San Francisco may have the most technologically nifty new parking system in the U.S., but Chicago wins big points for the mercenary genius of their approach: the city expects to raise over a billion dollars by auctioning a 50-year concession on their entire parking system.
Private vendors are willing to pay so much for the right to manage the city's 36,000 parking spaces because they know the real estate is presently underpriced. The winning bidder will be required to install "state-of-the-art parking meters that monitor parking space availability and adjust rates to ensure an open space on every block." The new system should reduce congestion, lower greenhouse gas emissions, improve air quality, and generally make the city more livable. It will also mint a good deal of cash for both the vendor and the city government.
Such public-private partnerships can be controversial. Some object to the very idea of public goods in private hands. Others worry that corporations suffer from a lack of accountability to voters.
Which, in some ways, is the point. Drivers are a powerful voting bloc, and city officials have generally been unwilling to cross them. Particularly if some of that billion-dollar windfall finds its way to public transit projects, the deal will likely work out well for Chicagoans.
Technically, parking spaces are as far as you can get from being [public goods](http://en.wikipedia.org/wiki/Public_good).
Not sure if it's a smart move for the city or not, but I love the pricing model. Now we need to get them to start charging to drive during rush hour!
Businesses would need to subsidize (validate) parking which would just wind-up being a tax on businesses with a middle-person contractor taking their cut.
Andrew -- ha, good point! Parking is hardly a public good. I should have said, "Some object to the very idea of public infrastructure in private hands."
fkskfs -- doesn't validated parking typically happen in private lots, which wouldn't be subject to the agreement? But you do point up a larger issue, which is that businesses get skittish about any changes that they fear could affect store traffic. Although these fears seem to be mostly unfounded, it does make political sense to ensure that some revenue is used in ways that directly benefit affected neighborhoods.
Outsource parking to raise more money? $1B sounds like a lot of money, but that works out to $20M/year over 50 years. How much does the city collect now?
There's little doubt the private sector works more efficiently than the public sector. If the bidding process is transparent, I'm all in favor. But this is Chicago, so Daley and Blago buddies always have an upper hand.
That being said, it's about time we begin to shift taxes. Why continue to penalize those who don't pollute (walkers, bikers, metra/cta riders) yet breathe and subsidize those who do (cars, fossil fuel business and industrial business)?
$ for capital spending on the public transportation system is long over due. and the general public is the winner.
Hi Tim --
According to the article, the city made $23 million from meters in 2007. But money has a time value. If you assume even a very low cost of capital for the city, that revenue stream is only worth about half a billion. So the city is roughly doubling the value it presently gets from meters.
Not that this takes away from your point about having a fair bidding process, but a billion dollars does seem to be a reasonable number.