When Chicago pawned its parking meters

Summary

Planet Money – “When Chicago Pawned Its Parking Meters”

Published: December 12, 2025
Hosts: Nick Fountain and Alexi Horowitz-Ghazi

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Overview:

This episode of Planet Money digs deep into Chicago’s infamous 2008 deal to lease its parking meters for 75 years to private investors, including Morgan Stanley and later the Abu Dhabi Investment Authority. Through interviews with journalists, city officials, and finance experts, the episode exposes how Chicago’s quest for fast cash during a crisis led to decades of regret, loss of city control, and became a cautionary tale about the perils and math of privatizing public assets.

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Key Discussion Points and Insights

1. The Pattern: Chicago Sells the Future for Cash (03:03–05:02)

• Mick Dumpke, a Chicago journalist, recalls the city’s string of privatization deals before the meter lease.
  • Skyway Lease: The city leased the Chicago Skyway (a little-used toll road) for $1.8 billion, mostly impacting out-of-towners.
  • Downtown Parking Garages: Similarly, parking garages under city parks went for $560 million up front, also mostly affecting tourists.
  • General Attitude: “Mayor Daley was praised for it, and he remembered that praise and then proceeded to look for other stuff to sell off.” — Mick Dumpke (04:12)
• But with the parking meters, this hit regular Chicagoans—a key difference.

2. The Parking Meter Deal: Rushed Decision, Massive Scope (05:02–06:46; 13:59–18:23)

• In late 2008, during the Great Recession, Chicago announces plans to lease all 36,000 city parking meters for 75 years for a lump sum of $1.16 billion.
• The city council is given very little time to review the deal, which was pushed urgently as a solution to budget shortfalls.
• Alderman Scott Waguespack voices skepticism:
  • “This doesn’t feel right. This does not feel right.” (14:23)
  • The rapid pace left no room for deliberation; the 520-page agreement was delivered just two days before the vote.
• City hall’s leadership is described as evasive, with officials actively dodging council members’ questions.
  • “That guy turns when I start talking to him and literally runs out the door into the hallway.” — Scott Waguespack (15:27)

3. The Buyer’s View: Calculating 75 Years of Nickels and Dimes (09:15–13:53)

• Sadiq Waba, head of Morgan Stanley Infrastructure Partners, led the team that bid on the meters.
• He describes the challenge: how to value 75 years of uncertain parking meter revenue, using the concept of the “discount rate”—future revenues are worth less today.
  • “$100 two years from now is very different than $100 50 years from now… at a certain discount rate is very small.” — Sadiq Waba (13:07)
• Waba and his team calculated the present value and settled on $1.16 billion, winning the bid.

4. Ignoring the Alternative: The City’s Narrow Math (26:28–28:23)

• Aaron Feinstein, working for the Chicago Inspector General, investigates the deal.
• He discovers the city “did not consider” what the meters would earn if they kept and managed them, only what private bidders would pay.
  • “We did not consider what the value of the meters would be to the city if we had kept them...” — Aaron Feinstein (26:52)
• Using a more conservative discount rate, Aaron estimates the system’s true value was $2.1 billion, almost double what the city received.

5. The Fallout: Buyer Profits, City’s Regret (20:20–25:33; 28:03–30:27)

• The deal immediately brings pain: meter rates quadruple, meters malfunction, and locals protest.
• The city loses flexibility—moving a meter for a street fair, building a bike lane, or allowing a dumpster now costs the city real money.
  • “Do you feel like you’ve lost control of your streets?”—Nick Fountain (22:58)
  • “Absolutely.” — Scott Waguespack (23:01)
• City payments to the parking company have exceeded $160 million since 2009 for lost meter revenue tied to public events or changes.

6. Transparency and Discovery: The Abu Dhabi Twist (23:19–25:13)

• Waguespack uncovers, by accident, that 25% of the meter company had been sold to the Abu Dhabi Investment Authority.
• The sale and changing of hands happened with little transparency; even sitting aldermen were unaware.
  • “I said, what does ADIA stand for?... Oh, that’s Abu Dhabi Investment Agency.” — Scott Waguespack (24:13)

7. Why Privatization Goes Wrong—and Hurts (30:27–32:48)

• Three main errors:
  1. The city over-discounted future profits.
  2. Lease term was too long—93% of value comes in the first half, so the second half is almost given away.
  3. The rushed crisis decision left little time for oversight.
• The public’s enduring anger isn’t just financial—it's because parking meters are a daily, visible nuisance.
  • “When you’re having to drive around the city and anywhere you pull up... you’re thinking, okay, hardly a dime of this is going to the city...” — Scott Waguespack (31:38)

