Wednesday, July 30, 2014

Obama touts P3 deals, but have Ventra and the parking meter deal worked out for Chicago?

Two weeks ago, President Obama announced the Build America Investment Initiative, an executive action designed to make it easier for state and local governments to enter in Public-Private Partnerships (PPP or P3). Supposedly, it would also help bypass the need for federal funds blocked by perpetual conservative opposition to raising taxes.

This should come as no surprise. Two years ago, I wrote about the Democratic and Republican Party's advocacy of P3 deals on a national level and Congressional attempts to create an national infrastructure bank.

I have also written about recent P3 deals in Chicago before, most notably with the Chicago Transit Authority and some of the dubious circumstances leading to the recent Ventra fare payment system.

Ventra comes in the wake of the equally-unpopular leasing of the Chicago Parking Meter system to Morgan Stanley in 2009, and 2006 leasing of the downtown Chicago parking garages.

All three deals were brokered by Chicago-based private equity firm William Blair, which has touted them as successful P3 case studies.

If Obama really wants a new wave of P3s to save America's future, he should take note of the major recent pitfalls in his own home city of Chicago.

But since the last two mayors have been Rahm Emanuel and Richard Daley, don't expect him to even mention the Chicago-style P3s any time soon.

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