Would you mind to walk us through your calculations, and share how did you discover that NPV of that income stream is a lot more than $1.6bn and what figure did you arrive at?
> being obligated to maintain the spaces as sold for 75 years
Technically - and as the court correctly pointed out - this is not the obligation. The obligation is to preserve the income stream. It is true that if the city gets rid of the spaces, it would be hard for it to preserve the income, but there could be options - like create more parking in different places, etc. Of course, when undertaking such an obligation, as with any loan, you sacrifice certain flexibility - if you take a mortgage, you have to pay $X per month no matter what, even if this month you'd rather spent it on a nice vacation. It's just that the city assumed that since the income stream comes from the citizens and not the city budget, they essentially got a billion dollars for free. But turns out it's not exactly so. It's not the fault of the investors though - it's the fault of those who made wrong assumptions on the deal. And those aren't some naive gullible simpletons, or at least those are not supposed to be in charge of billion-sized contracts in a megapolis like Chicago. One has to assume they were aware of the implications, and chose to get the cool $1.6 billion anyway.
Unfortunately, the implications were that the mayor involved joined the legal firm that negotiated this privatization shortly after his term ended.
It is worth noting that at no point was privatization of parking in his platform previously, and his approval rating dropped to record lows in large part to deals like this, but Chicago lacks a recall mechanism and he chose not to run.
We are also talking about a mayoral administration that operated with impunity. Despite contracts with the state and the FAA, the city used bulldozers to destroy the runways at a general aviation airport, stranding planes and its own fire department helicopters there. https://en.wikipedia.org/wiki/Meigs_Field
> Unfortunately, the implications were that the mayor involved joined the legal firm that negotiated this privatization shortly after his term ended.
This certainly looks very shady, but by itself doesn't change the financials on the deal. The claim above that this deal costs "a lot more" than a billion - I'd love to know how much and how did they know it.
Would you mind to walk us through your calculations, and share how did you discover that NPV of that income stream is a lot more than $1.6bn and what figure did you arrive at?
> being obligated to maintain the spaces as sold for 75 years
Technically - and as the court correctly pointed out - this is not the obligation. The obligation is to preserve the income stream. It is true that if the city gets rid of the spaces, it would be hard for it to preserve the income, but there could be options - like create more parking in different places, etc. Of course, when undertaking such an obligation, as with any loan, you sacrifice certain flexibility - if you take a mortgage, you have to pay $X per month no matter what, even if this month you'd rather spent it on a nice vacation. It's just that the city assumed that since the income stream comes from the citizens and not the city budget, they essentially got a billion dollars for free. But turns out it's not exactly so. It's not the fault of the investors though - it's the fault of those who made wrong assumptions on the deal. And those aren't some naive gullible simpletons, or at least those are not supposed to be in charge of billion-sized contracts in a megapolis like Chicago. One has to assume they were aware of the implications, and chose to get the cool $1.6 billion anyway.