Don't Take the Deal | Chicago Parking Meters
We’re back, mere days after the release of our latest episode, all about the terrible deal Chicago made to privatize its parking meters.
We honestly didn’t expect to make a full video about this. It was supposed to be 10 minutes, in and out. A brisk explainer. But the more we learned about it, the longer it got, and time makes fools of us all, because somehow this is now our longest video ever.
In our defense, it really was a terrible, terrible deal. And, as always, we had more interesting things to share than we could fit in our episode – so you also get this jam-packed newsletter.
And, of course, this is quite possibly the only newsletter in the world to put an unsubscribe button this high in the scroll. Use it, if you really need to (you have to click the button, then find the UNSUBSCRIBE on your account page):
And maybe you haven’t even watched the video yet? Big mistake, Jackson! Luckily, you can check it out right here, inside the newsletter:
And now that you’ve watched the whole thing, we’ll take a moment to say thanks to our British collaborators, Stand-up Maths. We couldn’t have made this episode without them, and we have to believe they’d say the same thing about their wonderful companion video, which dives even deeper into the mathematics behind this awful deal. And while you’re over there, check out some of their other videos!
And now? We scroll.
The Deal of One Entire Lifetime
If you ever:
Find yourself at a conference table.
Look across the table and see representatives from a famous and powerful bank.
And then see that those bank representatives are really excited about a deal they just offered you.
Then you should:
WALK AWAY. Leave. DO NOT SIGN THE DEAL. Go home and fuck around with some dinner. NEVER TALK TO THEM AGAIN.
Because whether they’re fighting regulation or blasting people in debt with terrifying interest rates, banks pretty much love one thing: money. So if they’re very, very happy, you really need to figure out what they know that you don’t.
Unfortunately, this message is arriving 15 years too late for the good people of Chicago.
This could’ve been the email newsletter that saved them.
But instead, they signed over the rights to the vast majority of their parking meters to Morgan Stanley’s private entity for 75 years. For 1.16 billion dollars. Which really sounds like a lot of money.
But perhaps you’ll remember the red flag: the bankers were excited. And it turned out, they were right. Just over a decade into the deal, Morgan Stanley (and their minority investors) had already made back their original investment, and also made an additional:
$500 million of profit.
And while the finances have gotten more complicated in recent years (making it harder to discern true profits), the meters have been pulling in more than 100 million dollars in revenue per year since rebounding from Covid shutdowns.
And it’s not just Morgan Stanley scrooging around in that meter money. It turns out none other than super-oil-rich Abu Dhabi owns around a quarter of the privatized meter company. Wow!
But why would Abu Dhabi give a shit about parking meters in the U.S.? Whyyyyy????
Hold that thought, while we give you:
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Abu Dhabi: Building a Diverse Portfolio Through Hard Work (Oil Money)
Right around the start of the 2000s, Abu Dhabi began to get nervous. Well, not nervous as much as interested in diversifying in the off-chance people start to act on this whole climate change thing. So far, they’re in the clear, but you can never be too careful.
As part of the United Arab Emirates (a country made up of seven separate emirates, including Abu Dhabi and Dubai), they were coming up on 50 years of delicious profits from their deep reserves of Hot Chocolate for Cars.
But what to do next? Perhaps a birthday party for the money? Or maybe a daring plan: use that extreme profit to make extremely more money, but in more diversified ways than just oil and gas. Introducing:
Abu Dhabi 2030: Still Oil, But Also Other Stuff.
And they were off to secure their future:
Step 1: Create a tourist island using migrant workers. Abuse and exploit those migrant workers so badly that the island project gets its own human rights violation report from a group simply called Human Rights Watch. Don’t worry, that report won’t stop a new arm of the Louvre from opening.
Step 2: Start a renewable and nuclear energy subsidiary (Masdar) that recently announced that they “expect promising results by 2071, the UAE’s centennial.” Side note: Masdar released a commercial that has somehow been viewed ten million times and only received TWO COMMENTS.
Step 3: Use Masdar to build Masdar City: a super-sustainable carbon neutral, zero waste city of the future, which will lead Abu Dhabi’s transformation into a renewable energy powerhouse. Okay maybe that city will be low carbon. The only way to get there is by car. And only a tiny fraction of the planned residents will live there. Leave them alone!
Step 4: Don’t forget to own around 25% of the private entity that now owns Chicago’s parking meters.
Step 5: Build and power enough desalination plants to provide 90% of your potable water. This one maybe isn’t about diversification, but that was a shocking number to us. They really don’t have a lot of freshwater in the UAE.
Step 6: Establish the first human settlement on Mars by 2117. New climate!
But if you really want to transform your oil economy, you need to transform your oil identity. Rebrand. Reborn. Reba.
The 28th Conference of the Parties (aka COP28).
Where better to host the annual UN climate summit than the UAE, a country that gets at least 30% of its GDP from oil and gas? And who better to serve as COP28 president than the CEO of the Abu Dhabi National Oil Company (Adnoc), Sultan Al Jaber?
As you might expect, a lot of people are pretty pissed about this. But the UAE and Adnoc were ready for the controversy, with a team to:
Edit the Wikipedia pages.
Thanks to an investigation published in the Guardian, we now know that a Wikipedia user, who disclosed that they were being paid by Adnoc, suggested edits to Al Jaber’s page, hoping to remove some references to his fossil fuel expansion work, and instead focus on their push to “invest in carbon capture and green fuel technologies.”
