When I was chatting to Rollie about a possible collaboration video my only requirement was the Climate Town team build a brick wall behind a door for that one gag.
Kudos to those 5 counsellors who voted against the deal in 2008. They were probably the only ones who remotely understood what was actually going down.
@@aceman0000099 Whilst corruption is always a possibility this seems more like the counsellors were railroaded and lacked the ability to understand the value of the asset they were selling and the clauses they were allowing in the contract.
Well, generally, it should be legal, as a government should be sufficiently free to make decisions. That they actually did it and didn't understand that they are selling out the foundation of a city for a few cents per dollar is the scandal here.
There should be a federal investigation into how this deal occurred, and who were the players moving the pieces around the board to make it happen. This is criminal levels of corruption that needs to be regulated and aggressively enforced.
I mean sure, but 50 of the largest 75 US cities are bankrupt. These deals were done because Chicago is bankrupt. There will probably be another terrible deal soon to cover the costs of pensions.
Do you have any idea how much it would cost to investigate every deal like this? And even if that happened, do you really think it will make any difference? The point here is that if you are bad at math you're going to get boned.
@@rockets4kids Guess who would have to pay for the costs of running such an investigation? The criminals liable for the crime in the first place. Similarly, even if it was astronomically high and the city had to foot part of the bill, it would still be an overwhelming cost savings in the long run due to the ROI gained from ownership of the meters again. It would absolutely make a difference, not just financially, but materially. The city would finally be able to change its infrastructure without incurring costs that make it out of reach for city proposals due to private ownership of the roads. The point here is that if you're bad at math, and someone uses that to maliciously take advantage of you, the State should step in, check the work, ensure you're not being taken advantage of, and protect you against predatory capitalists who are looking to use manipulative, dishonest, and corrupting tactics to finesse your money.
@@rockets4kids This is a terrible argument and @draunt7 is entirely correct in having deconstructed it so thoroughly. The only legitimate argument you could make is that the council was potentially just incompetent - but even _that_ should simply not allow one company to take advantage of the public like that; and even still, if the council was incompetent, that is still no reason to not investigate the deal and how it came about - the resolution just might be different, hopefully and necessarily leading to an overhaul of how politics are done in order to ensure that no such incompetent people can produce such harm again.
@@Merione There was a lot of conflict of interest regarding the deal. Especially the consultancy clients which former city representatives raked in after completing their terms. Extensively documented.
I moved to Chicago in early 2009 just after this ridiculous deal. When I first heard about it back then, I was appalled. I don't drive, so the cost of parking doesn't seem to affect me directly, but as this video explains, it does affect my quality of life in other ways like limits on improvements of transit corridors and bike infrastructure. The fact that we can't pedestrianize streets that would be ideal for it is a major hit to quality of life. Seeing this insanely horrible deal dissected and analyzed like this makes it even more depressing than it already was.
It does affect carless people, doesn't it? I thought he said that the city had to make up for whatever profit loss during covid, construction work that blocked the meters, etc.
It doesn't prevent infrastructure improvements. The city can tear out parking meters if they want, they just have to install new parking meters that are just as profitable, otherwise they pay the difference. The city can even benefit, if they clear out an abandoned lot and fill it with parking spots and parking meters, Morgan Stanley will pay them whatever money those parking meters earn for the next 75 years.
NO street is 'fit for pedestrianizing'. We NEED cities to be LASER FOCUSED on the needs of the MAJORITY who OWN MOTOR VEHICLES and use them to get around in the cities. Fullst op there. This "Use the metro, use a bike, use X and Y" is utopian bullshit that doesn't work in the real world.
Also, the fact a city can sign a billion dollar contract with two days to review is insane. This process usually takes years in pretty much all other forms of government.
@@_de_reve @_de_reve Isn't even limited to europe, even corrupt countries like Malaysia, get claw backs from these modern day robber barons like Goldman Sachs. Meanwhile US people just gotta take it up the butt...like healthcare...like education. US system let's the bottom 20% of their pop just rot away with drugs while replacing them with better foreigners. Sad really.
@@lonestarr1490 Yeah, not quite. Are you familiar with the tale of the German car toll system that was about to be implemented a few years ago? The minister in charge of transportation made it his hallmark policy despite every reasonable person from the opposition to the European Union screaming at him that it might be unlawful. He pushed it through, signed the contracts with a big conglomerate, and started implementing. Shockingly, it was deemed in breach of European law so everything had to be undone. In the end, the German federal administration paid about a quarter of a billion Euros in damages to the conglomerate but nothing happened to the minister. So, it might be technically forbidden but why not try it anyway. If nobody looks too close it's fine and even if it goes wrong, it's just tax payer money. No skin off his ass and it is known that he and/or some of his friends had friends that belonged to the conglomerate...
@@pozelujev But still, it was forbidden. That's what I said. Why Andi Scheuer is not facing charges for the immense damage he caused is beyond me, but it's definitely not due to a lack of regulation.
I work in property management for the office of rail in ct. I'm effectively capped at a 5 year license for a .007 acre of turn around space for a car wash. There is no way this deal went through without people knowing how bad it would be for Chicago. That city was sold out.
I have a hard time believing this was an honest mistake. Some on the council were fooled, others were corrupt. The public deserve to know who was which, and see consequences come to the people who sold their city out.
Oh yah, 100% there were corrupt people on that council who got a ton of money from this deal from Morgan Stanely. It could have even just been one person that was a good enough actor to get all of the people that were REALLY worried about the city not having enough money to vote for it.
@@SigFigNewton property taxes that price people out of having their own homes are in fact not great and the problem gets worse as real estate prices go up due to speculation, deliberate vacancies and lack of new affordable housing. If you're gonna levy taxes on property it shouldn't be to drive those that can barely afford their housing out. More targeted measures like higher taxes on vacant properties would be better, but they are even less likely to get passed, cause that would piss off developers and real estate speculators, i.e. rich people.
@@SigFigNewton how about don't ignore the current market situation when proposing new policies? If taxes are based on the value of the property and prices are rising then increasing that taxation further puts a lot of existing home owners in a difficult financial position. Not everyone has a secure, well paying job. As far as supply goes, there's a lot of vacant properties and a lot of development that is happening is in the wrong places or the wrong price segment for the majority of people so it doesn't actually help very much to alleviate the housing crisis. It's not just NIMBYs. Talking about supply and demand for a basic need is pretty cynical anyways. The demand for housing isn't elastic. As long as we have a society that thinks that it's okay for some people not to have a safe place to live because they aren't wealthy enough this cannot be solved, cause we're only trying to manage it enough to prevent people from rioting while still allowing some people to get rich at the expense of others as much as they can get away with.
Imagine being a city and entering a *75 year deal* with a private company on just about anything, with the private company having the power to do pretty much whatever they want and you not even having a realistic chance to read the contract. The circumstance that this is even allowed is absolutely insane.
I wonder how much money was moved underneath the table that made it fly through so easily. I guarantee you Morgan Stanley "lobbied" (lol bribed) a couple of those lawmakers.
To be fair, this is how a lot of cities in the west got off the ground, by leasing land to railroads so that they could get that sweet sweet shipping and passenger traffic. The deal in my hometown was a 101 year lease. Not defending Chicago, but is precedent for a very long lease like that
It's just a show put on by the 1%percent of our society. The people who are in on this are the type of people who would spit on my mom's there mom's graves for an extra 5cents. 75 years and being allowed to up charge consumers and citizens who have to park was just a Bonus. A lot of F -u-'s to the lower capitalist of America
@@CharlesBorngrebe You cannot compare leasing empty land to leasing existing infrastructure that's critical to the city functioning and with clauses resulting in you having to effectively pay more than you ever received for the lease.
When Matt ended up at home and the hot dogs he was holding turned into fish and chips, I lost it. These videos are always hilarious, and it's those kinds of details that make them brilliant. The fact that Morgan Stanley is willing to pay one billion upfront for that alone tells you the deal is gonna make them way more profit than that. When Morgan Stanley happily offered 1 billion the city should just go, "Oh yeah? Then I want triple that". And when he left office, Richard M. Daley left for a firm...that was part of the talks for the parking meters. The worst part is that this deal ruins the possibility that Chicago could make its streets less car-centric, and more a city for people, bicycles, and transit. This actually reminds me of a small town in Michigan called Bay City which sold their two of their four drawbridges, the Liberty Bridge and Independence Bridge, to a private corporation called United Bridge Partners. They were once tied to a Florida bridge that collapsed, the FIU pedestrian bridge which collapsed in March 2018 and killed six. The FIU bridge was being built by FIGG Bridge Design, a partner with United Bridge Partners. They decided to charge non-resident drivers who cross the drawbridges, four dollars (now 5.50 as of 2023). With context, one of the longest bridges in the US, the Mackinac Bridge, has a toll of four dollars (as of 2023) to cross the 5-mile bridge as opposed to...700 feet.
The mayor and council members can't even be in power for that long without an election, but they can still basically make a contract with a private company that future city governments can't overturn or nullify. It's completely undemocratic and they shouldn't have the power to do that.
@@bradhombre6912 Doing random Referendums for politically charged, single issues is a bad idea. Especially when they are done like Brexit. Regular ones are another matter.