8. The Legacy: A Deal for the Ages (32:15–32:48)

• The lease runs until February 29, 2084—creating a multigenerational burden for the citizens of Chicago.
  • “Instead of funding their own city, they are essentially renting back the space that used to belong to all of them, hour by hour...” — Alexi Horowitz-Ghazi (32:15)

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Notable Quotes & Memorable Moments

• “Now, the first one, the groundbreaking one, happened when the city privatized the Chicago Skyway… And the Chicagoans who do use it are people going to their summer homes in Mich.” — Mick Dumpke (03:24)
• “Immediately, my BS antenna went up and I knew that we were going to have to take a closer look at this.” — Mick Dumpke (06:01)
• “I was getting the brush off from quite a few people because they’re like, look, Scott, come on.” — Scott Waguespack (16:10)
• “[The deal] got jammed through and the final vote was basically five people voting against it.” — Scott Waguespack (18:11)
• “It is the worst deal, I think, in municipal history in the United States.” — Scott Waguespack (29:58)
• “Instead of funding their own city, they are essentially renting back the space that used to belong to all of them, hour by hour at cutthroat rates until the meter contractually runs out on February 29th of 2084.” — Alexi Horowitz-Ghazi (32:15)

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Timestamps for Important Segments

| Timestamp | Segment Description | |-----------|--------------------------------------------------------| | 03:03 | Privatization trend in Chicago begins | | 05:02 | Announcement of parking meter deal | | 09:15 | Buyer’s perspective: Sadiq Waba | | 13:59 | City council learns about and rushes to review the deal | | 15:27 | Officials evade questions; councilors alarmed | | 18:11 | City council approves deal—only 5 dissenting votes | | 20:20 | Immediate fallout: rate hikes, citizen outrage | | 22:58 | Loss of city flexibility—meter removals cost money | | 23:19 | Waguespack’s accidental discovery—foreign ownership | | 26:28 | Inspector General’s report: city ignored true value | | 28:03 | “Real” value was $2.1B—city left a billion on the table | | 29:58 | “Worst deal in municipal history”—lasting consequences | | 31:38 | Why privatization is so painful for the public | | 32:15 | Lease runs until 2084—Chicagoans as perpetual renters |

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Analysis & Takeaways

• Chicago’s parking meter lease is a stark lesson in the dangers of short-term thinking, lack of robust analysis, and failure of transparency in public asset management.
• The deal shifted a visible, everyday public good out of city hands for generations, with little recourse. The city’s desire for fast cash overwhelmed their obligation to maximize long-term public value.
• The episode closes with a sobering reminder: public assets, when sold off rashly, can turn cities’ residents into customers for decades, with little to show for it.

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For more:

• Book recommendation: Paved Paradise by Henry Grabar, cited by hosts as a compelling resource on the topic.
• Get Planet Money+ for bonus content and ad-free episodes: plus.npr.org/planetmoney

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Transcript

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[Kenny Malone]

Hey, it's Kenny Malone and I want to take a quick minute to talk about public media. It was founded to inform, to educate, to expand our perspective. But as of this fall, federal funding for public media, including NPR and local NPR stations, has been eliminated. It was a huge blow on top of an already very busy year here at Planet Money. You know, in 2025, we've raced to publish episodes on the trade war, the Doge Chainsaw, the fight over the Federal Reserve. And obviously we could go on and on. But we've also tried to balance that heavier stuff with stories to entertain and illuminate, even delight, we hope, from time to time, like the story about why it so hard to find a public toilet or the mystery behind the website milk.com we've also taken on some bigger projects this year, like the end of Pax Americana and kicking off our quest to make a board game. So it's been a lot and we want to be just as ambitious next year to meet whatever the moment calls for with, of course, your help. So thank you if you've already gone the extra mile as an NPR supporter, and if not, you can join our PLUS community. You can get a bunch of perks like bonus episodes and more from across NPR's podcasts and support public media along the way by signing up for NPR today. You can just go to plus.NPR.org and of course, thank you.

[Nick Fountain]

This is Planet MONEY from npr. Chicago journalist Mick Dumpke has an amazing memory. He's the type of person who can look at a map of a new city and then go for a run and not get lost or recall exactly where he was on a Tuesday in December of 2008. He was at the gym.

[Mick Dumpke]

I'm a regular weightlifter, Nick, even though you'd never know it from looking at me because I'm not a very big guy. But I'm pretty sure I was in the weight room at that time on.

