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Wednesday, June 25, 2014

Chicago's 75-Year Parking Lease did Not Violate "Public Purpose" Clause of Illinois Constitution

The City of Chicago has gotten a lot of flak for entering into a 75-year concession agreement with a private company to lease its metered parking system.  It also got sued, including one lawsuit that challenged the City's authority to enter into the parking lease agreement and the agreement's constitutionality.  That case made its way to the appellate court last week, and the City prevailed.  Independent Voters of Illinois vs. Ahmad (June 20, 2014).  

In 2009, the Chicago City Council approved a concession agreement with Chicago Parking Meters, LLC to lease the metered parking system to CPM for a 75 year period.  The City received a one-time payment of $1,156,500,000, and CPM was entitled to all future revenue produced by the meters for 75 years.  Shortly after the agreement was approved, Independent Voters of Illinois (an association representing the interests of Chicago taxpayers) filed suit, claiming that the agreement violated the "public purpose" clause of the Illinois constitution, among other claims.  Specifically, the plaintiffs claim that the agreement illegally delegates the City's police power to issue tickets and citations to CPM, a private party. The plaintiffs also claimed that the agreement obligates the City to use public funds to reimburse CPM for lost maintenance, repairs, and expenses, and obligates the City to spend pubic funds to enforce parking meter tickets. The plaintiffs asked the court to declare the agreement unconstitutional and illegal.

The circuit court ruled in favor of the City, finding that the agreement did not violate the public purpose provision of the Illinois constitution.  The appellate court agreed, affirming the trial court's dismissal of that claim.  First, the ordinance approving the agreement is presumed constitutional, and plaintiffs did not plead any facts to overcome that presumption. Although the court acknowledged that CPM received benefits from the deal with the City, the court also noted that the City received more than $1.15 billion in consideration for the transfer of the meter parking system to CPM, just one of the public benefits from the agreement.  

The court acknowledged that it understands plaintiffs' argument that the concession agreement may not have been a good business deal for the City, but noted that a "bad deal" does not provide a basis for invalidating the concession agreement.  The court also rejected plaintiffs' argument that the agreement would "chill" the City's exercise of its police powers over the parking meter system, and found that it did not violate the City's home rule powers.  

The court concluded its opinion by upholding the circuit court's ruling in favor of the City.  The court did take a moment to "urge the City and the City Council to debate and act wisely in the future when seeking to ease the financial crisis." 

Post Authored by Julie Tappendorf, Ancel Glink


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