Something that wasn't mentioned by this video, but Daley's nephew worked for Morgan Stanley and brokered the deal. Naked corruption was the impetus for this deal, which is why the contract uses the scuffed discount rate and the long term.
Also probably why the city council were given the high-pressure short sell on it, complete with "oooops, we've already spent some of the money from the proceeds we don't even have yet".
@@AbWischBar From Wikipedia: "Weeks after leaving office, Daley joined the international law firm Katten Muchin Rosenman LLP, one of the law firms to which he had awarded no-bid legal work as mayor. Katten Muchin Rosenman LLP had negotiated the city's much-criticized long-term lease of its parking meters, parking garages, and the Chicago Skyway."
Also, so no one is mislead by Rollie's sense of humor, Richard M. Daley was NOT an "impressionable, young mayor" but by 2008, a six-term career politician and member of the Daley crime family... I mean Daley political family.
Behold! The glory of privatization! How many times does this lesson need to be taught? Public goods have no business being held hostage by corporations.
Smaller errors have led to bigger revolutions. The fact that we have lost the freedom to enjoy a healthy life so billionaires can have more zeros in their bank indicates how fictional commerce has become.
As a Chicagoan myself, the best thing we can do to fight this is to utilize public transit, biking and walking instead of driving place if possible. The only way to beat car reliance is to offer great alternatives!
This should be a cautionary tale about letting corporations purchase control of public resources. Also a cautionary tale about how politicians shouldn't have the ability to solely make decisions that our grandchildren will pay the price for. The public should have had a say in their own streets being sold out from under them in perpetuity.
Yeah that's a dilemma. On one side, corporations who will capture profit however they can. And on the other side, politicians who are incompetent. Don't really want either running things.
@@username7763 Not really incompetent in this case, just with different values than the city itself. They captured a lot of private profit from the deal too, they just didn't do their job of representing the city. That's not incompetence, that's wilfully betraying your constituents. Big difference :D
Rofl ... srsly ... come to your senses ... this has happened a BILLION times before and it always had a bad outcome and people are still doing it ... at this point ... there's no lesson to be learned or pity to be had, it's just 100% deserved for the american populace
That's the state being cannibalized by corporations. The end goal of unregulated capitalism will be corporations taking all your tax revenue. Just think about it. Chicago made money on them parking meters prior to 2008. Now they have lost all that revenue and have to pay fees to Goldman Sachs. A $20 million revenue stream is now costing you $50 million a year. $30 million fees + $20 million lost revenue. Multiply that by 75 years and you get a $3,750,000,000 million dollar loss over 75 years. How come 40 councillors couldn't do basic math?? Short term gains for long term consequences. And don't forget that Chicago could have raised the prices for parking. Even if they doubled it it would have been $40,000,000 revenue a year.
@@Oroberus You're right, the American populace totally deserves the consequences of corrupt politicians from past generations that they didn't even vote for.
I visited the US first time these past two weeks and stayed in Dallas/Fort Worth. I'm from Europe and as good or bad as it might be here I really don't get how people there actually survive. I mean I have seen your videos about how car centric the US is but to see it first hand is mind blowing. As far as deals with private companies go here too you often hear how companies will only invest in something if the government will absolutely guarantee them a certain revenue. That basically ends up in government deals becoming a zero risk investment. And no one but the government will do stupid deals like that.
Well you also visited the worst big city in America. Car-centric, hot, humid, smelly, water tastes terrible etc. What you said is still correct though.
The city of Chicago should carbon tax each parking meter in the city that isn't owned by the city and pass a law prohibiting parking rate hikes that are greater than inflation to squeeze those greedy slugs out of the city.
I bet the contract means that if they do increase tax on the spaces they will have to pay compensation to Morgan Stanley. Morgan Stanley probably thought of that one.
The city of Chicago should just claw back everything bit by bit with eminent domain. "Sorry, we want to build a bike lane here and need to remove parking spaces"
wow that was a ridiculously bad deal pro-tip: if anyone is trying to pressure you to make a decision _now_ without giving you time to think it through it is usually a scam and this does not change if the person doing so is a bank.
This is why you don't deal with big banks, credit unions are much more community focused and not profit focused. Also the first indicator of a phishing email is urgent language to get you to act without thinking. Its a trademark of many types of scams, act now so you don't read the fine print or think rationally and realize this is a terrible idea.
Cool video! On calculating the discount rates: I believe in this case the inflation rate should not have been included. The value of the parking spaces is not going down as fees rise compensating (or overcompensating) the inflation rate.
@@aceman0000099it's not stupidity, each and every person who voted for this benefited personally and privately from their choice. Morgan Stanley didn't rob the city, it's government did.
@@nes999 The US government actually directly owns almost all the student loans in America. Since 2010, the US government has directly issued all student loans. 95% (1.5 trillion of 1.6 trillion total) of student debt is owned by the Department of Education.
They took on some of the companies risk too Like having to compensate for street work is straight bullshit I bet they would want compensation for terrible streets too since it loses then money 🙄
Okay that "opening the door" bit was genuinely some of the best visual comedy I've seen on youtube for a while. Also I gotta say it really shouldn't take a business genius to figure out the deal is probably bad when the financial version of satan shows up to give you a deal, and only gives you two days to respond to a massive document.
Man, I would hope that a major metropolitan city would have a mandatory (public) contract review period for anything more than, say, a million dollars.
Love the saying “tough beans, hard cheese, better luck next time” and will be incorporating that into my conversations somehow. There’s a phrase I saw on Tiktok “I’m a train girl forced to live in a car world” and I stand by that. Car centric infrastructure is the bane of my existence, parking lots are just a huge part of that. Imagining all the land we’d have for housing or food or community if we didn’t prioritize cars makes me wish for better city planning.
It's so ridiculous, we sold off all this for a sliver of profit. Now it's a huge barrier to improving our streets. I would love if we could push to get rid of this scam of a deal. I'd also like to add that being disabled, these spots never prioritize us and just make our lives harder since using more space for handicap parking is bad for revenue
If it has to be done legally, then increase environmental regulations on street design to force Morgan to either tear up their own profit incentive or face a huge fine.
Lessons learned: don't deal with fkn MStan, avoid bankers in general, don't do deals over 20y, don't decide on billions in 2 days, read the fkn contract, don't hire crooks
One hour and two minutes of my life gone to watching videos on parking in a country I’ve never lived in. Life well spent! Keep up the amazing work, Rollie! Now to Matt’s channel.
Sadly, Chicago is not alone with those disastrous and honestly undemocratic deals to privatise public domains in general. For example in germany the privatisation of rail services, telecommunication, postal services or the water supply contractor of Berlin (which later got bought "back" at a premium not by the city, but be some of its wealthy inhabitants). Those deals always follow the capitalist principle of "privatize wins and socialize losses". But the Chicago deal is imho so outragiously bad and rushed that it should be subject to litigation.
As a German it drives me nuts how bad our railway and internet infrastructure are especially when you compare them to much poorer EU countries. Privatization is ALWAYS a bad deal in the long run especially for the citizens.
Hi Rollie! I just found this channel from your interview on MKBHD and I realized that we know each other! Do you remember in summer of 2006 we worked together at Peaceful Valley Scout Ranch, and we discovered we share the same birthdate so we borrowed the camp cannon and fired it in the staff camp at 5 AM on our birthday as a prank? Such a fun summer, glad to see how awesome you are doing with the channel! Your content is excellent!
Would it be legal for the city to hold a referendum to rip up the deal? It's kinda ridiculous for one sitting of the city council to make such a long-term decision that cannot be reversed even when future sittings of the same city council would (presumably) want to do so
if this gets enough heat in the media (but mind you, top down schemes don't work well in those situations) or if enough people follow the recommendations at the end of the video (go to meetings, write to your local representative, etc.) then something can be done.
They can't claw it back because they sold it, it's Morgan Stanley's property now so to get it back they'd have to prove Morgan Stanley committed fraud or something similar, or else it's a constitutional violation. But they can buy it back, or else strike some sort of goodwill deal with Morgan Stanley.
@@Apollo440 No. I lived in Chicago when this contract was done and still do today. It is a legal contract no matter how crap it is and how much people then didn't want it and how much people now hate it. You don't get to just tear up legal contracts because you don't like them.
Any public private relationship needs to have a clause that allows one party to leave when it's not beneficial. A politician could literally sell off whatever he wants and the next in line has to deal with fallout.
@@alecksonnyamwaya it's definitely more complicated than that lol. Fascism is actually a bit hard to pin down because it's not really one consistent ideology, but one way of putting it is that the strong should stick together and take from the weak State/corporate mergers are definitely a part of fascism but just doing PPP isn't inherently fascist. It's very easily corrupt and not in the public interest though, governments often try to portray it as saving money when really I think they're just less accountable and end up costing more later because they cut corners and underestimate their costs
@@DevynCairnsit's not even about cutting corners and underestimating costs - endeavors 100% publicly undertaken can be guilty of that too. I totally agree with you though about the part where there seems to be little to no accountability (which there would likely be otherwise). But to me the most obvious problem is literally just the profit motive. For an equal quality of work, you either pay only for the work (public) or you pay for the work and for some people to pocket as much money as possible (private). It is always going to cost much more, if not immediately, then in the medium-long term to unnecessarily fill the pockets of rich people, middlemen leeches. If the cost is magically the same, you can be sure there is indeed a whole bunch of corner-cutting going on.