[Nick Fountain]

The floor, on the exercise mat.

[Mick Dumpke]

I was maybe doing sit ups or stretching and the TV was like above.

[Nick Fountain]

The exercise mat, the TV was playing the news.

[News Reporter]

Well, the city of Chicago has struck a deal with a private company to take over the city's parking meters.

[Alexi Horowitz-Ghazi]

The story was about how Chicago's mayor, Mayor Richard M. Daly, had made a deal with some outside investors to sell off the proceeds to Chicago's parking meters for a big upfront payment of $1.16 billion.

[News Reporter]

The proposed 75 year lease has to be approved by council.

[Nick Fountain]

Now, this wasn't all too surprising to Mick. Mick had covered Daley a lot, and he says the Daley administration at the time had pretty much constant budget issues, but they had found this new tool. They were privatizing stuff all around the city. They were selling off future revenue in exchange for a much needed big lump sum payment.

[Mick Dumpke]

Now, the first one, the groundbreaking one, happened when the city privatized the Chicago Skyway, which is. It's not even a full highway.

[Nick Fountain]

It's like a shortcut to Indiana.

[Mick Dumpke]

It's a shortcut to Indiana. Thank you.

[Alexi Horowitz-Ghazi]

In that one, the city gave up toll revenues for nearly a century in exchange for $1.8 billion up front. And people were cool with this. The way Mick describes it, Chicagoans barely use the road. It's mostly out of towners.

[Mick Dumpke]

And the Chicagoans who do use it are people going to their summer homes in Mich. And if you don't want to pay the tolls, you just drive on local roads.

[Nick Fountain]

Honestly, seems ideal to be able to sell off out of towners slash rich guys who are going to their vacation homes. It doesn't seem like there's that much of a downside to that one.

[Mick Dumpke]

That's exactly the way it was received. And Mayor Daley was praised for it, and he remembered that praise and then proceeded to look for other stuff to sell off.

[Alexi Horowitz-Ghazi]

Yeah, like the parking lots downtown under the big parks that run along Lake Michigan. For those, Chicago gave them up for a century and got $560 million up front.

[Mick Dumpke]

And again, it was another thing that people didn't have to use because the people who used it were in large part tourists, suburbanites.

[Nick Fountain]

I love that Chicago ads, love screwing over the. The occasional tourist.

[Mick Dumpke]

Oh, absolutely.

[Alexi Horowitz-Ghazi]

Mayor Daly, Chicago, they were on a roll with these privatization deals. Each one brought much needed money now and at the expense of not only out of towners, but future out of towners.

[Nick Fountain]

Which brings us back to the mat, the gym mat. Mick's on the floor watching this news report, and he sees that Chicago has struck another privatization deal.

[News Reporter]

Plug the city's budget gap.

[Nick Fountain]

Except this time it was for all 36,000 parking meters in the city, which those aren't exactly used by out of towners.

[News Reporter]

So if city council approves this lease beginning next year, when you go to feed that meter, you can definitely expect to pay more.

[Alexi Horowitz-Ghazi]

And the city seemed to want to get this deal Approved as soon as possible. This was December 2008, the depths of the Great Recession, and the mayor was looking to raise revenue without raising taxes.

[News Reporter]

The mayor clearly worried about the economic crisis. He hopes that this will help avert future problems.

[Nick Fountain]

Now, Mick, he had developed a sort of healthy skepticism of the daily administration and their privatization campaign. But this deal seemed weird. They were selling off the city's parking meters for 75 years in maybe a fire sale.

[Mick Dumpke]

Immediately, my BS antenna went up and I knew that we were going to have to take a closer look at this.

[Nick Fountain]

But you knew you had a story.

[Mick Dumpke]

I knew I had a story. And that started more than 15 years of reporting on this deal for me. Sounds like a sentence, doesn't it?

[Nick Fountain]

Yeah.

[Aaron Feinstein]

Yeah.

[Alexi Horowitz-Ghazi]

And it wasn't just Mick who'd been sentenced to 15 years of this parking purgatory parable. This deal that Chicago made would go down as one of the most notorious miscalculations in the history of city government. It would call into question what the government is even supposed to do and become a textbook case on the potential pitfalls of privatization.

[Nick Fountain]

Hello and welcome to Planet Money. I'm Nick Fountain.

[Alexi Horowitz-Ghazi]

And I'm Alexi Horowitz. Ghazi. The word privatization gets thrown around a lot these days. Recently there have been proposals to privatize all sorts of things that once seemed core to the idea of government. Social Security, air traffic control, the post office. But infrastructure has long been ahead of this curve. Chances are you've driven on a private toll road in your life. You've flown out of a privatized airport. Maybe you've drunk from a privatized water system.

