Cities as Risk Managers: The Impact of Chicago's Parking Meter P3 on Municipal Governance and Transportation Planning

Abstract

Although the benefits o f infrastructure public-private partnerships are widely promoted, the public has little understanding o f the new forms o f risk and risk management obligations that city governments often absorb in infrastructure leasing concession agreements. This paper examines the City o f Chicago's parking meter lease agreement with Morgan Stanley Infrastructure Partners. Risk reduction mechanisms embedded in the contract resulted in the city absorbing new costs and risks that negatively impacted city finances and remade the local state as a risk manager tasked with responsibilities that protect the rate of return o f the global infrastructure investment fund. New planning and fiscal risks work as obstacles for transportation planners altering current street-level transportation configurations. Interviews with transportation planners revealed the new barriers put in place to safeguard financial investment that planners must navigate in order to realize environmentally sustainable and innovative street-level transportation planning.

Governing Infrastructure in the Age of the “Art of the Deal”: Logics of Governance and Scales of Visibility

“…There is some evidence that the first process documented here—the way in which an initial rejection of bureaucratic rules in favor of creative deals gives way, after a time, to a standardization of the governance process and a rejection of innovation—may be taking place not only in jurisdictions that have powerful P3 agencies but also elsewhere. American cities that have had bad experiences with P3 contracts, such as Chicago (Farmer ), are rumored to be banding together to adopt common templates and boilerplate contracts that are better, for them, than the notoriously bad ones they have individually signed. Even if P3 infrastructure templates have desirable features, however, they will certainly shut down potential innovation in contracts and in governance generally.…”

“…Highlighting public ownership reassures a public that is wary of privatizing government assets and services—and simultaneously distracts attention from the fact that the methods used to build these public assets not only rely on private sector methods and private sector logics but also empower for‐profit corporations in new ways. In the United States, municipal infrastructure has not generally been privatized, but there are currently many experiments in “monetizing” or financializing such assets that raise similar questions about how the needs of financial markets overdetermine local governance (Farmer ; Weber ). Further research would be needed to determine the extent to which our analysis of Canadian public–private partnership (P3) governance structures applies to US cities that have entered into P3s, but given the ease with which financial techniques and political rationalities travel around the world, it is likely our analysis is relevant elsewhere, especially in the United States, even if there are significant differences.…”

Colorblind transit planning: Modern streetcars in Washington, DC, and New Orleans

“…Citybased neoliberal policies aim to attract both capital and affluent residents by mobilizing "city space as an arena both for market-oriented economic growth and for elite consumption practices" and promoting revitalization in formerly declining inner-cities (Brenner & Theodore, 2003, p. 21). Local governance has advanced this policy ethos through multiple sectors, including the expansion of privatized public transportation (see Farmer, 2014), the destruction of working-class neighborhoods and public housing (see Vale, 2013), and speculative redevelopment, all of which intensify social and spatial polarization (Brenner & Theodore, 2003, pp. 23-24;Peck & Tickell, 2002).…”

Private Donations for Public Transit: The Equity Implications of Detroit’s Public–Private Streetcar

“…The private sector has become the operator of transportation assets through privatization in the form of long-term concessions and leases. For example, the City of Chicago leased its street parking meters to a multinational consortium for $1.15 billion (Farmer 2014). Because of the seventy-five-year contract’s terms, the city protects the parking supply and has paid significant fees ($61 million in 2012) when meters are out of service.…”

“…These private funders do not have claims to project-based direct revenue returns. From Farmer (2014) and Siemiatycki’s (2010) research, we expect that P3 project-based actions can have implications on regional transportation choices. Given that donations as a source of funding have a lower performance along an equity criterion (Cambridge Systematics, Inc., et al 2009) and Miraftab’s arguments, we identify a need for direct attention to social equity.…”