Wow ! The city could have taken these same steps that Morgan Stanley did and used the profits for the city, and retained control. Why can’t people figure out businesses don’t enter into deals unless they see profits for themselves. Great video.
Yeah that's what blows my mind and that's why I think that Mayor Daley knew exactly what he was doing and stood to benefit in some way that is not visible and I especially think that because of the overacting that he did when he was selling it to the city council. I mean a lot of the times I only sort of half watch these videos but I kind of was pulled out of my half attention because he was so blatantly fake in that act and it just made me think man this guy has more than just the city's budget riding on this deal this is personal. And I mean it doesn't take 2 seconds to realize what a screw job this is and that they basically stepped over a dollar to save a dime.
The reason is simple: Short-term profits. Ppl that make such deals for their city, state, country or company do not think what is best in the long run for the city, state, .... but only what is profitable for them NOW. What makes them look good or shine. The treasurer of the city likely said to himself, "How can I get rid of the deficit THIS YEAR"
@@angelainamarie9656 On his wikipedia page it plainly states that he got a post-mayoral job out of it: Daley joined the international law firm Katten Muchin Rosenman LLP, one of the law firms to which he had awarded no-bid legal work as mayor. Katten Muchin Rosenman LLP had negotiated the city's much-criticized long-term lease of its parking meters, parking garages, and the Chicago Skyway.
This was done by the mayor to pretend the city had balanced budgets and not raise taxes to fill budget gaps. This same mayor spent 10 years skipping paying the city’s share into the teachers pension which now has billions in IOU’s hobbling the city. He also leased a city owned tollway for a similar amount of money for a similar length of time. Tolls went up on the roadway and the company made back their investment long ago.
Pleased to hear about local politicians in Eindhoven, watching videos about how US cities have failed Americans. Such thoughtful thinking and global connectedness. Now my partner and I are definitely looking forward to visiting Eindhoven next spring.
I never thought that asphalt for human transportation would be a source of the "man made horrors beyond my comprehension" type feeling, but of course, Chicago don't disappoint as per usual.
Man, not exactly what you're talking about, but I would definitely classify some of the public roads around here as "man made horrors." They bend my suspension a new direction every week.
It's so ironic that the city was so financially desperate that they had to take a bad deal from a bank that helped cause the financial crisis in the first place.
@@goullet86 yeah I see what you mean. I just think it was crazy that this was allowed to happen against the backdrop of the GFC. Everyone hated banks back then.
Amercia doesnt dissapoint with its over the top, late stage capitalism, dystopic shenaningans. This is truely hard to comperhand for a non-american like myself. Great video!
Don't look into the role of SERCO (UK corporate security service) and their role in managing offshore internment camps and private policing in Australia.
6.5$/h for 200 sqf are 1300$ per months business hours and 4680$ per month if you have to pay every hour around the clock. The median home price is 263$/sqf in chicago. So with the monthly business hour revenue after about 5 months you could have bought an equivalent area of living space for the parking costs. And if you say "but there are many levels of living area per land area" you still get a good deal as the average floor count of houses in chicago is only 1.5 floors. So every eight months you buy the actual land your car parks on again and again. 263$/sqf * 1.5 * 200sqf/parking lot = 78900$ per parking lot. As per the Income Tax Act depreciation rate applicable for residential premises is 5% and multiplied this with the an interest rate gives you the lease rate before sales tax. Anual depreciation is then 3945$, monthly is 328.75$ and for business hours its 1.64$/h. The hourly interest rate therefore is about 396%!!! So no, i don't think its a fair price for parking!
The banks definitely pulled a stunt on Chicago, but the part of the contract that is wildest to me is that, after already having a rate that makes it a good deal if earnings go down they still have a "but if we don't make money you have to pay us" clause in it. I mean the idea that they could not make a lot of money is already wild to me - they can control what they charge and it definitely was subsized by not charging as much as it was worth, so why would you not make money? Also that revenue was based on previous earnings and those previous earnings happened while these spots were sometimes blocked. And that's not all - when they are earning more than projected Chicago still has to reimburse them for missed revenue when a street is temporarily blocked? Surely they could have at least gotten the clause to say "if the revenue is below X/year (or Y/month), then (and only then) Chicago has to pay for meters that had been blocked during that year/month at a rate of so and so until the revenue threshhold has been reached". As it is they are basically triple dipping on parking spots being blocked which is just ludicrous.
Mayor Daley wasn’t about protecting the city when he made this boneheaded deal. He wanted new revenue to cover his spending. Which also involved not paying into the teacher pensions fund for a decade; leaving it billions in obligations now having to be made up. And he retired just around the time all this parking money was spent and before the pension crap hit the fan.
I would say if someone took this into a fair and impartial arbitrator and said hey look you know we the city were sold this deal on the basis that we need 150 million right then. So that's what we were given in compensation for possession of our meters and now we feel like Morgan Stanley and this other small have made all that money back and more and really the terms of the deal seem to have been fulfilled you know they gave us money they got money back and the rest of the deal seems to have been done very dishonestly without informing the people who would really be impacted and I think they could probably nullify it on that basis. And if not we really need a law in this country a federal level law that makes this kind of scam illegal regardless of when it started or who is currently getting away with it.
I think the clause makes sense. If it wasnt in there chicago could just put every meter out of commission and make Stanley suffer for it. Or just mark every parking spot for renovation and just stall actually reopening it for 75 years. Everything would be fine if they just sold the rights for 5 years, then once you regain control over parking you can then push through all the maintenance youve been delaying.
As bad as the rate is, the decision to have the deal last for 75 years is mind boggling. Since from the sound of things, that was already set BEFORE the actual offer was made! 15 years even would have been plenty, and would be giving them control of their own streets well...NOW.
Love your videos. You absolutely nail it and I could probably watch you talk about paint drying, but I appreciate that you talk about much more important things, and do it without making me absolutely depressed. Only slightly depressed.
@@nevreiha Some cities have fake buildings with fake doors and windows that hide electrical infrastructure and such because they're more secure and less disruptive to the landscape than an exposed substation, for example. Just search for "fake buildings". I don't know whether or not those would normally have doors that actually open, but it seems possible that that's what that is.
The problem with using the discount rate formula as done here for the right to sell a good without fixed pricing is that it makes the ludicrous assumption that the price will be constant. Even if we assume that the City of Chicago was optimally pricing its meters prior to the sale (ignoring the fact that Morgan-Stanley's price hike dispels with that assumption), the optimal price of parking should be expected to roughly rise with inflation. This means that in principle inflation should NOT be included in the discount rate calculation, only the cost of borrowing.
Chicago should probably bite the bullet and build some underground or overground garages, lease them for the remainder of the contract, and get their streets back.
It’s insane that this was even considered in a city with decent public transit, but it’s painfully obvious that Morgan Stanley knew what they were doing.
They are finance firm , they have some of the best mind on this planet in field of finance. any analyst from there would have done understood this maths
Fighting for transit and bike infrastructure in my city (Denver) is already hard enough because our government doesn't want to do anything! Imagine city council being able to throw up their hands and say "sorry, we literally can't do anything"! Not a doctor but I'm pretty sure my blood pressure rose in this 31 minutes!
Brasil is also mastering the art of signing really bad public-private partnerships!! When I was there this summer, I studied a city that signed a contract with Enel, giving them all the benefits of the city's street parking, in exchange for... changing public lighting (for LED light bulbs-so energy efficient!), installing some cameras (with face recognition-be careful, fellow criminals!), and buying 2 e-bikes for the police (that's not a joke, that's in the deal). So yeah, stay away from public-private partnerships...
This is an excellent video explainer! Love the links provided to all the sources- including relevant court transcripts. As a Chicagoan, I wish this was more common knowledge or at least something spoken about more often.
What if the city threatens to stop enforcing parking tickets? Or if not allowed, use a creative solution preventing enforcement of parking tickets, like a privacy law, or limiting parking attendants, or allowing cars to cover their plates while parked, etc.
I wonder if the contract guarantees easy access to the parking spots. Otherwise they could close down the streets, build bike lanes and pedestrian areas, and just leave the spots as they are. Maybe require some difficult to get permits to drive there in order to not make them entirely inaccessible.
I love Chicago but this was a terrible deal when it was made. As a cyclist and transit rider who doesn't own a car it's infuriating to watch these decisions being made. Banks and corporations own everything in this country and there's very little being done to improve quality of life for citizens. However, this year they have added a lot of bike lanes which is a step in the right direction. ❤ Thx for the coverage on this!
Chicago should dedicate one lane of every multi lane road to a dedicated bus and bike lane, or light rail, and pedestrianize the other lane. This is the "we technically didn't touch the parking spots and fulfilled our contractual requirements but, whoopsie poopsie nobody drives here anymore" approach
@@GotoHere Chicago rarely gets that cold anymore. And buses ideally shouldn't take that long to show up. If the CTA functioned correctly, you shouldn't have to wait more than 5 or 10 minutes, especially on busy routes. But right now, the CTA is a fucking disaster.
yeah, no, the bank will just give that bill to the city and not only make it pay for the whole thing plus installing. BUT ALSO for the lost revenue due to the broken meter. For this kinda things you should wait for midnight or so. To make sure there is no one there. And start a completely accidental fire in their offices. I mean, you definately shouldn't do that, offices are extremely flammable and those have to be paid for the bank
Because nothing like corruption to shut down rational thought, essentialy those that made the deal get free money while the future councils and residents have to deal with the consequences, America in a nutshell
I was young when this happened (high school) and didn’t really understand what exactly happened but hoooooly cow this has to be one of the most corrupt business deals in American history.