[Nick Fountain]

And behind those deals to sell off government run services and the future fees they collect for an upfront payment, there is a math problem. How much are the future tolls or water profits worth today? How much will they be worth in the future? And when does that trade make sense for the public?

[Alexi Horowitz-Ghazi]

Today on the show the Chicago parking deal, there will be kidnapped parking meters, foot chases through city hall and trash bags filled with secret documents.

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[Nick Fountain]

People from the Daily administration who negotiated the deal to sell off Chicago's parking meters for 75 years. They did not want to talk, but we did get to talk to somebody on the other side, somebody who wanted to buy them. His name? Sadiq Waba.

[Sadiq Waba]

Parking meters is not the most. What's the right word? Help me out here. It's not the most exciting thing, right?

[Nick Fountain]

You were trying to not say sexy.

[Sadiq Waba]

Sexy. Okay, thank you. So it's not the most sexy thing. Right.

[Alexi Horowitz-Ghazi]

In 2008, Sadiq led a firm called Morgan Stanley Infrastructure Partners, where he was tasked with finding new projects to invest in. And when Chicago put out a request for bids on its parking meter system, he was curious, like, what would this actually look like? No one had done it before in the US Taking over a city's parking meter system. So he flew to Chicago to take a look.

[Sadiq Waba]

We rented the car and went around understanding what it meant to have a parking meter in a particular area.

[Nick Fountain]

You went to the Loop, you went to neighborhoods like Logan Square, everywhere it's this, right?

[Sadiq Waba]

You get statistics that says there are 200 parking meters in this neighborhood. Okay, what does that mean? If I have a parking meter where you have storage facilities, no one really parks there after four o' clock or whatever. Right. Then the usage is going to be very low.

[Nick Fountain]

And you yourself, the top dog, you were doing this on the ground research.

[Sadiq Waba]

Yes.

[Nick Fountain]

Yourself. That surprises me.

[Sadiq Waba]

No, it doesn't surprise me at all.

[Alexi Horowitz-Ghazi]

Of course he hit the streets. These deals are made on the details. Details like what the future meter rates were going to be.

[Nick Fountain]

The city's rates had remained very, very low for many decades, like too low, a quarter an hour in many neighborhoods, which meant people would just camp out in those parking spaces all day long. Some city councilors, or aldermen, as they're called in Chicago, wanted to raise rates. But what they didn't want was the political blowback.

[Alexi Horowitz-Ghazi]

Sadek Wasn't too worried about all that. He was focused on other things, like calculating how much the future profits from these meters were worth.

[Nick Fountain]

Remember, this deal was for 75 years. Trying to figure out, like, the next 10 years of profits is hard. What if there's another recession? Will people keep driving? Will they even need parking now? Do that every year for 75 years.

[Alexi Horowitz-Ghazi]

The math is daunting, especially because this touches on one of the most important concepts in finance and economics and honestly, daily life, the time value of money.

[Nick Fountain]

Are we talking about a certain rate? Are we talking about the discount rate?

[Sadiq Waba]

Perhaps the discount rate.

[Alexi Horowitz-Ghazi]

Ah, the discount rate. Basically, the idea behind a discount rate is that money now is worth more than money later. If someone offers you $100 today or $100 a couple years from now, you should almost always take the $100 today. Because if you take it now and stick it in a savings account, you can earn interest. Maybe it'll become $110 in a couple years, but if you wait to take it, you'll have lost out on that opportunity. And also, $100 will buy less because of inflation.

[Nick Fountain]

Basically, money in the future is worth less than money today. And remember, Sadic is trying to figure out what money in the future. The profits from the parking meter system for each of the next 75 years, what those are worth in 2008, because he's going to pay for them up front in a lump sum.

[Alexi Horowitz-Ghazi]

The good news is, mathematicians long ago figured out how to take future earnings and calculate their present value. They call this discounting. And the rate at which you discount the future is called the discount rate.

[Nick Fountain]

And the discount rate you use to calculate what the future is worth today can have huge implications. Also, how far into the future you're going. The longer the time frame, the bigger the discount.

[Sadiq Waba]

$100 two years from now is very different than $100 50 years from now. At some point, the value of what you think that $100 is that you're going to get 50 years from now at a certain discount rate is very small.

[Nick Fountain]

So beyond. Call it teeny, right, 50 years.

