IU may lease parking spaces in Indy, Bloomington
August 25, 2012 4:30PM
Updated: August 25, 2012 11:52PM
INDIANAPOLIS (AP) — Indiana University is considering following Ohio State University’s lead by leasing parking spaces to a private operator in exchange for a multimillion dollar payout.
IU Chief Financial Officer Neil Theobald said the school is about two weeks away from issuing a request for proposals for a lease that could last 30 to 50 years for parking spaces at IU’s Bloomington and Indianapolis campuses.
“We’re constantly monitoring different options,” Theobald told the Indianapolis Business Journal.
Many cities, including Indianapolis, have used long-term leases to cash in on parking assets, but this year Ohio State became the first in higher education to do so. The school turned over about 36,000 parking spaces and $30 million in annual revenue to two firms, Australia-based QIC Global Infrastructure and Connecticut-based LAZ Parking, for a 50-year term in exchange for an up-front payment of $483 million.
Ohio State students protested the school’s parking deal because they’ll be subject to annual rate hikes, but university officials defended it because it means they can hire faculty and expand research in a time of state budget cuts.
Theobald said he hopes IU can head off controversy by involving staff members, faculty and students. Representatives from both the Indianapolis and Bloomington campuses were appointed to a committee that’s been meeting for about six weeks, he said.
Lee Stone, president of the staff council at Indiana University-Purdue University at Indianapolis, said he hadn’t heard anything about university plans to lease its parking facilities.
Faculty council member Joan Kowolik, a professor in the IU School of Dentistry, said she knew the topic had come up and expects the faculty will seek more information when they meet next month.
IUPUI’s long-term plans call for more parking garages for the downtown Indianapolis commuter campus and Kowolik said that if privatization can help finance that, she thinks it’s worth considering.
“It’s impossible at this point to find a parking space, unless you’re in here before eight in the morning,” Kowolik said.
A long-term lease could be worth hundreds of millions up front for IU, Theobald said.
But IU’s parking operations might be worth less than Ohio State’s because there aren’t as many spaces in a downtown setting.
IUPUI has nearly 25,000 spaces that generated $17.1 million in fees and fines last fiscal year, which ended June 30.
But the average value of a parking space at IUPUI is more than twice that of Bloomington, which has 21,000 spaces and generated about $6 million last year. That’s because rates are higher, reflecting higher real estate costs in Indianapolis, said IU spokesman Mark Land said.
IU doesn’t have any specific plans for the money it receives, but Theobald said it could go to student aid, hiring more professors or carrying out campus master plans.
Ellen Dannin, a Penn State law professor who studies infrastructure privatization, said the contracts tie the hands of future generations.
Dannin said most privatization contracts include “adverse action” clauses, where the government pays the contractor for policy changes. In the case of parking privatization, one such change would be a push toward public transportation that would decrease parking revenue.
She believes the adverse-action provisions are part of what makes the deals so appealing to the private sector.