One time I drove in on the Chicago tollway which is also privately owned. I went online and paid, after several weeks I got a bill saying I had missed a few tolls... That somehow weren't attached to my tag at that time. The bill went up for two tolls to over 265. I told them they can come get it luckily I don't live there
Any day we get a new Climate Time episode is a really good day. I appreciated the explanation of discount rates, but it's still just as confusing as it was in college 💀
I know that this series is usually about things that suck, but I’d like to see you do a video about Houston’s promising future with public transportation
I don't how it's possible the two informative and inexplicably and unreasonably funny TH-camrs collabed but I'm here for it. This will go down as an instant classic Rollie, I can feel it.
Democrats know their voters are math challenged. 50% of Chicago students don’t graduate high school. 90% don’t meet basic national standards in math, reading and writing. In other words dumb sheep voting for racist corrupt democrats.
26:00 The most important part to me seems to be to never enter a contract for more than a decade at a time, let alone a lease that the private party can never realistically be found in breach of for almost a freaking century.
Sssssh, don't give our PM anymore stupid ideas. He's already trying to sell off HS2 land to prevent sucessive governments from undoing his cancellation.
Selling the government to private companies is usually something governments at least pretend they aren't doing. It's almost refreshing to see an example of them being honest about it.
Getting involved in local politics is great, but there are a number of orgs here in Chicago who do solid organizing too! Better Streets Chicago, Active Transportation Alliance, Commuters Take Action, etc!
I really enjoy that Portland, Oregon has their parks department run parking enforcement. Anytime you get a fine for a parking violation you could just imagine a portion of that is a donation to the parks department! ;^)
@@salemite , funny I live here and I didn't know that. I do like it though. All though, who knows whats gonna happen with the new city goverment setup that is unsurprisingly turning into a mess already.
I just happened to be on a trip in Chicago one day and saw Rollie prepping for this. Looking back, having a 6'9" guy yell your name while walking right at you might have been a little alarming. Thanks for chatting! Probably a good thing you didn't mention Matt Parker, I might have followed you to see him.
Thanks for the Premiere! Fantastic stuff as always. Uncovering the truth about politician inadequacy, hidden in plain sight. And thanks to @Stand-up Maths for the exciting whiteboard and Excel sheet magic!
Dude, since Jon Stewart left the Daily Show I have not found "serious" reporting of such depressing subjects delivered in coat of such sweet sugar as good as this channel. Please! don't ever stop or change or leave, Rollie!
I know the state of Indiana did the same thing with their toll road. Not only did Indiana burn up their money significantly sooner than they expected but they also can't earn a single dime off the toll road until about 2074.
When I was chatting to Rollie about a possible collaboration video my only requirement was the Climate Town team build a brick wall behind a door for that one gag.
You should have also required more hotdogs. Such a wasted opportunity :(
Never expected to see a Rollie Williams + Matt Parker collaboration. Joyous day!
You should have
good choice, it was hilarious.
it was very funny thank you
Kudos to those 5 counsellors who voted against the deal in 2008. They were probably the only ones who remotely understood what was actually going down.
No doubt there were plenty more that fully understood, but were getting their own sweet side of the deal under the table.
@@aceman0000099 Whilst corruption is always a possibility this seems more like the counsellors were railroaded and lacked the ability to understand the value of the asset they were selling and the clauses they were allowing in the contract.
@@robsengahay5614 yes that's also true. Maybe if they had more time and the press got to read it as well or something it would stop them taking it
Knowing all that now, probably many of the counselors who voted for the project now regret... not to have asked for some personal money in return
Wonder if those 5 councellors were reelected.
The fact that making a deal like that is even legal is insane. Every person in that city govt will be dead when the deal is STILL in effect
Not necessarily. There may be some 20 year old intern who will still be alive
right? why do people not get a say in something that affects everyone so severely
Welcome to capitalism ...
Well, generally, it should be legal, as a government should be sufficiently free to make decisions. That they actually did it and didn't understand that they are selling out the foundation of a city for a few cents per dollar is the scandal here.
There should be a federal investigation into how this deal occurred, and who were the players moving the pieces around the board to make it happen. This is criminal levels of corruption that needs to be regulated and aggressively enforced.
I mean sure, but 50 of the largest 75 US cities are bankrupt. These deals were done because Chicago is bankrupt. There will probably be another terrible deal soon to cover the costs of pensions.
Do you have any idea how much it would cost to investigate every deal like this? And even if that happened, do you really think it will make any difference? The point here is that if you are bad at math you're going to get boned.
@@rockets4kids Guess who would have to pay for the costs of running such an investigation? The criminals liable for the crime in the first place. Similarly, even if it was astronomically high and the city had to foot part of the bill, it would still be an overwhelming cost savings in the long run due to the ROI gained from ownership of the meters again. It would absolutely make a difference, not just financially, but materially. The city would finally be able to change its infrastructure without incurring costs that make it out of reach for city proposals due to private ownership of the roads. The point here is that if you're bad at math, and someone uses that to maliciously take advantage of you, the State should step in, check the work, ensure you're not being taken advantage of, and protect you against predatory capitalists who are looking to use manipulative, dishonest, and corrupting tactics to finesse your money.
@@rockets4kids This is a terrible argument and @draunt7 is entirely correct in having deconstructed it so thoroughly. The only legitimate argument you could make is that the council was potentially just incompetent - but even _that_ should simply not allow one company to take advantage of the public like that; and even still, if the council was incompetent, that is still no reason to not investigate the deal and how it came about - the resolution just might be different, hopefully and necessarily leading to an overhaul of how politics are done in order to ensure that no such incompetent people can produce such harm again.
@@lVideoWatcherl You clearly missed the entire point of this video.
As a resident of Las Vegas, Nevada, I have to tip my hat to Chicago for showing us all how corruption is done in the Big League.
How is this corruption? In this case they weren't corrupted by anyone, they were just very VERY stupid to willingly take a blatantly awful deal.
@@Merione There was a lot of conflict of interest regarding the deal. Especially the consultancy clients which former city representatives raked in after completing their terms. Extensively documented.
@@user-be1jx7ty7n Mmm, revolving doors. How to do kickbacks and bribes without looking like you're doing kickbacks and bribes.
Next Chicago will build a spherical building with the wrong value of pi. (Wait, what channel is this?)
@@standupmaths maybe next year get some super accurate surveying tools and derive pi from the physical dimensions of the Las Vegas sphere-segment
I moved to Chicago in early 2009 just after this ridiculous deal. When I first heard about it back then, I was appalled. I don't drive, so the cost of parking doesn't seem to affect me directly, but as this video explains, it does affect my quality of life in other ways like limits on improvements of transit corridors and bike infrastructure. The fact that we can't pedestrianize streets that would be ideal for it is a major hit to quality of life. Seeing this insanely horrible deal dissected and analyzed like this makes it even more depressing than it already was.
It does affect carless people, doesn't it? I thought he said that the city had to make up for whatever profit loss during covid, construction work that blocked the meters, etc.
It doesn't prevent infrastructure improvements. The city can tear out parking meters if they want, they just have to install new parking meters that are just as profitable, otherwise they pay the difference. The city can even benefit, if they clear out an abandoned lot and fill it with parking spots and parking meters, Morgan Stanley will pay them whatever money those parking meters earn for the next 75 years.
@@barnmaddowhat you're describing is literally preventing infrastructure improvements
I used to park, take my plates off, and cover my Vin number. I always watched the meter maids have a bitch fit.
NO street is 'fit for pedestrianizing'. We NEED cities to be LASER FOCUSED on the needs of the MAJORITY who OWN MOTOR VEHICLES and use them to get around in the cities.
Fullst op there.
This "Use the metro, use a bike, use X and Y" is utopian bullshit that doesn't work in the real world.
Also, the fact a city can sign a billion dollar contract with two days to review is insane. This process usually takes years in pretty much all other forms of government.
for european standards this seems fuckin dystopian ngl.....
@@_de_reve @_de_reve Isn't even limited to europe, even corrupt countries like Malaysia, get claw backs from these modern day robber barons like Goldman Sachs.
Meanwhile US people just gotta take it up the butt...like healthcare...like education.
US system let's the bottom 20% of their pop just rot away with drugs while replacing them with better foreigners. Sad really.
@@_de_reve Something like this would be outright forbidden here.
@@lonestarr1490 Yeah, not quite. Are you familiar with the tale of the German car toll system that was about to be implemented a few years ago? The minister in charge of transportation made it his hallmark policy despite every reasonable person from the opposition to the European Union screaming at him that it might be unlawful. He pushed it through, signed the contracts with a big conglomerate, and started implementing. Shockingly, it was deemed in breach of European law so everything had to be undone. In the end, the German federal administration paid about a quarter of a billion Euros in damages to the conglomerate but nothing happened to the minister.