[Alexi Horowitz-Ghazi]

Yeah.

[Sadiq Waba]

But that value is zero.

[Nick Fountain]

Effectively zero. Correct.

[Alexi Horowitz-Ghazi]

So Sadhek and his team, they plug in all the future profits, they discount how much those profits are worth, and they try and figure out the present day value of 75 years of profits. The magic number. They come up with $1.16 billion. They submit it to the city, and they wait and wait, and then they find out they won on a Tuesday. Mayor Daley has that Press conference we heard about earlier announcing the deal.

[News Reporter]

Well, the city of Chicago has struck a deal with a private company to take over the city's parking meters.

[Nick Fountain]

Now, as we mentioned, Mayor Daley's administration had already used the privatization tool a couple of times before. But this announcement happened so quickly, with so few details, that some members of Chicago's city council were taken by surprise. Scott Waggesbach was a young alderman at the time representing the 32nd Ward. And he remembers thinking, this deal is weird. We gotta look at it now.

[Scott Waggesbach]

We're sitting in the ward office, and we were kind of going, you know, past five, past six o', clock, you know, we're sitting here talking it through. And I said, okay, guys, this doesn't feel right. This does not feel right.

[Alexi Horowitz-Ghazi]

Scott especially didn't like that Mayor Daly's people were trying to strong arm the city council into moving fast. The mayor's people were saying, listen, the economy is in full on meltdown mode. Remember, this was late 2008. We need the money now.

[Nick Fountain]

Yeah. They said, if you don't approve this, our budget is cooked. Because, surprise, that budget budget you already passed, it includes $150 million in revenues from this deal. If you spike this, we'll have to raise property taxes.

[Alexi Horowitz-Ghazi]

Scott does some back of the envelope calculations on the parking system's worth, and he thinks this deal is bad. But when he shows up the next day at city hall to press the mayor's staff on this, he cannot seem to corner them.

[Scott Waggesbach]

At one point, I see the cfo and I go, have you read this thing? You know, and he's kind of across the room. And I go, I need to talk to you about this.

[Mick Dumpke]

This.

[Scott Waggesbach]

This isn't enough money. We're not getting enough out of this. That guy turns when I start talking to him and literally runs out the door into the hallway, runs down the hallway. And I'm like, wow, this thing's got to be really bad if he's hoofing it down the hallway.

[Nick Fountain]

He ducked you.

[Scott Waggesbach]

I think he knew what the deal was.

[Alexi Horowitz-Ghazi]

On Thursday, just two days after the deal was announced, the whole city council met to deliberate.

[News Reporter]

Council will come to order. Please, clerk, call the roll.

[Scott Waggesbach]

I was just walking around saying, look, don't vote for this thing.

[Nick Fountain]

You were literally walking around trying to pick people off, tell them not to vote for this.

[Scott Waggesbach]

Yeah, I was getting the brush off from quite a few people because they're like, look, Scott, come on.

[Nick Fountain]

Yeah. The way Scott and others describe it, the mayor had a lot of influence over the City council at the time.

[News Reporter]

Thank you, Mr. President. I supporting this and I just. Three good reasons. One, a billion dollars.

[Scott Waggesbach]

This deal needs to get done.

[News Reporter]

Who's going to give us a billion dollars? Two, no tax raises.

[Scott Waggesbach]

The administration says it's awesome. You know, we need to close the budget gap.

[News Reporter]

And three, we balance the budget. Thank you.

[Alexi Horowitz-Ghazi]

Scott convinced a few people on the council the deal was bad and to vote against it it. But speaker after speaker stood up and said, listen, is this the greatest deal ever? Eh, it's a deal and we do need the money now.

[Scott Waggesbach]

I think the concession agreement was actually 520 pages. I think the initial contract was like 75. And one of the aldermen next to me, Dick. Mel.

[News Reporter]

Thank you, Mr. President.

[Scott Waggesbach]

He stood up and he said, how.

[News Reporter]

Many of us read the stuff when we do get it?

[Scott Waggesbach]

That was his quote.

[Alexi Horowitz-Ghazi]

Okay, let's face it.

[Scott Waggesbach]

And so I holed it up and I. And I kind of yelled out. I was like, I read it, I read it.

[News Reporter]

All right, we've got it.

[Alexi Horowitz-Ghazi]

I know some do and some do it.

[Nick Fountain]

Scott was flabbergasted that a colleague was saying on Mike that they hadn't read the deal. That felt like a dereliction of their duty as elected officials to their current constituents and also for generations to come.

