The City Council now has until Sept. 30 to either approve a New York investment firm’s $2.53 billion bid to acquire Chicago parking meters or risk a lawsuit by the current owner that has more than recouped its initial investment with 57 years remaining on the deal.
Finance Committee Chair Pat Dowell (3rd) told her colleagues late Wednesday she was informed that the revised July 24 deadline had been extended for nine weeks by Mark Rotatori, a partner at Jones Day, the law firm retained by the Law Department to advise the City Council on the offer from Stonepeak Partners.
It’s the second time that Chicago Parking Meters LLC, a consortium that includes Morgan Stanley, Allianz Capital Partners and the Sovereign Wealth Fund of Abu Dhabi, has agreed to extend the deadline to approve its proposal to sell the 57 years remaining on the 75-year lease to Stonepeak Partners. The original deadline was June 30 and was extended until July 24.
It’s not clear whether the renewed flexibility came from the seller, the owners or both.
Asked at a June 25 Finance Committee hearing what would happen if the deadline was not met or if the City Council rejected the sale, James Wyper, senior managing director for Stonepeak Partners, told committee members, “You’ll never see me again. We get all the money. I’m going. It’s OK. What Morgan Stanley and the existing ownership group choose to do does not involve me at all. They’ll probably sue you.”
Former U.S. Attorney Dan Webb, an attorney representing the current owner, could not be reached for comment.
In a July 3 letter to Mayor Brandon Johnson, Dowell warned that the proposal by Chicago Parking Meters LLC to unload the parking meter deal “has not secured the support necessary to advance from committee at this time.”
“Significant questions remain regarding Stonepeak’s ownership structure, regulatory and legal history, operational practices and the potential implications of this transfer for the city of Chicago as outlined in the June 11 Chicago City Council Position letter to Stonepeak” signed by 15 City Council members, Dowell wrote.
“These are fundamental considerations for any legislative body asked to approve the transfer of a public asset of this magnitude.”
To avoid almost certain defeat, Dowell postponed a showdown vote at Monday’s Finance Committee meeting.
The extension until Sept. 30 buys more time for Budget Committee Chair Jason Ervin (28th), Johnson’s most powerful City Council ally, to push his long-shot alternative plan.
Ervin wants to to create a public infrastructure trust similar to the one created, then abandoned by former Mayor Rahm Emanuel to acquire the parking meters, using a mix of investments by the four city employee pension funds and municipal bonds.
“That was then. This is now. We have a meaningful asset that can be utilized and it also potentially strengthens our pension funds and it works to bring that value back to Chicagoans — not let the money go halfway around the world,” Ervin told the Sun-Times this week. “Other pension funds are investing in this. Why wouldn’t we afford that same opportunity to our four pension funds in the city of Chicago?”
Johnson ultimately abandoned his $3.2 billion bid to take back Chicago parking meters after determining that the risk of undoing the parking meter deal was not worth the reward — either financially or politically.
It would have required pledging to siphon other major sources of revenue the city depends on “if parking habits shifted, alternative modes of transportation become more common” and “driver/commuter behaviors” changed.
That’s a possibility amid a fast-changing landscape for parking demand that includes everything from self-driving vehicles and robot deliveries to congestion fees that discourage people from driving Downtown.
Against that backdrop, Ervin was asked Monday to explain how he would bankroll the proposed Infrastructure trust purchase.
“There would definitely need to be some financing done by the city. … Looking at all options, that would probably include pension obligation bonds, general obligation bonds. Even maybe some revenue bonds along TIF and other things,” Ervin said. “It’s just an opportunity that we need to explore — we need to look at — and not let this opportunity pass us by.”
Johnson said he appreciated Ervin’s creative thinking. But during an appearance Thursday on the WBEZ program “Ask the Mayor,” Johnson again refused to say whether the City Council should accept or reject Stonepeak’s offer to purchase the meter system for $700 million less than the city’s “last, best” offer.
“The authority rests solely with the City Council. That is their decision,” the mayor said.