the mayor tried to shift responsibility for filling the $75 million hole to the Council leaders whom he believes would be responsible for creating that gap.
“I appropriate the $75 million to go towards paying our pensions,” he said. “If the City Council decides to use their authority to put an additional $75 million on top of the supplemental payment, again that is their prerogative. In terms of what they will do to find another $75 million — look, we’re talking to alders every single day. What we saw last year was obviously incomplete. We do not want to go down that road again.”