So, it might be technically forbidden but why not try it anyway. If nobody looks too close it's fine and even if it goes wrong, it's just tax payer money. No skin off his ass and it is known that he and/or some of his friends had friends that belonged to the conglomerate...
@@pozelujev But still, it was forbidden. That's what I said.
Why Andi Scheuer is not facing charges for the immense damage he caused is beyond me, but it's definitely not due to a lack of regulation.
As a Chicagoan, this is the most embarrassing thing about my city. Fox News will make you think it's rampant violent crime. But it's actually parking.
Don't feel too bad. America got even more corrupt States. Remember, you live in a business, not a country.
Chiraq
Parking in any major city is becoming more and more like chitown everyday.
Really? THAT is the most embarrassing thing? This is just one symptom of the corruption that is the Democrat party machine.
@@thndr_5468 absolutely no one who lives in Chicago calls it that.
I work in property management for the office of rail in ct. I'm effectively capped at a 5 year license for a .007 acre of turn around space for a car wash. There is no way this deal went through without people knowing how bad it would be for Chicago. That city was sold out.
I have a hard time believing this was an honest mistake. Some on the council were fooled, others were corrupt. The public deserve to know who was which, and see consequences come to the people who sold their city out.
You need more than justice and consequences the councillors today need to undo it as well.
Oh yah, 100% there were corrupt people on that council who got a ton of money from this deal from Morgan Stanely. It could have even just been one person that was a good enough actor to get all of the people that were REALLY worried about the city not having enough money to vote for it.
It's crazy that we really have to weigh: Was is corruption, or stupid voters? @@SigFigNewton
@@SigFigNewton property taxes that price people out of having their own homes are in fact not great and the problem gets worse as real estate prices go up due to speculation, deliberate vacancies and lack of new affordable housing. If you're gonna levy taxes on property it shouldn't be to drive those that can barely afford their housing out. More targeted measures like higher taxes on vacant properties would be better, but they are even less likely to get passed, cause that would piss off developers and real estate speculators, i.e. rich people.
@@SigFigNewton how about don't ignore the current market situation when proposing new policies? If taxes are based on the value of the property and prices are rising then increasing that taxation further puts a lot of existing home owners in a difficult financial position. Not everyone has a secure, well paying job.
As far as supply goes, there's a lot of vacant properties and a lot of development that is happening is in the wrong places or the wrong price segment for the majority of people so it doesn't actually help very much to alleviate the housing crisis. It's not just NIMBYs.
Talking about supply and demand for a basic need is pretty cynical anyways. The demand for housing isn't elastic. As long as we have a society that thinks that it's okay for some people not to have a safe place to live because they aren't wealthy enough this cannot be solved, cause we're only trying to manage it enough to prevent people from rioting while still allowing some people to get rich at the expense of others as much as they can get away with.
Imagine being a city and entering a *75 year deal* with a private company on just about anything, with the private company having the power to do pretty much whatever they want and you not even having a realistic chance to read the contract. The circumstance that this is even allowed is absolutely insane.
I wonder how much money was moved underneath the table that made it fly through so easily. I guarantee you Morgan Stanley "lobbied" (lol bribed) a couple of those lawmakers.
To be fair, this is how a lot of cities in the west got off the ground, by leasing land to railroads so that they could get that sweet sweet shipping and passenger traffic. The deal in my hometown was a 101 year lease. Not defending Chicago, but is precedent for a very long lease like that
It's just a show put on by the 1%percent of our society. The people who are in on this are the type of people who would spit on my mom's there mom's graves for an extra 5cents. 75 years and being allowed to up charge consumers and citizens who have to park was just a Bonus. A lot of F -u-'s to the lower capitalist of America
@@CharlesBorngrebe
It was a lease combined with a development.
It's always long-term. Don't compare the two.
@@CharlesBorngrebe You cannot compare leasing empty land to leasing existing infrastructure that's critical to the city functioning and with clauses resulting in you having to effectively pay more than you ever received for the lease.
When Matt ended up at home and the hot dogs he was holding turned into fish and chips, I lost it. These videos are always hilarious, and it's those kinds of details that make them brilliant. The fact that Morgan Stanley is willing to pay one billion upfront for that alone tells you the deal is gonna make them way more profit than that. When Morgan Stanley happily offered 1 billion the city should just go, "Oh yeah? Then I want triple that". And when he left office, Richard M. Daley left for a firm...that was part of the talks for the parking meters. The worst part is that this deal ruins the possibility that Chicago could make its streets less car-centric, and more a city for people, bicycles, and transit.
This actually reminds me of a small town in Michigan called Bay City which sold their two of their four drawbridges, the Liberty Bridge and Independence Bridge, to a private corporation called United Bridge Partners. They were once tied to a Florida bridge that collapsed, the FIU pedestrian bridge which collapsed in March 2018 and killed six. The FIU bridge was being built by FIGG Bridge Design, a partner with United Bridge Partners. They decided to charge non-resident drivers who cross the drawbridges, four dollars (now 5.50 as of 2023). With context, one of the longest bridges in the US, the Mackinac Bridge, has a toll of four dollars (as of 2023) to cross the 5-mile bridge as opposed to...700 feet.
Cities shouldn't be able to sell large assets without a referendum to help prevent these types of scenarios. Crazy situation. Great video!
Referendums aren’t a guaranteed way to avoid bad decisions. Look at Brexit.
@@bradhombre6912Yes, but it's at least another chance to keep these types of scenarios from happening
Maybe cities should have similar setup as our federal government to have 3 sets of checks on huge deals like this.
The mayor and council members can't even be in power for that long without an election, but they can still basically make a contract with a private company that future city governments can't overturn or nullify. It's completely undemocratic and they shouldn't have the power to do that.
@@bradhombre6912 Doing random Referendums for politically charged, single issues is a bad idea. Especially when they are done like Brexit. Regular ones are another matter.
Something that wasn't mentioned by this video, but Daley's nephew worked for Morgan Stanley and brokered the deal. Naked corruption was the impetus for this deal, which is why the contract uses the scuffed discount rate and the long term.
If that can be proven it should actually allow them to make the deal null and void.
@@AbWischBaryes but that would requiere politicans that are not corrupt and a lot of court time probably
Also probably why the city council were given the high-pressure short sell on it, complete with "oooops, we've already spent some of the money from the proceeds we don't even have yet".
@@AbWischBar From Wikipedia: "Weeks after leaving office, Daley joined the international law firm Katten Muchin Rosenman LLP, one of the law firms to which he had awarded no-bid legal work as mayor. Katten Muchin Rosenman LLP had negotiated the city's much-criticized long-term lease of its parking meters, parking garages, and the Chicago Skyway."
Also, so no one is mislead by Rollie's sense of humor, Richard M. Daley was NOT an "impressionable, young mayor" but by 2008, a six-term career politician and member of the Daley crime family... I mean Daley political family.
Behold! The glory of privatization!
How many times does this lesson need to be taught? Public goods have no business being held hostage by corporations.
Smaller errors have led to bigger revolutions. The fact that we have lost the freedom to enjoy a healthy life so billionaires can have more zeros in their bank indicates how fictional commerce has become.
As a Chicagoan myself, the best thing we can do to fight this is to utilize public transit, biking and walking instead of driving place if possible. The only way to beat car reliance is to offer great alternatives!
Uber rickshaw
Yes, great suggestion.
The bankers get minimum money from the city, so they still get a cut.
🚴♀️💪🏽🌳
Except they wrote guaranteed payments into the contract so the city is always paying for any "shortages".
*agrees in Dutch*
Yeah all this does is shift payments from private citizens to the city.
They got hosed.
This should be a cautionary tale about letting corporations purchase control of public resources. Also a cautionary tale about how politicians shouldn't have the ability to solely make decisions that our grandchildren will pay the price for. The public should have had a say in their own streets being sold out from under them in perpetuity.
Yeah that's a dilemma. On one side, corporations who will capture profit however they can. And on the other side, politicians who are incompetent. Don't really want either running things.
@@username7763 Not really incompetent in this case, just with different values than the city itself. They captured a lot of private profit from the deal too, they just didn't do their job of representing the city. That's not incompetence, that's wilfully betraying your constituents. Big difference :D
Rofl ... srsly ... come to your senses ... this has happened a BILLION times before and it always had a bad outcome and people are still doing it ... at this point ... there's no lesson to be learned or pity to be had, it's just 100% deserved for the american populace
That's the state being cannibalized by corporations.
The end goal of unregulated capitalism will be corporations taking all your tax revenue.
Just think about it.
Chicago made money on them parking meters prior to 2008.
Now they have lost all that revenue and have to pay fees to Goldman Sachs.
A $20 million revenue stream is now costing you $50 million a year.
$30 million fees + $20 million lost revenue.
Multiply that by 75 years and you get a $3,750,000,000 million dollar loss over 75 years.
How come 40 councillors couldn't do basic math??
Short term gains for long term consequences.
And don't forget that Chicago could have raised the prices for parking. Even if they doubled it it would have been $40,000,000 revenue a year.
@@Oroberus You're right, the American populace totally deserves the consequences of corrupt politicians from past generations that they didn't even vote for.