[Alexi Horowitz-Ghazi]

But on the other hand, you can see why Chicago City Council members would be tempted by this deal even if they didn't fully understand it. It's a dynamic you see all the time in politics because politicians live on the timescale of election cycles. It can be strategic to pass some policy that seems to be addressing a short term crisis, even if it creates bigger problems down the road. That way they can at least tell voters that they're doing something.

[Nick Fountain]

And so when it came time to tally the votes for this parking deal, 40 of Scott's colleagues voted for it.

[Scott Waggesbach]

And lo and behold, this thing kind of got jammed through and the final vote was basically five people voting against it.

[Nick Fountain]

You were one of the five who voted no.

[Scott Waggesbach]

Correct.

[Nick Fountain]

How do you feel about that vote today? Well, I. After the break, the answer to that. Nah, just kidding. You know the answer.

[Scott Waggesbach]

I feel great about it after the break.

[Nick Fountain]

Why he feels great about it, how his read on the deal was eventually vindicated and how a string of revelations enraged Chicagoans all across the city.

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[Nick Fountain]

The parking deal went through. Chicago got its $1.16 billion in exchange for 75 years of parking revenue and they put some of it in a rainy day fund.

[Alexi Horowitz-Ghazi]

And the folks on the other side of the deal got the parking system. They started by setting up a private company to run the system, Chicago Parking Meters llc, and they hired people to collect the quarters to write parking tickets to service and replace Meters.

[Nick Fountain]

In February of 2009, when the private company took over the system, things pretty quickly went awry. Meter rates went way up in some areas. They quadrupled from a quarter an hour to a dollar, which meant Meters couldn't handle all the quarters. The company also calibrated some meters wrong so people were being ripped off. Chicagoans started protesting, forget nickeled and dimed.

[Sponsor/Advertisement Voice]

These folks are tired of being quartered.

[Nick Fountain]

The vast majority of the people reject the President parking meter deal and reject Morgan Stanley's ownership of the parking meter deal.

[Alexi Horowitz-Ghazi]

Other people started disappearing parking meters kind of cool hand Luke style.

[Nick Fountain]

They've been grabbing these like hotcakes.

[Alexi Horowitz-Ghazi]

I don't know who and where.

[Aaron Feinstein]

I don't see how I can get away with it.

[Alexi Horowitz-Ghazi]

You know what I mean?

[Nick Fountain]

There were TV debates like this one time Mick the Journalist got into it with one alderman about what research he did before he voted for the deal.

[Alexi Horowitz-Ghazi]

It's not true.

[News Reporter]

I did a lot of research on it.

[Alexi Horowitz-Ghazi]

It's none of your damn business.

[Sponsor/Advertisement Voice]

It is a Republic official. You're representing the people.

[Alexi Horowitz-Ghazi]

Damn right I am, and I do my job. Yes, people were mad about the meter increases and the dysfunction. But Scott Wag, the alderman who'd voted against the deal, says as time wore on, another aspect of the deal started to grind people's gears.

[Nick Fountain]

Scott says the deal had provisions in it that meant the city had to pay anytime they took a meter out of service, like for a street fare. Before he could just shut off the street. Now he had to think of the meters. The parking company would calculate the opportunity cost.

[Scott Waggesbach]

It was essentially, okay, well, if you take 150, 200 meters out of operation for four days, they came back and said, here's the cost of taking those meters out.

[Alexi Horowitz-Ghazi]

It could be in the tens of thousands of dollars.

[Nick Fountain]

How did you feel when they came back to you with a price tag like that?

[Scott Waggesbach]

What the hell? I mean, that's what people would say. Like, what are you talking about, alderman?

[Alexi Horowitz-Ghazi]

And it wasn't just street fairs. Every time a dumpster needed to be in front of a meter, every time somebody proposed a bike lane or a bus stop or a loading zone in front of their business, Scott had to find a new place for the meters, or the city would have to pay up.

[Nick Fountain]

Do you feel like you've lost control of your streets?

[Scott Waggesbach]

Absolutely.

[Nick Fountain]

One year, Chicago's payments to the parking company topped $26 million. Since 2009, the city has paid more than $160 million. And yes, the city had been paid its $1.16 billion, but it was burning through a chunk of those proceeds and sending them out of the city.

[Alexi Horowitz-Ghazi]

Scott says all of this really reached a boiling point for him, thanks to an accidental discovery he made.

[Aaron Feinstein]

One day.

[Scott Waggesbach]

I'm sitting in my office here, right where we're doing the interview, and somebody called up, and I could hear they were angry.

