A private garage operator is bent on “fully defending” itself against a lawsuit from a taxpayer organisation calling its seven-year-old parking concession agreement with the City of Chicago illegal.
Chicago Loop Parking (CLP), the operating partner in a Morgan Stanley Infrastructure (MSI) private consortium, has in the meantime lodged its own complaint, claiming the Windy City is at fault for contracting a rival private operator to manage a competing parking garage.
Chicago in 2005 leased garage parking in Millennium Park, Grant Park North, Grant Park South and East Monroe Street to MSI, a $4 billion infrastructure fund manager.
The garage parking deal, in which Chicago received $563 million in return for a 99-year lease, presaged a 2008 public-private partnership (PPP; P3) handing over on-street, metered parking to MSI and partner Chicago Parking Meters (CPM).
Both the garage parking lease and the on-street parking meter deal – a 75-year contract worth $1.15 billion – have been a point of contention for both the city and the asset class.
Garage operator Chicago Loop Parking called the lawsuit challenging its concession agreement “without merit”.
“[Chicago Loop Parking] will be fully defending [itself] under the concession agreement,” said Lena Parsons, a spokeswoman for Hill & Knowlton Strategies, a public relations agency representing CLP.
The Independent Voters of Illinois Independent Precinct Organization brought the suit, which also named Amer Ahmad, comptroller for Chicago. A state court judge granted permission for the suit to go forward.
“This is an illegal and offensive sale or lease of its sovereignty and exacerbated by the 99-year term,” the lawsuit claimed.
For its part, Chicago Loop Parking is demanding $200 million in a complaint saying Chicago violated its concession agreement when competitor Standard Parking Corporation was hired to run a parking garage connected to a multiuse, high-rise in downtown Chicago.
CPL filed its claim in 2011 on the basis that Chicago, under the concession agreement, would allow a competing parking garage to open.
As for the metered parking P3, Chicago Mayor Rahm Emanuel has ordered a financial and operational audit of Chicago Parking Meters.
Emanuel has refused to reimburse $50 million CPM is claiming to be owed in lost revenue because of road construction in Chicago.
The garage parking concession agreement and parking meter P3 were carried out under Mayor Richard Daley.
MSI is owned by Wall Street firm Morgan Stanley. Spokesman Matt Burkhard referred Infrastructure Investor to CLP for comment on the lawsuit.
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