As part of a broader search to plug a looming budget gap, the city is negotiating with an Ohio company to “monetize” all those quarters it collects from parking meters.
The city has chosen Gates Capital Partners of Mayfield Heights, Ohio, after seeking proposals for a project described as “monetization of parking assets.”
That usually means taking a revenue stream — like parking fees — and grabbing up-front cash from an investor in return for guaranteeing that investor the same stream over time. The investor gambles that he’ll make more money over time than he put in. The owner of the stream (the city, in this case) gambles that it won’t be selling off its future for one-time bucks.
Officials won’t say exactly what this deal would mean for New Haven yet, until negotiations are completed. The company, too, declined comment.
But city Corporation Counsel Victor Bolden did say Friday what the deal does not involve: Selling off parking meters or handing over the collection of parking fees to a private company. Another cash-strapped city, Chicago, tried that in order to balance a budget, and ended up humiliated when the public learned of the long-term consequences of the deal.
For a taste of how the Chicago deal turned out, click here.
The pending New Haven deal would, like the Chicago deal, involve snagging up-front cash to balance the books.
Bolden described the arrangement under consideration in general terms: “We get money up front and pay the money back over time.” The city would continue to own and maintain parking meters. Gates would make its money by gambling on how much money in parking revenue would come back in the long term.
“The city won’t relinquish management or operational control” of the meters, Bolden promised.
And, he added, the idea of selling parking garages is not under consideration. The city toyed with that idea in the late 1980s, then abandoned it.
That story from Chicago is pretty frightening, but it really just is a bigger scale New Haven. I loved the line from one of the aldermen, "As one alderman told the Reader, but not for attribution, during a hearing on Midway: "Somewhere in this deal we're getting screwed. I just can't figure out where yet." I'd say we are small potatoes compared to the shenanigans Chi-town, but then again, we're learning.