On meter deal, legal action speaks louder than words

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Mayor Rahm Emanuel: hates the meter deal so much hell fight to keep it in place
  • Mayor Rahm Emanuel: hates the meter deal so much he'll fight to keep it in place

For a year and a half Mayor Rahm Emanuel has vowed to do everything possible to break the yoke of the parking meter deal.

He said he'd look into canceling it. He promised a "line by line" review of bills submitted to the city by Chicago Parking Meters, the private company that now "owns" the system. And most recently he declared that the city simply wouldn't pay a $50 million tab for street closures and disabled parking.

"I've said 'No,'" he told the Sun-Times.

But it seems that no doesn't always mean no.

As the mayor has railed against the meter deal to reporters, city attorneys have been defending it in court—and potentially undercutting whatever leverage the city has with the parking meter company.

At issue is a public-interest lawsuit filed in 2009 by attorney Clint Krislov on behalf of the Independent Voters of Illinois-Independent Precinct Organization. It claims that the meter deal is illegal and should be declared null and void.

Parts of the suit have since been tossed out by a Cook County judge, but the central claim remains: that the city illegally auctioned off its power to set public policy that manages traffic and parking.

Instead of instructing city attorneys to join the attack on the deal—or at least remain neutral—the mayor has them working to keep it in place.

City spokesman Roderick Drew insists that Mayor Emanuel wishes we could be rid of the deal, but “this is not the avenue.”

Earlier this month Emanuel issued his latest withering criticism of the deal after CPM issued its latest request to be reimbursed for temporary meter removals and free disabled parking. "There's a new sheriff in town," the mayor told the Sun-Times. "I don't think anybody had any idea they had the right to submit bills like that."

Yet city lawyers who answer to him took a much different position this spring. The process of reimbursing CPM when meters are taken out of commission is a "reasonable condition of the contract," the attorneys argued in a March 22 motion against the IVI-IPO suit.

In fact, they went so far as to claim that taxpayers benefit when CPM bills the city, since that forces officials to consider the true cost of allowing, say, a neighborhood fair or NATO summit to block off the streets. "The Agreement has encouraged the City to do something that any modern governmental entity should do, which is to act in a scientific manner and measure (i.e., quantify) the anticipated financial impact of the proposals brought before it."

This of course puts the city on the same side of the lawsuit as CPM, whose lawyers actually argued that city drivers take delight in one of the most reviled deals in city history. "The Agreement has materially improved public use and enjoyment of the System," contend the company's attorneys, from the powerful firm of Winston & Strawn.

Drivers have had the pleasure of paying more than $150 million into that system over the last two years.

By now it's becoming clear that we're still discovering all the hidden clauses, contradictions, and ironies in this privatization agreement.

So perhaps it shouldn't be surprising that city officials say their ability to fight the meter deal is itself restricted by the meter deal: the city is required to defend it in legal proceedings.

Not sticking up for the deal "would be a breach of contract," says Drew, the city spokesman.

Still, Drew says the city is setting up a system to "more aggressively manage the contract" by keeping close track of when meters are taken out of commission. He adds that this will ensure the company isn't "exploiting" taxpayers.

But Drew mostly reiterated what Emanuel has said repeatedly: the city can't afford to nullify the deal because it doesn't have a billion bucks—plus interest—to repurchase the street parking system. As the mayor puts it: "We are stuck with the contract."

Not so fast, say the IVI-IPO attorneys. They argue that if they somehow win—if the deal is deemed "void from its inception"—the city won't necessarily be on the hook. Under state law, if the contract is "unenforceable," the city could walk away, or, at worst, negotiate a repayment plan financed by issuing bonds.

"CPM is not entitled to be reimbursed," they argue in a motion filed last week.

And they say if they lose, the implications go well beyond the next 72 years of the meter deal, since by extension the city could potentially sell off its property tax system.

To say the least, it would be a shocker if the meter deal were struck down. But that doesn't mean Emanuel couldn't use the lawsuit to leverage CPM to back down on its reimbursement demands.

So far, though, "the city is still on the opposite side of this," says Krislov, the lead attorney for the IVI-IPO. "Maybe that will change after they review what we've presented."

In the meantime, Emanuel knows how to track down officials from CPM if he needs to.

Attorneys at the company's law firm, Winston & Strawn, have contributed at least $67,000 to Emanuel's campaign fund, according to state records. Among the donors were two of the three attorneys working on the parking meter lawsuit.

The spokesperson for CPM, Avis LaVelle, was appointed by Emanuel last year to sit on the board of the Park District. In September—shortly after he told Chicago Tonight that the meter deal "offends" him—Emanuel met with LaVelle and other powerful African-American business leaders for an hour in his City Hall office. The group was listed on the mayor's schedule as his "Kitchen Cabinet."

As an aside, the law firm that collected $662,760 for drawing up the meter contract, Katten Muchin Rosenman, now counts former mayor Richard Daley as a partner. Other partners donated $27,000 to Emanuel's campaign coffers.

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