Tuesday, April 30, 2013

Legacy Costs


Longtime readers will remember that once upon a time, during the twilight of an era now lost to history when your humble scrivener sat Josephus-like in the shadow of the Bridgeport Empire and scratched out occasional missives about the goings on of the sweltering many and the clouted few, Mare For Life Ah Da Grade Siddy A Shickaga -- Hizzoner Richard M. Daley -- starting selling off Da Grade Siddy Ah Shickaga's public assets at fire-sale prices.

Today, Da New Mare (one of the many Very Powerful People who were conspicuously silent as the deal went down, then went sideways, then swirled around the Clout Toilet Bowl for awhile to make sure all the right money filtered into all the right pockets, then finally went into the history books as one fucking godawful idea) boldly and retroactively pronounced the deal one fucking godawful idea:
“Chicago should never have done this deal,” Mr. Emanuel said.
but that short of going back in time and actually doing, y'know, the right-but-politically-perilous thing, despite the minor improvements that occasioned Mare Rahm's press conference, for the next couple of generations Chicago was basically stuck with the shit sandwich Dat Udder Mare Who Shall Not Be Named had squatted out as he made haste through the exit door:
Here are the details of today's revisions in the pact originally negotiated in 2008 by former Mayor Richard M. Daley:

On the plus side for motorists, Sunday parking will be free throughout the city, except downtown: the area between Roosevelt Road and North Avenue, and from Halsted Street to the lake.

Essentially, once the meter period expires on Saturdays, generally either 10 p.m. or midnight, no meter will have to be fed until 8 a.m. on Monday. The new system is supposed to go into effect by the end of summer.
Also, a new pay-by-cell option is supposed to be available by next summer. Instead of walking to a pay box and getting a ticket printed, parkers will be able to engage a phone app to pay digitally. A “convenience fee” of 35 cents will be applied to purchases of less than two hours, and those who use the app will have to set up an account with a minimum initial balance of $20.

Mr. Emanuel also stressed that charges the city faced for closing streets for construction, street fairs and other purposes now are being limited in the city's favor. Thus, for the two-year period that ended March 31, the city will pay its contractor $8.9 million, not the $49 million Chicago Parking Meters wanted. The city-friendlier math will be used in the future, officials said, saving $1 billion in estimated charges over the contract.

Now, the bad news:

The city agreed to add an hour on all blocks where metered parking currently ends at 9 p.m. In those spots, you'll have to feed the meter until 10 p.m. But on the Near North Side — from the Chicago River north to Division Street, between the lake and the Chicago River — metered parking will be extended three hours every day, until midnight from the current 9 p.m. end time.

Nor will the deal lower or limit the prices motorists are being charged, prices that reportedly are the highest in America.

Also: The city, per an arbitration panel ruling, will pay Chicago Parking Meters $54.9 million for a dispute regarding the use of disabled placards over the past two years. I don't know yet whether the deal will require the city to pay a similar amount in coming years.

Mr. Emanuel also made it clear that the city is not going to be able to junk the entire contract with Chicago Parking Meters, much as some aldermen would like that.

The $1.15 billion the city got under the deal “has been spent,” Mr. Emanuel said. “We can't make it go away. . . .But we can make it better.”

At a news conference today where he merely read a statement and declined to take questions, Mr. Emanuel did thank Chicago Parking Meters for making changes. He also promised that aldermen would have a minimum of 30 days to review the proposal — far more than the three days Mr. Daley gave them back in 2008.
Longtime readers with intact memories will also remember that, at the time, a few newspaper columnists for disreputable publications and a few bloggers working in the Bowery of the Internet thought that Da Mare's efforts to rip the copper pipe out of the walls of city government (so to speak) and sell them for scrap (to coin a phrase)  to a shady, well-connected consortium of  (among others) Abu Dhabi businessmen (no, really)...
The participation of Abu Dhabi’s sovereign wealth funds and other international investors exposes the level of sophistication of the money behind the city’s parking meter deal. Mayor Daley and other proponents of the contract argue that it is too soon to know if the parking investors will enjoy solid returns, but the players in the Chicago parking company are known for their acumen for profitable long-term deals. 
Indeed, when the government of Dubai recently encountered economic troubles, the financial markets looked to Dubai’s cash-rich neighbors in Abu Dhabi for help. And in the case of the parking contract, the parking meter company projects a net income of about $58 million in 2010 , after this year more than doubling what the meters had brought in for the city.
...in a deal cut together by the firm where Da Mare's is now taking his post-retirement leisure (see Postscript the First below), brokered by the investment house that had previously given Da Mare's nephew a nice, little sinecure (no, really)
Billy Daley Jr.’s Cook County deal is hardly the first Chicago door he’s opened for Morgan Stanley. That’s what they hired him to do. But his exact role in some lucrative arrangements remain shadowy. 
For example, the Sun-Times reported in its series last month that “Within a year [of hiring], his employer signed a new deal with his uncle, Mayor Daley. Morgan Stanley got a 99-year lease to operate the city’s four underground parking garages. City Hall got an upfront payment of $563 million – the highest offer made. 
Morgan Stanley told the paper in a statement that Bill Daley Jr. “was not involved” in any of the City Hall deals, but also refused to answer the paper’s written questions. And “In a brief phone conversation, Daley said he was too busy to talk and would call back. He didn’t.”
...and flaked by Da Mare's former-Daley-press-flak-turn-media-flak-for-the-company-where-Da-Mare's-kids-works-that-brokered-the-deal (Welcome to Chicago!)...
Morgan Stanley officials declined comment, referring all questions to Avis LaVelle, the former press secretary for Mr. Daley who was hired by the parking company.
...in order to prop up the profligate excesses of his Administration during its waning days
  1. Positively reeked of the kind of incestuous insiderism that had given Chicago a black eye for a century and, 
  2. Was maybe also just a terribly bad idea.
But no one listens to cloutless digital street gamin like disreputable newspaper reporters and even less reputable bloggers, and so the very, very bad deal Da Mare steamrolled through the rubber-stamp City Council on a largely party line vote (to those unfamiliar with the Chicago system, this is meant as whatchacall a "joke" inasmuch as Chicago has been a virtual one party Democratic fiefdom since Republican Mayor Big Bill Thompson lost his job as Al Capone's footstool) remained intact, reducing at least one disreputable blogger to cope with his utter powerlessness by making ha-ha funny posts about imaginary conversations between Da Mare and his Budget Office warlock/enforcer-turned-Chief-of-Staff-just-for-this-occasion while the people's property and legacy was put up on blocks and stripped for parts:

City Hall. Night. Phone rings. It’s the boss.

Hello boss.

Hey Volpe.

Uh….what can I do for you?

So da thig is, I need a billion dollars. For da people. Ah Chicago.

Volpe (forcing a weak laugh): What happened to the last billion I gave you? I told you not to spend it all in one place.

Long silence.

You tryin’ to be funny, Volpe?

The chief stays quiet. If they don’t want to be dispatched to

the Great Limbo of city college administration for eternity,

this is a skill chiefs of staff for Da Great City Ah Chicago
learn very quickly.

‘Cause you ain’t funny, Volpe. You never been funny.

Yes boss.

So what about dis billion which your Mare needs for da people ah Chicago.

Well boss, we’re broke. I mean, we told everybody we’re broke. We fired people. We’re going to fire more people. I don’t see how we can keep crying poormouth one day and then pulling money out of thin air the next?

I read the fucking papers, Volpe, and none a dat’s your problem. You problem is getting’ me my billion dollars. For da people. Ah Chicago.

But I’m not the budget guy, boss.



Well who is?

I don’t know.

How do you not know dat!?

I…I don’t know why I don’t know.

Ain’t it dat Johnson guy?

He quit. Last year.

Oh yeah. Da shower ting. Look, Volpe, it don’t matter whedder I call you chief ah staff or da King ah Monkey Island. You’re my money guy. Unless you got an itch to maybe run a dog grooming programming over at Malcolm X?

No boss.

Ever’body loves dogs.

No thanks boss.

An I hear a guy can make some good money givin’ dog haircuts. ‘Specially dose big dogs. What’re dey called?

I dunno boss.


(sigh) Afghan?




Giant Schnauzer?




Anatolian Shepherd Dog?


Bouvier des Flandres?


Burkina Flopping Hound?

Dat ain't a real dog.





I give up boss.

But how do you not know dis information if you’re gonna give dog haircuts? Unless now you’re tellin’ me now you don’t wanna give dogs haircuts?

That’s right boss.

An’ what’s your title again?

King of Monkey Island.

So when am I gonna get my billion? For da people. Ah Chicago.

I can have a proposal on your desk in, uh, three days.

You got five minutes.

(There ensues a four-minute pause.)

We could sell something.

Whad’ya got left on da list? 





Ad space on police cars?

We're savin’ dat one for da Olympics.

“Win a Date With a Committee Chair”?

Who you got?

Mell or…Beavers.

Oh for da love ah God.



Median strips.



Well….if you really think so.

Sure. I mean, uh, definitively. Definitely.

So are you tellin' me you recommend we sell da meters? For da people. Ah Chicago.

I do. Absolutely. Of course we’re gonna need the Council on this. You think that’ll be a problem?

(Four minutes of uninterrupted laughter)

I don’t care what udder people say about you, Volpe. You’re a funny guy.

Thanks boss.
See, Daley kept his Machine humming by feeding it money: by "solving" altogether too many of Chicago's short-to-medium-term problems by locking the city into "solutions" which could only be sustained over the long-term if the economy kept booming like mad forever.

But projected expenses started to run ahead of City Hall's still-rosy revenue projections projected, and since Da Mare did not want to touch the roughly $1B dollars in very flexible TIF money he and his aldermen carved up and tucked away for their pet projects,  Da Mare started looking for more of the people's property to turn into fast cash.

