Ward Room
Covering Chicago's nine political influencers

Emanuel: We're Broke. Let's Rent To Own!

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    NEWSLETTERS

    With promises that it'll allow Chicago to "control its own destiny," Mayor Rahm Emanuel and former President Bill Clinton on Thursday unveiled the Chicago Infrastructure Trust to finance "transformative" renewal projects in the city. Trust money would be used to finance major projects, initially putting construction workers into jobs. The buildings would see reduced energy costs and would initially use those savings to pay back the loans provided by the Trust. One the loans are repaid, the building would continue to reap the savings. (Published Thursday, Mar 1, 2012)

    Now Chicago is so broke the mayor is proposing to buy stuff on the Rent To Own plan. That’s behind-on-the-rent, can’t-make-my-SNAP-card-last-until-the-end-of-the-month broke.    

    Mayor Rahm Emanuel is proposing the Chicago Infrastructure Trust, an extra-legislative body that would hire private companies to build public works, which would then be leased to the city.

    The Trust would be run by a five-member board -- appointed by the mayor, of course -- and would “voluntarily” comply with the Open Meetings Act, according to the Tribune. Meaning it will share with the public any information that’s not embarrassing to the mayor and his private sector partners.
        

    The companies are interested in what amounts to a rent-to-own plan. Private firms would build new projects or replace, expand or upgrade existing ones that the city can't afford to tackle. The city would then lease the new school, park facility or public health center, for example.
    Several of the investment companies that the administration says have bought into the concept specialize in taking over public assets in return for providing upfront money to cash-strapped governments. Local examples include the city's parking meter deal and the Chicago Skyway lease.
    Scott said the infrastructure trust is only being set up as a financing arm. It will be prohibited from entering into long-term leases or sales of existing public assets. It will be set up to build new assets that benefit taxpayers, not sell old ones, Scott said.
    Aldermen and agencies such as the CTA will have “on-going review and oversight” of the trust because each deal must be publicly approved, city officials said. Each project funded by the trust and each investment into it also would require a majority vote, according to the mayor’s office.


    I understand that the city is too broke to build new schools and parks itself, but this kind of arrangement would put us into a situation that Mayor Emanuel does not understand from his own personal experience: when you’re poor, you pay more for everything. How much do you want to bet the mayor didn’t buy his TV set at a Rent-To-Own store?

    You end up paying 300 percent of the list price

    . These buildings will not only cost more when constructed by private contractors, the city will end up paying far more in leases than we would have if we’d had the money to pay for it upfront. I’m sure the CEOs of these companies will contribute some of the excess profits to Emanuel, though.

     

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