City Council leaders have brokered a deal that could pave the way for approval of a New York investment firm to acquire Chicago’s parking meters for $2.5 billion, in exchange for a host of lucrative benefits for the city and motorists.
Former Mayor Rahm Emanuel once tweaked Chicago’s widely despised parking meter deal with a free Sunday parking provision that, as he put it, made “lemonade out of lemons.”
The agreement quietly brokered with New York-based Stonepeak Partners by some of the same alderpersons who led the budget rebellion against Mayor Brandon Johnson’s corporate head tax makes Emanuel’s compromise pale by comparison.
It includes tangible benefits that could chip away at the city’s $882 million budget gap and create a new revenue stream that would benefit the city for years to come.
Included in the deal is a proposed profit-sharing arrangement equal to 5% of net income received by Stonepeak and its operating entity, Chicago Parking Meters LLC. That is expected to produce $376.2 million for the city over the course of the agreement, which expires in 2083. That larger payment will also be earmarked for underfunded city pensions.
The city’s Law Department provided technical assistance to the five-member City Council negotiating team. Aside from that, however, the mayor was a bystander.
“I wouldn’t say it evens the playing field. An even playing field would be — we would still have the asset. But that is not the reality of the situation. So we are making lemonade out of lemons,” Finance Committee Chair and 3rd Ward Ald. Pat Dowell told the Chicago Sun-Times.
“It’s a much better deal for the city and for taxpayers. Several elements of the proposal did not exist in the previous proposal. Things like profit-sharing and transfer fees. Collecting revenue when they overcharge us. We were able to increase the amount of time that we get to look at a transfer in the future if it happens. Getting them to focus on electric vehicle charging, then being able to split that revenue with the company,” Dowell said.
Johnson submitted a $3.2 billion bid to take back Chicago parking meters, only to abandon it after determining the risk of undoing the parking meter deal Chicagoans love to hate was not worth the reward, either financially or politically.
The mayor then threw the hot potato to the City Council without providing any guidance about Stonepeak’s bid.
“We didn’t go around him. Remember, he said the responsibility for approving or disapproving the sale was within the City Council’s hands,” Dowell said Tuesday. “So we took the bull by the horns and did the work.”
If and when the deal closes, Stonepeak has agreed to pay the city a $75 million transfer fee earmarked for city employee pension funds hovering dangerously close to insolvency. If Stonepeak ever sells the meters to another buyer, Chicago would receive an additional transfer fee of 2% of the sale price — also earmarked for pensions.
The proposal also includes changes to the portion of the lopsided parking meter deal that requires the city to compensate Chicago Parking Meters LLC for every parking space taken out of service either for a special event or construction project. Chicago Parking Meters LLC is the private investment consortium formed by Morgan Stanley, Allianz and Sovereign Wealth Fund of Abu Dhabi.
A “temporary event closure” plan would allow for seven city events each year, and the “hourly threshold for closure payments” from the city would increase from six hours to ten hours.
And if true-up payments are due, they would be made to Chicago Parking Meters from “available settlement credits” or from “convenience fee or reserve meter revenues” that don’t drain city coffers.
The City Council’s Latino Caucus united in opposition to Stonepeak because of the company’s 2025 acquisition of Omni Air International, which has provided long haul deportation flights for the Department of Homeland Security during President Donald Trump’s deportation campaign.
To appease Hispanic alderpersons, Stonepeak committed to selling Omni Air International and said it would confirm the sale with a “certified document following federal approvals.”
Entire nonmetered city blocks could be designated as sites for electric vehicle charging stations, with charging revenues shared with the city.
The parking meters deal occurred under Mayor Richard M. Daley, who leased the city’s 36,000 parking meters for 75 years to a private consortium for $1.15 billion. He used those proceeds to avoid raising property taxes at a time when city employee pension funds were sinking deeper in the hole. The deal became a political nightmare for later mayors, and for the City Council members who gave it lightning-fast approval.
Former Finance Chair Scott Waguespack (32nd) cast one of only five “no” votes against the original, lopsided parking meter deal. He has long said there was virtually no chance to change what he called the “ironclad” deal that already has allowed private investors from as far away as Abu Dhabi to nearly double their $1.15 billion outlay with 57 years to go on the original deal.
But Waguespack told the Sun-Times he was thrilled to be proven wrong after being tapped as one of five alderpersons to lead the talks.
“For the first time in the [history] of this contract, we’ve been able to break it open and negotiate some pieces that I would have never thought we were able to before,” Waguespack said. “We’ve come up with a deal that not only is great for taxpayers; it will set the tone for future deals.”
Waguespack stressed the profit-sharing windfall must be earmarked for pension costs, and said that guarantee would be built into the ordinance.
“The one thing we don’t want is for aldermen to think this is something where everybody can just reach in and take what they want,” Waguespack said. “This goes directly to reducing the burden on taxpayers by putting it into the pensions.”
Johnson played no role in the negotiations. He was briefed Friday on the compromise.
During a news conference Tuesday, the mayor welcomed the apparent financial benefits, but stopped short of recommending City Council approval.
“It was my responsibility to make sure that I created at least a framework of what was possible,” Johnson said. “There were some people who didn’t believe that we could have a package that provided a much better deal for taxpayers. This was a horrible deal. We know that. Previous administrations have attempted to find a pathway and were not able to.”