A little more than a year after it came up the last time, the city is again publicly mulling the idea of privatizing its parking meters. As the Wall Street Journal reports, nothing has been decided on, and the idea is still in the very early stages, but it is something that is definitely being talked about. On the plus side, City Hall seems aware of trying to not make the same very costly mistakes Chicago has.
In 2008 the Windy City sold off a 75-year lease on its entire meter system to an investment group for a $1.1 billion lump sum, and have been suffering for it ever since. Just this month Chicago Parking Meters LLC sent the city a $14 million bill for "fees they say are owed for street closures, repairs, festivals and other city-sponsored activities." And that is something we just do not need here.
To that end, NYC is reportedly looking at different models, specifically ones that would allow the city to continue to control the rates at the thousands of metered parking spaces in the city (as of 2010 there were 31,725 muni-meters in town and 50,150 single space meters). Plus, we aren't looking to close a budget gap with a lump payment, as Chicago was when it made its deal with the devil.
"We're not looking to sell out the system, which some people have done and which I don't understand at all," [Deputy Mayor Robert] Steel said. "Our process has been to consider locking in the current performance, and, if it makes sense, transferring the risk to a third party."
New York hired the investment banking firm Greenhill Partners & Co. last summer to advise the city on two potential public-private transactions. One was abandoned, but Greenhill is continuing to explore how the city can privatize meters without giving up control of its streets.
Under one scenario, the vendor would operate the meters in exchange for a percentage of the money they generate.
We don't really understand why—if the city would still be setting meter rates and handling ticketing—sharing the profits with a third-party is a good idea. Last year meters made about $149 million. But we guess that is why the city is not looking for proposals right now, but for qualifications.