Like, say, the Skyway:
Chicago Skyway handed over to Cintra-Macquarie after wiring $1830m 
By Peter Samuel on January 24, 2005

The Skyway is a local icon. Is this where the investors will go if it turns out they paid too much? The City of Chicago announced it "closed" the concession sale of the Chicago Skyway tollroad this morning after it received $1,830 million by wire transfer. It says a 99-year lease is now in effect giving the Cintra-Macquarie consortium rights to operate the tollway. The investor group operating under the name of their single purpose subsidiary Skyway Concession Company LLC (SCC) took responsibility and control at 2pm central time. At that time staff employed by a toll collecting contractor to SCC, a mix of old city employees and new hires, took over toll collection and other operations. The tolls from 2pm are the property of SCC.

Dana R. Levenson, City of Chicago Chief Financial Officer is quoted in the announcement: "This transaction, which is the first of its kind in the nation, fulfills Mayor (Richard) Daley's continued commitment to pursue innovative financing techniques, and has provided Chicago taxpayers with an unprecedented single, up-front payment of $1.83 billion that we will use to invest in our people and protect Chicago's taxpayers both today and in the future."

John F. Harris, Director, City of Chicago Office of Budget and Management [see Postscript the Second] said: "While some people believe we should use every cent of these proceeds right now to address our ongoing financial challenges, Mayor Daley and the City Council together have decided that we should prudently and responsibly use these funds to improve neighborhood quality of life and protect taxpayers over both the short and long term."
But for all of the talk of tucking a big chunk of the Skyway dough away for a rainy day, within a few years Da Mare had smoked up his "Today" stash, and his "Tomorrow" stash and his "Save this for when I party with Whitesnake" stash and his "No, seriously, don't even touch this unless Armageddon has really-for-real been announced" stash and his "Cubs Win the World Series Reserve" stash...

..just in time for the economy to tank and for all of those rosy future revenue projections to turn to ash and blow away.

So back Da Mare went to sapping Peter and razoring out his pockets to pay Paul.

But that was now proving harder than expected.  First, the deal to sell off the city's water system stalled.  Then the deal to sell off an airport hit some (heh) turbulence.  Then the quick cash infusion and long line of credit that a future Chicago Olympics would have provided did not materialize.

Which brings us all the way back to...

You know how you used to have a job, and a house, and a car, and a wife and a family, and there was food in the fridge — and now you're six months into a drug habit and you're carrying toasters and TVs out the front door every morning just to raise the cash to make it through that day? That's where we are. While a lot of this book is about how American banks used bubble schemes to strip the last meat off the bones of America's postwar golden years, the cruelest joke is that American banks now don't even have the buying power needed to finish the job of stripping the country completely clean.
and,  B) Da Mare's very sudden decision that he din't want to be Mare no more.

Postscript the First:  To no one's surprise, part of Da Mare's post-retirement benefits package has included this:
On June 1, 2011 the international law firm Katten Muchin Rosenman LLP announced that Daley would be of counsel to the firm. Katten Muchin Rosenman LLP was among the law firms to which the Mayor had no-bid awarded the City's legal work. Katten Muchin Rosenman LLP negotiated the city's much-criticized long-term lease of its parking meters, and also the city's leases of the Chicago Skyway and City parking garages.
Postscript the Second:  Truly mnemonically-gifted longtime readers -- the kind who crush everyone at trivia contests and win at Husker Du every time -- are sure to remember that "John F. Harris, Director, City of Chicago Office of Budget and Management" is the same John Harris who went on to become  Blago's Chief-of-Staff,  then moved on to a short stint as "star government informant" before finally receiving the shortest prison term anyone can ever remember:
Blagojevich's chief of staff gets 10 days in prison 
Defendant gets sympathy from judge, who sentenced ex-governor to 14 years 

March 29, 2012|By Annie Sweeney, Chicago Tribune reporter 

A former chief of staff for Rod Blagojevich who provided crucial assistance to investigators was sentenced Wednesday to a mere 10 days in prison by a federal judge who reserved his harshest comments instead for the former governor, suggesting he was an impossible boss and pointing out some had even questioned his mental stability. 

The sentence for John Harris was in stunning contrast to the crushing 14-year term Blagojevich began serving earlier this month in a federal prison in Colorado. In fact, Blagojevich has already spent more time in prison than Harris will. 

During the sentencing hearing, U.S. District Judge James Zagel took the unusual step of querying Harris about what it was like to work for Blagojevich, quoting from letters sent to the court about how unreasonable Blagojevich could be. The judge also made a reference to suggestions at trial of "some level of mental instability" on Blagojevich's part. 

Zagel, who also sentenced Blagojevich, went on to express sympathy for Harris and the "dilemma" he faced with a boss who wouldn't be dissuaded from the plots and schemes to corruptly trade on his office and influence for his own financial benefit. 

But in the end, Zagel concluded that Harris shouldn't avoid prison time entirely. 

"You were much too close to power, and you had an ability either to stop some of the things (or) report what was going on," the judge said. 

After a dramatic pause, Zagel then announced his decision — 10 days in prison, perhaps the shortest prison term ever imposed in a public corruption case in Chicago. 
Because there is still a Club.


And you are still not in it.

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