Wednesday, August 19, 2009
Politics / Clout City / News IVI-IPO Sues the City Over the Parking Meter Deal
Posted by Mick Dumke on Wed, Aug 19, 2009 at 1:19 PM
The parking meter privatization mess may not be settled yet.
The Independent Voters of Illinois-Independent Precinct Organization sued the city of Chicago this morning, charging that because of the meter deal taxpayer money is illegally being used to benefit a private company, Chicago Parking Meters LLC.
The suit also alleges that the city violated state law by stripping future City Councils of the ability to manage the public right of way and by delegating police powers—the ability to write parking tickets—to LAZ Parking, the private firm hired to oversee day to day operations of the meter system.
In addition, it argues that the state of Illinois should not be able to use public money to revoke anyone’s driving privileges stemming from Chicago meter violations. You can read a PDF of the full complaint here.
“The Concession Agreement has obligated and continues to obligate the City to expend public funds in order to police, enforce and maintain the privately-held and privately-controlled parking meter system,” the suit says. Under state law, it argues, the “right to regulate the use of the streets does not grant the City of Chicago with authority to lease parts, or all, of a public street.”
Clint Krislov, one of the attorney representing the IVI-IPO, says the group wants to have the deal reworked or nullified. “What we are seeking is to enjoin the expenditure of public funds in connection with the agreement, unless or until the deal is reformed.”
Krislov credited the Reader for leading the way in looking into the deal and said he'd consulted documents we'd acquired from the city and posted online.
My calls to the city’s finance and law departments were not returned right away, but as public outrage has grown since the agreement was consummated last December, Daley administration officials have continued to assert that it was a good deal for taxpayers that helped the city avoid even more dramatic budget problems than it already has.
And city lawyers have said that killing the deal is practically impossible, since it doesn’t include a termination clause. “We’d have to negotiate it,” assistant corporation counsel Jim McDonald told aldermen in a hearing last month—and from a position of weakness. Chicago Parking Meters would almost certainly demand more than the money it paid the city for control of the system in the first place.
Plus, the city’s already spent a good chunk of the cash.
Meanwhile, as I reported last week, aldermen still haven’t received all the information they've requested from the administration about how the deal was put together in 2007 and 2008.
UPDATE: Law department spokesperson Jennifer Hoyle says the city has not yet been served with the lawsuit though they have obtained a copy and have determined that they will fight it aggressively as it's without merit.
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"...city lawyers have said that killing the deal is practically impossible, since it doesn’t include a termination clause."
It's not that there's no termination clause, it's that the termination clauses are astonishingly favorable to Chicago Parking Meters LLC and unfavorable to the City.
CPM has an option to terminate under certain conditions, see Article 14: Adverse Actions, pp. 93-98.
The City can pursue a default, see Article 16: Defaults, pp. 101-103. The City has to give notice of failure to CPM, which triggers a 90-day curative period. If the failure is not resolved in the 90 days, we're not done yet, CPM then has 30 more days to produce a work plan to address the failure. The period the work plan itself may take is unspecified.
So, yeah, the City killing the deal is practically impossible, we're pretty much screwed.
http://www.chicagoreader.com/old-blog-medi…
Repeat after me, "Down with the king." As Dan Savage so wisely says, "DTMFA."
Yes, the express clauses are bad for citizens and good for LAZ. But what if the City never had the authority to enter into the deal at all? That would make the whole thing - including the termination clauses - invalid.
The favorable clause is not only for LAZ but it's also for Richard M. Daley's brother's company Chase. Did you consider Daley left $1 to $3 billion dollars on the negotiating table because the Mayor's brother and his company stand to make more money?
I just heard this new video and song. The Clout Meisters http://www.youtube.com/watch?v=gEWml3t8mCo&feature=player_embedded was on channel two news last night. Rock on! The Clout Meisters on u-tube
http://cbs2chicago.com/video/?id=61782@wbbm.dayport.com Watch this video on the the Clout Meisters City workers fight back. Channel two news got this right.
This is the best news I have heard all day. Finally someone is taking some action against this sell out of the public property by the City. the only thing I would add is that the bank behind this deal is Morgan Stanley, a bank that got billions in TARP funds when it was in trouble . It really irritates me that after they were bailed out they were able to do this deal and raise the rates for the taxpayers who helped them out.
My suggested solution is to rescind the contract and turn the $1.2 billion payment into a 75 loan from MS to the City at zero interest.
State court, which I found strange. Seems like political considerations come into federal court a little bit less.
since the only reason someone puts money in a parking meter is fear of a costly ticket can not the city lower the ticket fine to one dollar. then few would put money in the meters and chicago parking meters would be more than happy to terminate.
Lease or sale?
The concession agreement specifies that the City transfer our parking meters to CPM by bill of sale. See page 29:
"Section 2.1. Grant of Concession. Upon the terms and subject to the conditions of this agreement, effective at the time of closing ... the City shall ... assign, transfer and otherwise convey to the Concessionaire by bill of sale the Metered Parking System Assets, free and clear of any Encumberances..."
http://www.chicagoreader.com/old-blog-medi…
If no one payed the meters or the parking tickets issued for not paying the meters, then we wouldn't be screwed. We would have the upper hand! Just don't pay them until the city admits they were in the wrong.
Good points, all. Hugh: Yes, the city can terminate the contract if Chicago Parking Meters has failed to fulfill its duties. It can't unilaterally kill the thing without negotiating a settlement.
Re-reading the concession agreement in the light of the complaint and the Chicago Tonight "debate", I am not a lawyer, but:
It's not a lease, we have to stop calling it the "parking meter lease deal", and we inadvertently pick up the city's spin when we call it that. The City wants us to think this is more of the same, just like the Skyway or the Millennium Park garages. It's not.
We are SELLING our parking meters to CPM, and granting them a CONCESSION to operate their private, for-profit business in our streets and on our sidewalks. It's a concession agreement.
Formally, the parking meter deal is closer to another deal the Reader has been tracking, the Park Grill deal, than it is to the Skyway or garage deals. I wonder what property taxes CPM will pay?
Not so much recently, but in previous years at music fests like Blues and Jazz and Taste, the Chicago Police (and I don't mean the SSA rent-a-cops) used to cordon off the Great Lawn in front of the Petrillo band shell, inspecting coolers, and then patrol the lawn and confiscate them if anyone managed to smuggle in a few brewskies. It bothered me that my home town's police force was making double time working for the beer concessionaires.
Please change your article tag "parking meters lease deal" to "parking meters deal" or "parking meters sale" or "parking meters concession deal" or 'parking meters scam."
Much thanks to Ben Joravsky and Mick Dumke for all their excellent investigative journalism, and to the Independent Voters of Illinois-Independent Precinct Organization (IVI-IPO) for their lawsuit. I'm becoming a member today...
http://www.iviipo.org/membership.html
http://www.iviipo.org/
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