Another Guardian investigation revealed that the COP28 team had shared email servers with Adnoc, and allowed the state oil company to read emails to and from the COP28 office. Adnoc also consulted on COP28 team responses to media inquiries.
And then there was the leaked recording of a meeting between UAE officials and COP28 team members, where they strategize about the “need to preserve the reputation of the UAE, to look at how we can protect that and enhance its reputation.”
At the end of last year, Adnoc announced a $150 billion investment to increase oil production and take part of its gas operations public. Which, again, might explain why two PR professionals from Adnoc are providing support to the COP28 team. What a helpful bunch.
Chart Town: Half of a Terrible, Terrible Deal
About a year after the parking meters deal was finalized, the Chicago Inspector General put out about as scathing a report as an Inspector General can:
“The hasty, ‘crisis’ nature of the decision-making process meant that the short-term budget problems and the large upfront payment the City was receiving overshadowed all other legitimate, long-term, public-interest issues – the exact concern raised in the best PPP studies.”
Now, they mostly focused on how Chicago got WAY too little money for the deal overall. But they also snuck in that curvy little chart featured above to really stick it to the Daley administration.
Because it turns out, with the calculations used to get to the $1.16 billion/75 years deal: the city of Chicago could have cut the lease length in HALF and still received 93% of the total value. Or, in other words, they gave away their parking meters for 38 years (2046 to 2084) for around $80 million in 2008 dollars. Less than the private company now makes on those meters pretty much every year.
Lightning Round (we’ve never been closer to the end than now)
I don’t recall. In his 22 years as mayor (one more than his also-Mayor-of-Chicago father), Richard M. Daley had his fair share of scandals.
The Alderman Huels scandal, the Hired Truck Program scandal, and the his son and nephew secretly profited from no-bid city contracts scandal. Oh also the Meigs Field scandal, where Mayor Daley faced opposition to his plan to close a small airport near Chicago’s downtown, so he decided to just have city crews bulldoze six large X’s into the runway, rendering the airport unusable.
But the scandal that led to the most forgetful deposition was probably: the Park Grill scandal.
Basically, in the early 2000s, the $475 million Millennium Park (home of the Bean) was finally ready to open, including its now controversial restaurant, Park Grill. Somehow, a group of people close to Mayor Daley were given a 30-year contract to operate the restaurant, which included free gas, water, and garbage collection from the City.
But when the first new mayor in decades took office in 2011 (Rahm Emanuel), he quickly brought a lawsuit against the “commercially unreasonable” deal, which the suit claims cost taxpayers $5 million in just under a decade. And as part of that lawsuit, former Mayor Daley was forced to not remember very much on record:
Q: Were you ever asked in the 22 years that you were mayor whether the city should enter into a particular contract?
Daley: I don’t recall.
Q: You don't recall that ever happening?
Daley: No, I don't recall.
Okay, but what about the planning of quite possibly the most famous Bean in the world?
Q: Did you develop the concept of having — what do they call it, “The Cloud” or “The Bean” over in the park?
Q: “The Bean.” Let’s start with “The Bean.”
Daley: No. I could never — no.
Q: Did you know there was going to be a Bean?
Q: At the park?
Q: One day, you saw it, and that was the first time you knew about it?
Daley: I don’t even remember. I never knew it was coming.
Q: So you were involved in some of the details at least?
Daley: Trees, size of trees, just making sure that the facility would be up-to-date. Trees. I’m a tree lover. Put that on the record.
Never heard of the Bean, or any sweetheart deal, but fully focused on the uncontroversial classic: trees. Awesome!
But if we’re forced to live in a for-profit-car-playland, we might as well live in a more beautiful for-profit-car-playland. Or at least that’s how we felt when we came upon the most artful parking structure we’ve ever seen: the Marina City towers.
We changed our routes to walk by them. We marveled at how they’re really nice. We even included them in one of our shots for the episode.
And, like many things you think without looking at the internet first, we came to believe we were uniquely able to see the beauty of these concrete creations. But we were wrong. These buildings are ridiculously famous. Everyone talks about them. For decades. They even inspired this striking sentence on their own Wikipedia page:
“The towers' symbolic similarity to rural Illinois corncobs has often been noted in media.”
And often noted in the media they remain.
Official Rollie (no prize). There were no successful entries for Official Rollie (no prize) this cycle. Rollie has once again been consumed by his ego. He walks around signing city buses and mailboxes to “make them more valuable.” He keeps saying, “DO YOU KNOW WHO I AM” to strangers (they don’t). It’s getting bad. We need a winner.
So we continue our search for the perfect level of difficulty to become an Official Rollie (no prize). And we may have finally found it.
For our most recent episode, we spent a lot of time reading (and re-reading) Henry Grabar’s Paved Paradise: How Parking Explains the World. And we think you should do the same. So we’ll offer this: send us proof that you bought a copy of Paved Paradise, we’ll assume you also read it, and will consider declaring you an Official Rollie (no prize). You can buy it here, or wherever you want, really.
How about that, friend?
Well that's the end of the newsletter. If you want to send in a question, all you have to do is respond to this email. Or contact us directly at firstname.lastname@example.org. We may never answer it, but you never know.
Also, if you think you found a mistake, let us know. We try our very best to research and review our way to full accuracy, but it's a big world out there.
Art by: Kelsey Bravender
Edited by: Caroline Schaper
Legal support from: The Civil Liberties Defense Center
Executive produced by: Rollie Williams, Ben Boult, Nicole Conlan, and Matt Nelsen