[Nick Fountain]

Why? Because of a big pile of trash that was in an alleyway behind a city building in his district.

[Scott Waggesbach]

So I jumped in my car, and I go over there. So I go into the alley, and there are piles and piles of paper and bags, and some of it's shredded and some is not. And I got kind of angry, and I was like, man, who throws all this stuff out here? So I started digging through the piles, and I started finding all sorts of meter deal documents, really. And I thought, what in the heck is this paper? And what is this? And what. Wait a minute. What is this?

[Alexi Horowitz-Ghazi]

Scott says he'd stumbled upon the motherlode of Chicago parking meter deal documents, which had been hidden from city councilors, from aldermen like him.

[Scott Waggesbach]

So I started throwing some of it into my trunk. I'm standing there in the alley, and I remember calling up my brother, and I said, hey, there's a bunch of acronyms on some of these papers, and this looks pretty shady. And I said, what does ADIA stand for? And he said, oh, that's Abu Dhabi Investment Agency. And I said, the meter system has been essentially sold off. They had flipped it over to Abu Dhabi Investment Agency without telling anyone.

[Nick Fountain]

We reached out to the Abu Dhabi Investment Authority. That's what it's called. To see if they wanted to talk about this story. They declined. So did the city's CFO under Mayor Daley. And the CEO of Chicago Parking Meters LLC did not respond to our request.

[Alexi Horowitz-Ghazi]

Now, Scott later found out that only about 25% of the company had been sold to the Abu Dhabi Investment Authority. And he. He wasn't exactly annoyed that they specifically were getting the meter profits. It could have been anyone. He was more upset about the lack of transparency that he, a city alderman, had no idea what was happening on his streets.

[Nick Fountain]

But it wasn't clear exactly how bad the deal was until one person spent months actually running the numbers. His name? Aaron Feinstein. Aaron's a wonk. He's not afraid of an Excel formula. In 2008, he started looking into the parking deal when he was working for Chicago's inspector general. He says the investigation took over his life. One day, he was checking in with.

[Aaron Feinstein]

His boss, and I remember saying to him, just at one point, I was like, I hate parking meters. I've been thinking about parking meters for, like, four months, and I can't. I just don't care. I hate parking meters.

[Alexi Horowitz-Ghazi]

Alas, the investigation continues. Aaron's job was to write up a big report, a definitive accounting of the meter deal. He started asking questions of the city and its consultants, and because he worked for the inspector general, they were required to answer him. And some of their answers were kind of shocking.

[Aaron Feinstein]

We asked them point blank, hey, what was the value of the city's parking meters to the city if the city had kept the meters for themselves and raised the rates, increase the hours of operation as outlined in the lease? Their response was, we did not do that. We did not consider what the value of the meters would be to the city if we had kept them under city management and raised the rates ourselves?

[Nick Fountain]

That is the question.

[Aaron Feinstein]

No, that's.

[Nick Fountain]

To me.

[Aaron Feinstein]

That's the question. I couldn't believe that they put in writing that we, that they did not do that. I just. Yeah, I think I probably very quickly was like, well, that's it, we should. That's it, the report's done. They didn't consider it. Haha. We got him.

[Alexi Horowitz-Ghazi]

Let's go.

[Nick Fountain]

Yeah. Right. Then Aaron realized the only thing the city calculated was what they could expect to get from the private sector, not what the parking meter profits were worth to citizens, to the city if they kept them.

[Alexi Horowitz-Ghazi]

And for Aaron, one of the biggest problems was the discount rate the city used for the deal. He says it was just too high. Basically the city undervalued the future profits.

[Nick Fountain]

Aaron wanted to correct this. He did a bunch of research, called up experts across the world to see what discount rate he should use to figure out what the present value of the parking meter system was to Chicago, to its residents. And then he ran his own models using a conservative estimate of profits and a less aggressive discount rate.

[Aaron Feinstein]

We concluded that works out to a value of the city's parking meters in 2008 of 2.1 billion or so. So about a billion, billion more than the city ended up selling it for.

[Nick Fountain]

That's a huge difference.

[Aaron Feinstein]

Yeah, that's like, that's like double. Just about, Just about.

[Alexi Horowitz-Ghazi]

Aaron also looked at the length of the deal. He found that Chicago got 93% of the value of the deal out of the first half of the lease the first 37 years, which means Chicago got pretty much nothing for the last half, the last 38 years.

[Aaron Feinstein]

And why would you do that? And I don't know why we pressed that point and they never responded to the length of the lease, which is, I think the most egregious part of the, of the transaction is the length of the lease. That you've sort of made this decision for three generations of folks who live in the city of Chicago and there's very little they can do to undo this decision.

