UPDATED 12/28/10 9:34 a.m.

CHICAGO (CBS) – Motorists are about to get a belated Christmas gift: a parking-rate increase from the company that leases Chicago parking spaces on the street.

Beginning Jan. 1, rates in the Loop go from $4.25 to $5 an hour, which the watchdog website TheExpiredMeter.com calls the highest rate in the nation.

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Parking tops out at $3.75 per hour in Manhattan, $4 per hour in Los Angeles.

Rates outside the Loop — but still in the downtown area — go from $2.50 to $3. The affected area for these rates is bounded roughly by Division Street, Cermak Road, Halsted Street and Lake Michigan.

Meanwhile, neighborhood parking goes from $1.25 to $1.50 an hour.

This will be the third rate hike since Mayor Richard M. Daley convinced the City Council to lease city parking meters to a private firm in a controversial and abrupt deal.

Chicagoans like Matthew Alexander tell CBS 2 the hike is not unexpected, but it’s too much.

“At that time of the year, right, Christmastime, might as well jack everything up,” Alexander said.

It also won’t be the last increase. The lease deal calls for rate hikes again in 2012 and 2013.

By 2013, it will cost $6.50 per hour, or 26 quarters, to park in the Loop, $4 to park in downtown outside the Loop, and $2 to park in the neighborhoods. After that, rates will be adjusted annually by inflation.

Two years ago, the city entered a 75-year, $1.15 billion lease with Chicago Parking Meters, LLC, a firm organized by Morgan Stanley, to privatize the collection of funds at meters.

In addition to jacking up rates and replacing the old parking meters with electronic pay boxes, the privatization deal also did away with free Sunday and holiday parking.

Some areas are also subject to confusing regulations. For example, on a short, one-way westbound block of Drummond Place between Lehmann Court and Clark Street on the northern edge of the Lincoln Park neighborhood, the south side of the street requires meters to be fed until 6 p.m., seven days a week. But on the north side of the street, meters must be fed until 9 p.m., but only Monday through Saturday.

The parking meter deal has since been roundly criticized as a bad deal for the city and a bad deal for those who have to park here.

Also, about six months after the parking meter deal was approved, the city Inspector General’s office indicated the city could have reaped $1 billion more for the meters than it got in the deal.

But Mayor Daley has always defended the deal saying it prevented a tax increase and service cuts.

As for the money from the lease, it’s just about about gone.