"Chicago drivers will pay a Morgan Stanley-led partnership at least $11.6 billion to park at city meters over the next 75 years, 10 times what Mayor Richard Daley got when he leased the system to investors in 2008."
Privatizing the parking meters in Chicago's been great for Morgan Stanley. But what about for Chicago?
Well - we signed over a lucrative franchise for BILLIONS less than it appears to be worth.
Morgan Stanley and its partners seem poised to reap phenomenal profits from this deal. Again, from the Bloomberg story:
"Morgan Stanley, Abu Dhabi Investment Authority and Allianz Capital Partners may earn a profit of $9.58 billion before interest, taxes and depreciation, according to documents for a $500 million private note sale by their Chicago Parking Meters LLC venture. That is equivalent to 80 cents per dollar of projected revenue
That's one HELL of a return! Wish I had access to investments like that!
Parking meter costs skyrocketed almost immediately after Mayor Daley shoved the deal through with no time for the aldermen to consider it. Now today, as a result of privatization, we pay more in Chicago to park at a meter than the Morgan Stanley bankers will pay to park in NYC. From the article:
"Morgan Stanley’s partnership raised parking rates twice since the lease began, and more are planned, the debt document says. Fees at some central business district meters rose to $4.25 an hour from $3 since January 2009 and will go to $6.25 in 2013. In midtown Manhattan, hourly rates are as much as $2.50, according to the New York City Department of Transportation."
The dubious deal gives Morgan Stanley the profit, and the people who pay to park in Chicago the shaft. Business as usual when an investment bank is involved.