I visited the US first time these past two weeks and stayed in Dallas/Fort Worth. I'm from Europe and as good or bad as it might be here I really don't get how people there actually survive. I mean I have seen your videos about how car centric the US is but to see it first hand is mind blowing. As far as deals with private companies go here too you often hear how companies will only invest in something if the government will absolutely guarantee them a certain revenue. That basically ends up in government deals becoming a zero risk investment. And no one but the government will do stupid deals like that.
Correction: no one but corporate stooges who have been installed in the government will do stupid deals like that.
@@VitalVampyr
I suspect some of the officials involved got kickbacks. Possibly with stock and not money?
Well you also visited the worst big city in America. Car-centric, hot, humid, smelly, water tastes terrible etc. What you said is still correct though.
The city of Chicago should carbon tax each parking meter in the city that isn't owned by the city and pass a law prohibiting parking rate hikes that are greater than inflation to squeeze those greedy slugs out of the city.
Yup, time to jack up the "revenue generated through city infrastructure" tax to 90%.
I bet the contract means that if they do increase tax on the spaces they will have to pay compensation to Morgan Stanley. Morgan Stanley probably thought of that one.
Wait till you hear Morgan-Stanley is more powerful than Chicago or the entire state of IL and they stand zero chance in court if they do ANYTHING.
good ideas but it all depends on what is in that detailed privatized contract.
The city of Chicago should just claw back everything bit by bit with eminent domain. "Sorry, we want to build a bike lane here and need to remove parking spaces"
wow that was a ridiculously bad deal
pro-tip: if anyone is trying to pressure you to make a decision _now_ without giving you time to think it through it is usually a scam and this does not change if the person doing so is a bank.
Banks are really just _professional_ scammers in a scenario like this :P The corruption is palpable.
This is why you don't deal with big banks, credit unions are much more community focused and not profit focused.
Also the first indicator of a phishing email is urgent language to get you to act without thinking. Its a trademark of many types of scams, act now so you don't read the fine print or think rationally and realize this is a terrible idea.
@@jasonreed7522factssss Golden1 in california is working wonders for my community!
@@LuaanTi Banks have always been a scam actually
Cool video!
On calculating the discount rates: I believe in this case the inflation rate should not have been included. The value of the parking spaces is not going down as fees rise compensating (or overcompensating) the inflation rate.
Imagine paying less for a deal because of risk but the deal has a clause which essentially eliminates risk in the first place... Yeah
Sort of like student loans? The government backs them to the loan companies and yet we are stick stuck with absurd rates.
There's no way they can be this stupid, it has to be some level of greed
@@aceman0000099it's not stupidity, each and every person who voted for this benefited personally and privately from their choice.
Morgan Stanley didn't rob the city, it's government did.
@@SineN0mine3 Well, Morgan Stanley also did. They could have taken the ethical course and walked away.
@@nes999 The US government actually directly owns almost all the student loans in America. Since 2010, the US government has directly issued all student loans. 95% (1.5 trillion of 1.6 trillion total) of student debt is owned by the Department of Education.
"I'll give you a dollar now if you promise to pay me whatever I want for the next 75 years"
Chicago: "that sounds like a great deal!"
They took on some of the companies risk too
Like having to compensate for street work is straight bullshit
I bet they would want compensation for terrible streets too since it loses then money 🙄
It was actually Ill give you a hundred dollars if you let me give the company you work for a dollar for said unlimited money
This is my first exposure to you, Sir. You hooked another one.
Okay that "opening the door" bit was genuinely some of the best visual comedy I've seen on youtube for a while.
Also I gotta say it really shouldn't take a business genius to figure out the deal is probably bad when the financial version of satan shows up to give you a deal, and only gives you two days to respond to a massive document.
💯
Man, I would hope that a major metropolitan city would have a mandatory (public) contract review period for anything more than, say, a million dollars.
And contracts longer than most people's life expectancy too.
And at least an exit clause
Maybe over 100mil, but yeah, agreed.
Love the saying “tough beans, hard cheese, better luck next time” and will be incorporating that into my conversations somehow.
There’s a phrase I saw on Tiktok “I’m a train girl forced to live in a car world” and I stand by that. Car centric infrastructure is the bane of my existence, parking lots are just a huge part of that. Imagining all the land we’d have for housing or food or community if we didn’t prioritize cars makes me wish for better city planning.
It's so ridiculous, we sold off all this for a sliver of profit. Now it's a huge barrier to improving our streets. I would love if we could push to get rid of this scam of a deal.
I'd also like to add that being disabled, these spots never prioritize us and just make our lives harder since using more space for handicap parking is bad for revenue
It can be done in court but it would require a large payoff
Short term profit blinds the capitalist, as usual.
It can be done outside of court as well, ya just gotta have some creativity and will to bring the change 😉
What profit? There is no profit except for Morgan Stanley and Abu Dhabi.
If it has to be done legally, then increase environmental regulations on street design to force Morgan to either tear up their own profit incentive or face a huge fine.
Lessons learned: don't deal with fkn MStan, avoid bankers in general, don't do deals over 20y, don't decide on billions in 2 days, read the fkn contract, don't hire crooks
don't vote for crooks
Don’t vote for incompetent democrats. Chicago is 100% democrats.
I absolutely love that you got Jason Mraz not just wearing 4 different hats, but 4 different genres of hats.
One hour and two minutes of my life gone to watching videos on parking in a country I’ve never lived in. Life well spent! Keep up the amazing work, Rollie! Now to Matt’s channel.
lol same. But those problems in its core are everywhere cars are considered important. So no wasted time there.
Rookie numbers
Sadly, Chicago is not alone with those disastrous and honestly undemocratic deals to privatise public domains in general. For example in germany the privatisation of rail services, telecommunication, postal services or the water supply contractor of Berlin (which later got bought "back" at a premium not by the city, but be some of its wealthy inhabitants). Those deals always follow the capitalist principle of "privatize wins and socialize losses".
But the Chicago deal is imho so outragiously bad and rushed that it should be subject to litigation.
I've always characterized "triple P" (public private partnerships) deals as "quadruple P" (public pays private profits)
As a German it drives me nuts how bad our railway and internet infrastructure are especially when you compare them to much poorer EU countries. Privatization is ALWAYS a bad deal in the long run especially for the citizens.
Hi Rollie! I just found this channel from your interview on MKBHD and I realized that we know each other!
Do you remember in summer of 2006 we worked together at Peaceful Valley Scout Ranch, and we discovered we share the same birthdate so we borrowed the camp cannon and fired it in the staff camp at 5 AM on our birthday as a prank? Such a fun summer, glad to see how awesome you are doing with the channel! Your content is excellent!
Would it be legal for the city to hold a referendum to rip up the deal? It's kinda ridiculous for one sitting of the city council to make such a long-term decision that cannot be reversed even when future sittings of the same city council would (presumably) want to do so
if this gets enough heat in the media (but mind you, top down schemes don't work well in those situations) or if enough people follow the recommendations at the end of the video (go to meetings, write to your local representative, etc.) then something can be done.
Most probably they would have to pay like 15 billion dollars to get out of the deal.
no wonder the bankers wanted them to agree so fast. they knew they were screwing the city over
They can't claw it back because they sold it, it's Morgan Stanley's property now so to get it back they'd have to prove Morgan Stanley committed fraud or something similar, or else it's a constitutional violation. But they can buy it back, or else strike some sort of goodwill deal with Morgan Stanley.
@@Apollo440 No. I lived in Chicago when this contract was done and still do today. It is a legal contract no matter how crap it is and how much people then didn't want it and how much people now hate it. You don't get to just tear up legal contracts because you don't like them.
Any public private relationship needs to have a clause that allows one party to leave when it's not beneficial. A politician could literally sell off whatever he wants and the next in line has to deal with fallout.
I mean they just wouldn't do it then, not that I have a problem with that.
That’s the Illinois special
public private relationship is the literal definition of fascism
@@alecksonnyamwaya it's definitely more complicated than that lol. Fascism is actually a bit hard to pin down because it's not really one consistent ideology, but one way of putting it is that the strong should stick together and take from the weak
State/corporate mergers are definitely a part of fascism but just doing PPP isn't inherently fascist. It's very easily corrupt and not in the public interest though, governments often try to portray it as saving money when really I think they're just less accountable and end up costing more later because they cut corners and underestimate their costs
@@DevynCairnsit's not even about cutting corners and underestimating costs - endeavors 100% publicly undertaken can be guilty of that too. I totally agree with you though about the part where there seems to be little to no accountability (which there would likely be otherwise). But to me the most obvious problem is literally just the profit motive. For an equal quality of work, you either pay only for the work (public) or you pay for the work and for some people to pocket as much money as possible (private). It is always going to cost much more, if not immediately, then in the medium-long term to unnecessarily fill the pockets of rich people, middlemen leeches. If the cost is magically the same, you can be sure there is indeed a whole bunch of corner-cutting going on.
Wow ! The city could have taken these same steps that Morgan Stanley did and used the profits for the city, and retained control. Why can’t people figure out businesses don’t enter into deals unless they see profits for themselves. Great video.
This.
Yeah that's what blows my mind and that's why I think that Mayor Daley knew exactly what he was doing and stood to benefit in some way that is not visible and I especially think that because of the overacting that he did when he was selling it to the city council. I mean a lot of the times I only sort of half watch these videos but I kind of was pulled out of my half attention because he was so blatantly fake in that act and it just made me think man this guy has more than just the city's budget riding on this deal this is personal.
