Arabian Post Staff -Dubai
Aldermen voted 46-3 on Tuesday to authorise Stonepeak, a New York-based infrastructure investment firm, to acquire Chicago Parking Meters LLC, which controls the city’s metered street-parking system under a 75-year concession signed in 2008. The approval came one day before a September 30 deadline that could have exposed the city to arbitration and litigation if the transfer were rejected.
The vote followed negotiations that secured additional financial and operating concessions for Chicago. Under the revised arrangement, the city will receive a $75 million transfer payment when the transaction closes, along with 5% of the parking operation’s net income and 2% of the sale price if Stonepeak sells the concession again before it expires in 2084.
The $75 million payment is expected to be directed to city employee pension funds. Council negotiators also obtained changes intended to reduce compensation Chicago must pay when metered spaces are removed from service for street closures and special events.
Chicago will be permitted to hold seven special events each year that take meters out of service for as long as 10 hours without compensating the concessionaire. Existing provisions have required the city to make so-called true-up payments when parking spaces become unavailable. Such payments had cost Chicago nearly $174 million through 2025.
Finance Committee chair Pat Dowell and other council members negotiated the revisions after resistance to Stonepeak’s proposed purchase delayed approval during the summer. The Finance Committee endorsed the amended transaction last week, setting up the final council vote.
The transfer became politically contentious partly because Mayor Brandon Johnson’s administration had explored buying back the concession. The city submitted bids reaching about $3.2 billion before abandoning the effort after concluding that taking back the system posed substantial financial risks. Council members said they had not been fully informed while those bids were being developed, adding to tensions between the mayor’s office and aldermen.
Stonepeak’s $2.53 billion offer emerged after Chicago withdrew. Because the city is not the seller, the purchase price will go to the existing owners rather than the municipal government. Chicago’s leverage arose from provisions requiring municipal consent to a change in ownership of the concessionaire.
Chicago Parking Meters LLC includes investors led by Morgan Stanley, along with Allianz Capital Partners and an Abu Dhabi sovereign wealth investor. The group acquired the concession for $1.15 billion in 2008, when the administration of then-Mayor Richard M. Daley transferred control of roughly 36,000 metered spaces for 75 years.
The original transaction has remained controversial because meter rates increased and the city assumed obligations to compensate the operator when spaces were taken out of service. The upfront proceeds were also spent down over subsequent years, while the concession continued generating revenue for its private owners.
The pending transfer gave aldermen an opportunity to renegotiate some conditions without reopening the underlying 75-year agreement. Council negotiators estimated that the package of new benefits could be worth hundreds of millions of dollars over the concession’s remaining life, although some aldermen questioned assumptions behind that estimate, including the treatment of interest and depreciation.
Three aldermen — Byron Sigcho-Lopez, Jason Ervin and William Hall — voted against the transaction. Ervin argued that the city was accepting too little in exchange for its consent, while Hall raised concerns about the participation of Black-owned firms in professional-services contracts connected with the acquisition.
Another issue during negotiations involved Stonepeak’s ownership of Air Transport Services Group, whose Omni Air International subsidiary had provided long-haul deportation flights for the US Department of Homeland Security. Stonepeak agreed that Omni would be sold, and Air Transport Services Group announced on Monday that the airline had been transferred to OAI Holdings LLC.
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