[Nick Fountain]

Does it make you angry?

[Aaron Feinstein]

Uh, yes, I guess. Angry that it was just sort of a, this short term band aid solution to get through, you know, a single year or two's budget problems. And now the city has lost this asset that it used to have that turns out to be pretty valuable.

[Nick Fountain]

It's still unclear whether whether this deal was so long and so bad because of negligence or myopia or just ineptitude. And in fairness to the city, they said that Aaron's estimates were unrealistic because they didn't have the political will to raise meter rates themselves. What is clear is that this deal has been super lucrative for the buyer side. According to an audit published last year, the company that paid for the Meteor system has earned back their billion dollar plus investment and earned another $800 million on top of that. And there's still almost 60 years left on the contract.

[Alexi Horowitz-Ghazi]

Yeah. Scott Waggesbach, the alderman who voted against the deal, he still has a lot of feelings about how this all went down.

[Scott Waggesbach]

It is the worst deal, I think, in municipal history in the United States.

[Nick Fountain]

Wow.

[Scott Waggesbach]

Oh, yeah, it's absolutely the worst deal in the history of municipalities.

[Nick Fountain]

If you're running a postmortem on what makes this the worst deal of all time, it's. It kind of boils down to three things. One, Chicago discounted the future too much. Two, they made the term of the lease too long. And three, they made the decision too quickly during a moment of crisis.

[Alexi Horowitz-Ghazi]

All of this feels like kind of a case study about why privatization is such a controversial topic. The case for privatization, of course, is that there are times when the private sector can do things more efficiently or cheaply than the government. Or as in this case, that it offers the government access to much needed revenue when they need it, instead of having to collect it quarter by quarter over decades. But if you don't actually do the math, actually tally up how much those meters would have paid out if the government kept them, or figure out how much it's worth to keep control over adding new bike lanes or closing off city blocks for a parade, you may just end up selling the farm for a pitman.

[Nick Fountain]

There is one more reason that I think this deal has continued to piss everyone off. It's kind of a cynical take. I ran it by Scott the alderman. I have this theory that the reason people really hate this deal is not necessarily because of the economics. It's because they have to feed the meters all the time and they interface with it all the time. Right? Like selling off the proceeds to toll road used by out of towners or parking lots used by tourists is not as viscerally annoying than the parking meters, do you think?

[Scott Waggesbach]

I agree. My theory holds and yeah, yeah, I agree with you. You know, when you're going across a, a bridge or something and you know, you kind of put the money in for the easy pass, that's, you know, kind of quick. But when you're having to drive around the city and anywhere you pull up and you're putting money into that box and you're thinking, okay, hardly a dime of this is going to the city, that's money right out of your pocket. For the next, you know, what is it, 60 plus years?

[Nick Fountain]

Several generations?

[Scott Waggesbach]

Yeah, kids and grandkids will be paying for this thing for decades to come.

[Alexi Horowitz-Ghazi]

Everyone who's ever visited a big city knows that finding a parking spot remains one of the great pains of modern urban life. But because of this deal, Chicagoans have also felt this additional sting. Now every time they pop in a quarter or many quarters to feed the meter, instead of funding their own city, they are essentially renting back the space that used to belong to all of them, hour by hour at cutthroat rates until the meter contractually runs out on February 29th of 2084.

[Nick Fountain]

Yeah, you heard that right. The contract. This whole situation ends on a leap day. Hey, just a little reminder on how you can keep our meters running. Planet Money plus supporters get every episode without any sponsor messages. They get bonus episodes. And most importantly, they support this journalism that you're hearing right now directly. Which means we can rely less on sponsors or anyone. You can sign [e-mail] Planet this episode.

[Alexi Horowitz-Ghazi]

Was produced by Willa Rubin with help from Luis Gallo and Sam Yellow Horse Kessler. It was edited by Jess Jiang, fact Checked by Vito Emanuel and engineered by Sina Lofredo. Alex Goldmark is our executive producer.

[Nick Fountain]

Special thanks to Ben Jufski, Tony Arnold, David Hoffman and Matt Messbarger from Chicago's clerk's office who found that amazing recording of the city council meeting. Also big, big thanks to Henry Grabar. I first heard about this story from his terrific book all about parking. It's called Paved Paradise. I really loved it. I'm Nick Fountain.

[Alexi Horowitz-Ghazi]

I'm Alexi Horowitz Ghazi. This is npr. Thanks for listening.

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