CHICAGO — Chicago must compensate the private operators of four downtown city- and park district-owned parking garages for $58 million in lost revenue and interest stemming from the city's approval of a competing parking facility, an independent arbitration panel has ruled.

The private operators — Chicago Loop Parking LLC — filed a claim in 2011 seeking as much as $200 million from the city. It argued that the city violated terms of its 99-year, $563 million lease struck in 2006 that prohibit the city from approving new public parking facilities within a designated zone around the garages.

City officials stressed that the panel's ruling marks a significant reduction in the company's original claim. Law department spokesman Roderick Drew said the city had not yet decided whether to appeal the ruling. Under terms of the lease, independent arbitration rulings are binding.

Former Mayor Richard Daley and the Chicago Park District handed control of the garages to the consortium led by investment arms of Morgan Stanley in 2006. Not long after, the city approved permits for the new Aqua Building and in 2009 signed off a permit for a 1,200-spot public parking garage in the building, which is located within the no-compete zone.

CLP in its filings said it soon noticed a drop in parking at its facilities and submitted a claim to the city. The city negotiated a change in the Aqua Garage's status that was supposed to restrict parking there but it still continued to accept public parking.

CLP reduced its claim to $122 million as the arbitration process began. It argued that the city's violation warranted compensation for lost revenues and damages to its risk profile which could drive up its financing costs. The city argued that the cash losses should be limited to $11 million with no award made on the risk profile claim.

Hearings took place in October with closing arguments in November. The arbitrators in their ruling issued late last month granted CPL's claim for cash flow compensation and interest but rejected the risk profile claim. The city and CPL must equally share $200,000 in expenses. A copy of the arbitration ruling was posted on the Chicago Sun-Times website which was the first to report on the ruling.

The parking garage lease is the subject a lawsuit filed in mid-February in Cook County Circuit Court by the Illinois Independent Precinct Organization and a citizen. The lawsuit argues that the lease illegally usurps the city's legislative and police powers by barring it from opening new public garages in the area. It seeks to void the lease.

Chicago used $278 million from the deal to retire limited-tax bonds that financed construction of the Millennium Park garage. Another $120 million went into an escrow with interest covering the $5 million in annual revenue the district will lose as a result of handing over control of the garages. Another $150 million is financing park improvements.

The city also faces another potential claim filed by the private operators of its parking meter system under a $1.15 billion 2009 lease. The operators, also a consortium led by Morgan Stanley investment vehicles, is seeking more than $50 million for in compensation for parking spots taken out of service.

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