And I mean it doesn't take 2 seconds to realize what a screw job this is and that they basically stepped over a dollar to save a dime.
The reason is simple: Short-term profits. Ppl that make such deals for their city, state, country or company do not think what is best in the long run for the city, state, .... but only what is profitable for them NOW. What makes them look good or shine. The treasurer of the city likely said to himself, "How can I get rid of the deficit THIS YEAR"
Because they are a bunch of politicians? They probably rather do a bad deal than being innovative.
@@angelainamarie9656 On his wikipedia page it plainly states that he got a post-mayoral job out of it:
Daley joined the international law firm Katten Muchin Rosenman LLP, one of the law firms to which he had awarded no-bid legal work as mayor. Katten Muchin Rosenman LLP had negotiated the city's much-criticized long-term lease of its parking meters, parking garages, and the Chicago Skyway.
As a city councillor in Eindhoven, the Netherlands, I can simply not imagine anyone thinking this was a good idea.
Democrats are that stupid.
It's like selling the entire port of Rotterdam to McKinley and Sons to operate for the next century. It's beyond baffling.
This was done by the mayor to pretend the city had balanced budgets and not raise taxes to fill budget gaps.
This same mayor spent 10 years skipping paying the city’s share into the teachers pension which now has billions in IOU’s hobbling the city.
He also leased a city owned tollway for a similar amount of money for a similar length of time. Tolls went up on the roadway and the company made back their investment long ago.
Politicians that like bribes will think it's a great idea
Pleased to hear about local politicians in Eindhoven, watching videos about how US cities have failed Americans. Such thoughtful thinking and global connectedness. Now my partner and I are definitely looking forward to visiting Eindhoven next spring.
I’ve just successfully been elected as a councillor in my town and am keen to make changes around parking. Thanks for the reading recommendations!
Yooo that's awesome! Congrats, great stuff :D
Now's your chance to sell your roads and earn some easy cash!
@@Tredemptation the annual budget for road maintenance is 22 million AUD… it’s incredible how much money we spend
@@johnthomas2970Check the depth of the asphalt pavement. All the companies that win the contracts put down less asphalt than the stated contract.
sell to morgan stanely , why you need to do extra work , let other do work for you
Corruption on a massive scale
After Daley left office he went to work for a law office connected to the company that did the parking meter deal, if I remember right.
Yeah, Daley Jr. did some wild things as mayor.
@@iwouldliketoorderanumber1b79every mayor does that
I never thought that asphalt for human transportation would be a source of the "man made horrors beyond my comprehension" type feeling, but of course, Chicago don't disappoint as per usual.
Man, not exactly what you're talking about, but I would definitely classify some of the public roads around here as "man made horrors." They bend my suspension a new direction every week.
as a chicagoan this is very commonly talked about as one of the worst deals ever, wonder how much the mayor got as a kickback from the emir
It's so ironic that the city was so financially desperate that they had to take a bad deal from a bank that helped cause the financial crisis in the first place.
That doesn't sound like irony, it sounds like cause-and-effect.
They didn't have to. They wanted to. For reasons.
@@goullet86 yeah I see what you mean. I just think it was crazy that this was allowed to happen against the backdrop of the GFC. Everyone hated banks back then.
The people hated banks then. Most politicians considered banks their bosses.
@@VoidCael They still do consider them their bosses because they actually are lol
Why did Chicago even discount the deal?
Profits from meters grow with inflation as well, so inflation doesn't matter that much.
It's not incompetence, it's corruption
I'd argue incompetence and corruption are not mutually exclusive... welcome to US politics, WE HATE IT HERE!
A lot of work went in to this. Thank you!
Amercia doesnt dissapoint with its over the top, late stage capitalism, dystopic shenaningans. This is truely hard to comperhand for a non-american like myself. Great video!
Want to adopt a 36 year old? Asking for a friend.
It's "dystopian".
Don't look into the role of SERCO (UK corporate security service) and their role in managing offshore internment camps and private policing in Australia.
6.5$/h for 200 sqf are 1300$ per months business hours and 4680$ per month if you have to pay every hour around the clock. The median home price is 263$/sqf in chicago. So with the monthly business hour revenue after about 5 months you could have bought an equivalent area of living space for the parking costs. And if you say "but there are many levels of living area per land area" you still get a good deal as the average floor count of houses in chicago is only 1.5 floors. So every eight months you buy the actual land your car parks on again and again. 263$/sqf * 1.5 * 200sqf/parking lot = 78900$ per parking lot.
As per the Income Tax Act depreciation rate applicable for residential premises is 5% and multiplied this with the an interest rate gives you the lease rate before sales tax.
Anual depreciation is then 3945$, monthly is 328.75$ and for business hours its 1.64$/h.
The hourly interest rate therefore is about 396%!!!
So no, i don't think its a fair price for parking!
The banks definitely pulled a stunt on Chicago, but the part of the contract that is wildest to me is that, after already having a rate that makes it a good deal if earnings go down they still have a "but if we don't make money you have to pay us" clause in it. I mean the idea that they could not make a lot of money is already wild to me - they can control what they charge and it definitely was subsized by not charging as much as it was worth, so why would you not make money? Also that revenue was based on previous earnings and those previous earnings happened while these spots were sometimes blocked.
And that's not all - when they are earning more than projected Chicago still has to reimburse them for missed revenue when a street is temporarily blocked? Surely they could have at least gotten the clause to say "if the revenue is below X/year (or Y/month), then (and only then) Chicago has to pay for meters that had been blocked during that year/month at a rate of so and so until the revenue threshhold has been reached".
As it is they are basically triple dipping on parking spots being blocked which is just ludicrous.
Mayor Daley wasn’t about protecting the city when he made this boneheaded deal.
He wanted new revenue to cover his spending. Which also involved not paying into the teacher pensions fund for a decade; leaving it billions in obligations now having to be made up.
And he retired just around the time all this parking money was spent and before the pension crap hit the fan.
I would say if someone took this into a fair and impartial arbitrator and said hey look you know we the city were sold this deal on the basis that we need 150 million right then. So that's what we were given in compensation for possession of our meters and now we feel like Morgan Stanley and this other small have made all that money back and more and really the terms of the deal seem to have been fulfilled you know they gave us money they got money back and the rest of the deal seems to have been done very dishonestly without informing the people who would really be impacted and I think they could probably nullify it on that basis.
And if not we really need a law in this country a federal level law that makes this kind of scam illegal regardless of when it started or who is currently getting away with it.
I think the clause makes sense. If it wasnt in there chicago could just put every meter out of commission and make Stanley suffer for it. Or just mark every parking spot for renovation and just stall actually reopening it for 75 years. Everything would be fine if they just sold the rights for 5 years, then once you regain control over parking you can then push through all the maintenance youve been delaying.
As bad as the rate is, the decision to have the deal last for 75 years is mind boggling. Since from the sound of things, that was already set BEFORE the actual offer was made!
15 years even would have been plenty, and would be giving them control of their own streets well...NOW.
Even 15 years is too long for my tastes.
Love your videos. You absolutely nail it and I could probably watch you talk about paint drying, but I appreciate that you talk about much more important things, and do it without making me absolutely depressed. Only slightly depressed.
Fan from Chicago here. Super glad to see you do an episode on this issue. It’s quite literally absurd!
Holy hell I don’t think I’ve laughed harder than at that door pun- solid gold.
is it some sort of art installation? why is that even there haha
That's 05:36 for those of you searching at home.
new response just dropped
@@nevreiha Some cities have fake buildings with fake doors and windows that hide electrical infrastructure and such because they're more secure and less disruptive to the landscape than an exposed substation, for example. Just search for "fake buildings". I don't know whether or not those would normally have doors that actually open, but it seems possible that that's what that is.
Another top notch video. Thank you!
That hotdog to fish and chips cut was maybe my favorite sight gag Matt has done.
The problem with using the discount rate formula as done here for the right to sell a good without fixed pricing is that it makes the ludicrous assumption that the price will be constant. Even if we assume that the City of Chicago was optimally pricing its meters prior to the sale (ignoring the fact that Morgan-Stanley's price hike dispels with that assumption), the optimal price of parking should be expected to roughly rise with inflation. This means that in principle inflation should NOT be included in the discount rate calculation, only the cost of borrowing.
Chicago should probably bite the bullet and build some underground or overground garages, lease them for the remainder of the contract, and get their streets back.
I learned more in 30 minutes here than I did in 10 years of living in Chicago.
It’s insane that this was even considered in a city with decent public transit, but it’s painfully obvious that Morgan Stanley knew what they were doing.
They are finance firm , they have some of the best mind on this planet in field of finance. any analyst from there would have done understood this maths
There are three shows that I've watched religiously and couldn't wait for new episodes. One of them is Climate Town.
Fighting for transit and bike infrastructure in my city (Denver) is already hard enough because our government doesn't want to do anything! Imagine city council being able to throw up their hands and say "sorry, we literally can't do anything"! Not a doctor but I'm pretty sure my blood pressure rose in this 31 minutes!
Brasil is also mastering the art of signing really bad public-private partnerships!!
When I was there this summer, I studied a city that signed a contract with Enel, giving them all the benefits of the city's street parking, in exchange for... changing public lighting (for LED light bulbs-so energy efficient!), installing some cameras (with face recognition-be careful, fellow criminals!), and buying 2 e-bikes for the police (that's not a joke, that's in the deal).
