The Chicago Sun-Times reports:
Chicago taxpayers have been hit with a $57.8 million ruling in favor of the private company that runs four city-owned, downtown parking garages — stuck with that bill because former Mayor Richard M. Daley's administration mistakenly allowed a competing garage to open nearby, according to documents obtained by the Chicago Sun-Times.
Mayor Rahm Emanuel has 90 business days to appeal the Feb. 25 decision by a panel of independent arbitrators regarding Chicago Loop Parking LLC's claim that City Hall violated the terms of its 99-year garage-privatization deal by subsequently approving plans for a garage in the 82-story Aqua building, about a block from the company's nearest garage.
… Chicago Loop Parking was granted the right to raise parking rates in the garages as high as it wanted under the deal, which the Chicago City Council approved 37-8. At the time, Daley called the plan "an outstanding deal" for Chicago taxpayers.
To protect the investors, the city promised it wouldn't allow any new garages offering public parking to open within an area bounded by East Wacker Drive, Harrison Street, Lake Shore Drive and State Street.
This is one reason why a straight-out sale, a real privatization, is sometimes better than a 99-year-lease. It's one thing for an auto company or a fast-food restaurant chain to grant a dealer or a franchisee exclusive rights to a region. But for the government to enter into a contract that gives a private company an exclusive deal seems wrong. The government shouldn't be preventing competition among parking operators; that hurts consumers.