Stonepeak Partners and Chicago’s Parking Meter Deal

Stonepeak Partners, a private equity firm, is about to become the sole owner of Chicago’s parking meter revenue, possibly for the lifetime of many Chicagoans. Private equity often avoids the spotlight, and Stonepeak, with $88 billion under management and headquartered in New York’s Hudson Yards, reflects this by not responding to inquiries from a Tribune reporter about the upcoming City Council decision. This decision concerns approving the sale of the Chicago parking meter lease, considered one of the most financially damaging municipal deals ever.

The 2008 agreement saw Chicago lease its 36,000 parking meters for 75 years, receiving $1.15 billion in return. Chicago Parking Meters LLC, comprising Morgan Stanley, Allianz Capital Partners, and the Abu Dhabi Sovereign Wealth Fund, has already recouped its investment. Now, they plan to sell, and Stonepeak is the intended buyer.

The City Council, not the mayor, can approve or reject the sale. They could deny it out of moral or emotional reasons, though lawsuits may follow. A more feasible approach would involve imposing conditions on the sale, capitalizing on the Council’s leverage. Possible conditions could be eliminating convenience fees tied to parking apps, reducing fees for events and dining, or easing parking costs on Sundays and in the Loop during evenings.

Stonepeak touts its investment in infrastructure and long-term community benefits on its website. However, the parking meter deal offers little social value to Chicagoans. While not responsible for creating the deal, Stonepeak now takes on risks, such as potential city default or reduced parking demand due to autonomous vehicles.

The firm, led by billionaire Michael Dorrell, has linked itself with an unpopular deal. Unlike other transactions, this one brings attention as Stonepeak collects parking revenue. They should engage with City Council and propose concessions. By doing so, Stonepeak can prove its commitment to investing in Chicago’s growth and uphold its claims of positive community impact. Otherwise, the city’s challenging financial situation could affect the deal’s longevity.