So yeah, stay away from public-private partnerships...
This is an excellent video explainer! Love the links provided to all the sources- including relevant court transcripts. As a Chicagoan, I wish this was more common knowledge or at least something spoken about more often.
What if the city threatens to stop enforcing parking tickets? Or if not allowed, use a creative solution preventing enforcement of parking tickets, like a privacy law, or limiting parking attendants, or allowing cars to cover their plates while parked, etc.
Presumably, Morgan Stanley would file a suit, and it would go to the courts
Just stall it in court indefinitely
In Portland the company parking kitty actually has its own private enforcement. In little pink parking enforcement vehicles
I wonder if the contract guarantees easy access to the parking spots. Otherwise they could close down the streets, build bike lanes and pedestrian areas, and just leave the spots as they are. Maybe require some difficult to get permits to drive there in order to not make them entirely inaccessible.
That would also be a pain for citizens because bums would just leave their shitboxes on main Street for 100 hours if there was no enforcement
I love Chicago but this was a terrible deal when it was made. As a cyclist and transit rider who doesn't own a car it's infuriating to watch these decisions being made. Banks and corporations own everything in this country and there's very little being done to improve quality of life for citizens. However, this year they have added a lot of bike lanes which is a step in the right direction. ❤ Thx for the coverage on this!
Quality of life is not a term that is ever used in the USA. It's not even thought about.
@HibikiRush speak for yourself buddy, my quality of life here in the US is great... granted I'm not living in Chicago either, thank God💀😂
I love your sarcastic style, makes me laugh. You and William Osman are pros at this. :D
Chicago should dedicate one lane of every multi lane road to a dedicated bus and bike lane, or light rail, and pedestrianize the other lane. This is the "we technically didn't touch the parking spots and fulfilled our contractual requirements but, whoopsie poopsie nobody drives here anymore" approach
@@GotoHere Minneapolis has heated light rail and bus shelters
@@GotoHere Chicago rarely gets that cold anymore. And buses ideally shouldn't take that long to show up. If the CTA functioned correctly, you shouldn't have to wait more than 5 or 10 minutes, especially on busy routes. But right now, the CTA is a fucking disaster.
😂 they sold the street income rights then had to pay for the lose of income. thats got to be one of the dumbest business deals in Chicago's history.
Noone read it, the ones who did were in on it or were pressured.
Fantastic job. The hope is this channel will become more accessible and successful. Cheers.
Sure would be a shame if someone not involved with the city started ripping parking meters out until it costs the bank too much to keep replacing them
That's a news headline that might put a smile on my face. 😂
yeah, no, the bank will just give that bill to the city and not only make it pay for the whole thing plus installing. BUT ALSO for the lost revenue due to the broken meter. For this kinda things you should wait for midnight or so. To make sure there is no one there. And start a completely accidental fire in their offices. I mean, you definately shouldn't do that, offices are extremely flammable and those have to be paid for the bank
If the gangs started to do that, Pritzger should pardon them in a second.
Pretty sure the city is responsible for the maintenance on the meters. The bank is only responsible for processing the payments.
I think the city would be fined by the bank and ask for the money lost :(
I had heard about this story before and my european reaction to it was: "Wait what? How can anyone be THIS incredibly stupid?"
It was probably an inside job not stupidity.
You’ve described Illinois leadership in the past 30 years
Because nothing like corruption to shut down rational thought, essentialy those that made the deal get free money while the future councils and residents have to deal with the consequences, America in a nutshell
Americans + Money = bad decisions.
Because short term profit go into your pocket, long term profit for ur city dont. Ding ding ding.
The short-sightedness of capitalist mentality never fall short of astounding me.
I was young when this happened (high school) and didn’t really understand what exactly happened but hoooooly cow this has to be one of the most corrupt business deals in American history.
All orchestrated by corrupt democrats. Trump 2024.
One time I drove in on the Chicago tollway which is also privately owned. I went online and paid, after several weeks I got a bill saying I had missed a few tolls... That somehow weren't attached to my tag at that time. The bill went up for two tolls to over 265. I told them they can come get it luckily I don't live there
the tollways are owned by the state. the only one that isn't is the Chicago skyway
I believe that tollway is owned by an Australian pension fund.
This lack of confidence in your own content, I just want you to know it's unwarranted. Your stuff is really informative!
Any day we get a new Climate Time episode is a really good day.
I appreciated the explanation of discount rates, but it's still just as confusing as it was in college 💀
I've subscribed to both channels for the next 75 years
now imagine having to watch each video 3 times instead of 1 for all of this time.
With ads. Yep, that's the deal that the city of Hot Dogs got.
But, once 2098 rolls around, they're right out!
I know that this series is usually about things that suck, but I’d like to see you do a video about Houston’s promising future with public transportation
I don't how it's possible the two informative and inexplicably and unreasonably funny TH-camrs collabed but I'm here for it. This will go down as an instant classic Rollie, I can feel it.
Man, if only more people knew. Like, no citizen in their right mind would vote for this if they understood this. (or did the basic math)
Now you know why maths isn't obligatory for everybody to learn.
@@Apollo440 Yeah, if our politicians ever learn maths, our way of corporate life will be threatened.
@@FuckGoogle502 they know it well when it comes to calculating their finances. It's in government work when they forget how to count.
Democrats know their voters are math challenged. 50% of Chicago students don’t graduate high school. 90% don’t meet basic national standards in math, reading and writing. In other words dumb sheep voting for racist corrupt democrats.
@@Apollo440almost selfish eh?
26:00 The most important part to me seems to be to never enter a contract for more than a decade at a time, let alone a lease that the private party can never realistically be found in breach of for almost a freaking century.
I love stand-up maths, great channel, glad to see you two collaborating.
I'm not much of a maths guy, but every time I see Matt Parker brought into something I do follow, it's always emjoyable.
I love how the chicago dogs turned into fish and chips when youre back at home lmao
There is some seriously good editing in this one bro. That Instagram mural sequence was 👌🏿 19:56
I hope Rishi Sunak doesn't see this video. He _WILL_ try to do this.
Sssssh, don't give our PM anymore stupid ideas. He's already trying to sell off HS2 land to prevent sucessive governments from undoing his cancellation.
He’s basically doing this already by flogging off the land that was earmarked for HS2.
Selling the government to private companies is usually something governments at least pretend they aren't doing. It's almost refreshing to see an example of them being honest about it.
I wonder how much those councillors were paid to accept such a terrible deal.
You think they were smart enough to know it was a bad deal? That takes some optimism that I don't have.
idk, probs 20 dollars
Getting involved in local politics is great, but there are a number of orgs here in Chicago who do solid organizing too! Better Streets Chicago, Active Transportation Alliance, Commuters Take Action, etc!
The fish and chips gag at 12:25 has been criminally underappreciated in the comments. Bravo.
Two of my favourite completely unrelated TH-camrs collaborating on a topic that I care for actually makes my evening.
I really enjoy that Portland, Oregon has their parks department run parking enforcement. Anytime you get a fine for a parking violation you could just imagine a portion of that is a donation to the parks department! ;^)
I wouldn't go there even if the Fire Department ran it.
What started as confusion over homonyms turned out to be a pretty solid deal.
That’s a neat idea.
@@iwouldliketoorderanumber1b79 it is far from perfect and has plenty of flaws, but I’ve always liked it.
@@salemite , funny I live here and I didn't know that. I do like it though. All though, who knows whats gonna happen with the new city goverment setup that is unsurprisingly turning into a mess already.
A small Virginia coal towns Mayor in the 1950's sold 100yr road rights to a coal company for 50k.
I just happened to be on a trip in Chicago one day and saw Rollie prepping for this. Looking back, having a 6'9" guy yell your name while walking right at you might have been a little alarming. Thanks for chatting! Probably a good thing you didn't mention Matt Parker, I might have followed you to see him.
Wow, he is that big. I'm 6 ft 5, he doesn't look that tall
@@KingLarbear You misunderstood, twoshoes85 (the commenter) is 6'9", calling Rollie's name while walking towards Rollie.
Thanks for the Premiere!
Fantastic stuff as always.
Uncovering the truth about politician inadequacy, hidden in plain sight.
And thanks to @Stand-up Maths for the exciting whiteboard and Excel sheet magic!
The part where the hot dog transforms into fish and chips was genius.
@@benoithudson7235 and the bright future behind that door, with that brick wall right behind it. My-my, what a treat! 05:36
As a person who has been living in chicago for 14 years (since i was 3), this is such a fascinating video!
Dude, since Jon Stewart left the Daily Show I have not found "serious" reporting of such depressing subjects delivered in coat of such sweet sugar as good as this channel. Please! don't ever stop or change or leave, Rollie!
Yeah the media outlets will never make that mistake again and hire an actual human to disseminate information anywhere capable of broadcast.
I'm sure this was already mentioned somewhere in the comments, but the editing on these videos is just absolutely perfect.
I know the state of Indiana did the same thing with their toll road. Not only did Indiana burn up their money significantly sooner than they expected but they also can't earn a single dime off the toll road until about 2074.
As a former resident of Toledo, I believe there were discussions to do exactly this. It may be a reality now.