Parking, parking, parking -- Chicago | A rare opportunity to reverse a really bad decision

Parking meter sign in Chicago.

In the pre Trump days the line was that "social security is the third rail of politics," that you try to mess with it you get burned.  Locally, I joke the issue is parking.

Chicago has lots of structural deficit issues, primarily a massive pension liability, and over the years the young Daley Administration in particular the choice as to employ stratagems to fix massive budget deficits. 

The biggest was to sell off, well lease off, parking meters for 99 years.  The contract is onerous, requiring the city to pay the concessionaire for closed streets, like for festivals, or taking out parking spaces for bike share stations or to add to the public space.  From the Bloomberg article "Morgan Stanley’s $2.5 Billion Parking-Meter Sale Roils Chicago Council":

For almost two decades, Chicago has been stewing over a $1.15 billion deal to Chicago Parking Meters, LLC Selected as Winning Bidder for the 36,000 parking meters to an investor group led by Morgan Stanley. Now, with the meters set to change hands, the city council is seizing on an opening to push back.

The original purchasers have already made their money back and then some, and look to sell of the next 57 years of the concession for $2.53 billion.  Mayor Johnson put in a bid to buy it back, but for some reason he backed off ("Mayor Johnson finally explains his decision to bid $3.2B for parking meters before walking away," Chicago Sun-Times).

The City Council has to approve the transfer, and they are looking for concessions.  Meanwhile,  Alderman Jason Ervin proposed the creation of a public infrastructure trust/bank funded by the city's pension funds, to buy back the contract and to make other public infrastructure investments ("We should vote no on the parking meter transfer for the sake of a better investment policy," Chicago Tribune).

That's actually a good idea.  

North Dakota's State Bank ("The ‘Secret Sauce’?: Understanding the Success of the State Bank Of North Dakota," Government Finance Research Center, UIC) and the Quebec Pension Fund, CDPQ--Caisse de dépôt et placement du Québec, have been successful at intra-state/province investment.  

The pension fund is building the REM transit system in Montreal--but they got a super sweet deal from the Province that's as outrageous as the concessions made on the original parking contract in Chicago.

The REM in Montreal launched its second section earlier this year.  People really ride it.

I worry some about these kinds of set ups because while they need accountability and transparency mechanisms, at the same time there needs to be a hard wall against political meddling.  

E.g., you don't want Aldermen able to force through loans, the way they have veto power over development within their wards?  

Or, when the US Government gave a massive loan to GM during the Great Financial Crisis, local dealers under threat from consolidation called their Congressional representatives to lobby to keep their franchise.  Etc.

Chicago's track record on infrastructure doesn't make me hopeful they can make the turn from a corrupt orientation to an above board infrastructure bank, but I'm hopeful.  E.g., when Norway created its Sovereign Investment Fund, it drew upon the experience with Mideastern states, oil revenues, and investments with the aim of yielding real investment rather than wasting the money ("Stop Calling All Wealth Funds Sovereign: Father of Norway’s Fund," Bloomberg).

Maybe Chicago should hire people from Norway to run their bank...

To me, they shouldn't have sold off the parking meter concession to begin with.  And it's rare to be given the opportunity to reverse such a bad decision.