Privitazation in Chicago


Privitazation in Chicago

Things seem to be heating up in the race to see just who is going to be the successful bidder in the lease of four garages making up 10,000 spaces from the City of Chicago.  13 groups or consortium’s made up of investment banks, consultants, engineers, and commercial parking companies have met the cities initial requirements for bid.

Those companies are:

1) Abertis Infraestructruas, SA Saba Aparcamientos, SA (Bacelona, Spain)
2) Babcock and Brown (San Francisco); The Gates Group (Cleveland), Parking Real estate Fund (Cleveland)
3)  Capri Capital Advisors, LLC (Chicago, IL) Parkway Corporation, (Philadelphia)
4) The Carlyle Group, (New York)
5) Cintra Concesiones, de Infraestructrueas de Transcorte, SA (Madrid Spain)
6) Goldman Sachs Infrastructure Partners (NY)
7) Hotspur Resorts Nevada, Inc (West Vancouver, Canada)
8) INterpark General Electric Capital (Chicago)
9) Macquarie Investment Holdings (NY)
10) Manulife Financiat/John Hancock (Toronto), Finpro (Lisbon), Dr Chirinjeev Hathuria and Cos (Chicago)
11) Merrill Lynch Pierce et al (NY), Meridiam Infrastructure  (Paris)
12) Morgan Stanley (NY) Laz Parking (Hartsford)
13) Vinci Park (Nanterre, France) SITQ Et Al — Montreal

Now  — I have learned through many sources in Chicago and in NY that a number of parking companies are allied with these groups – They are rumored to include Standard, System, Interpark, Impark, Central and as you note above, Laz. I have heard rumors as to who is allied with whom, but they are just that, rumors and I will report on that when the bids come in. The names have been changing daily.I do know that some companies are allied with more than one potential bidder.   There are also a number of consulting firms that are allied with different bidders.  That seems reasonable since these investment banks know little of the ins and outs of parking.

It makes sense that they would hire experts to ensure that they aren’t buying a pig in a poke. After all, they need engineers to tell them the status of the garages, auditors to ensure that the income has been properly reported, operations folks to tell them what it will cost to run the garages for the next 100 (ok really 99) years, and the like.

My sources tell me that the successful bid will exceed one billion (with a ‘B’) dollars and the money will be paid up front.

As it did with the Skyway, Chicago is selling (or leasing) off its assets.  The idea is to give them a ton of money up front that they will invest and live off the interest.  However my sources in the Windy City are concerned that as politicians will usually do, they will fritter the funds away and after a few years will have no money and no assets.

Next on the Block in Chicago — Midway Airport.  I also hear that New Jersey is considering selling off the Jersey Turnpike. Wow — things are happening out there.


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John Van Horn

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