Ohio State seeks to privatize its parking
Ohio State University wants to privatize its parking and plans to ask its trustees to let the school invest part of the $375 million in proceeds.
The proposal is in keeping with Ohio State President E. Gordon Gee's call for a comprehensive financial strategy that looks toward the future said university chief financial officer Geoffrey Chatas.
Some members of the campus community fear that future holds the promise of much more expensive parking, because the buyer would be allowed to double the parking revenue during the contract's first 10 years.
"After a certain point, I wouldn't be able to afford" to park on campus, said Erin Wagner, a graduate student in English literature whose current parking pass costs about $370.
The new operator would likely seek the maximum possible increases because the university would ask the company to build more parking, Chatas said.
Ohio State's plan, developed with the help of Wall Street investment firm Morgan Stanley and expected to go before the trustees next week, calls for selling parking facilities that bring in roughly $30 million per year. The new owner would run the operation as a for-profit company for as long as 50 years.
A private business "can operate these over time more efficiently," Chatas said.
Ohio State would not only reap a potential windfall of $350 million to $375 million but also shed parking expenses of up to $300 million, including the cost of about 70 full-time employees. Chatas said an undetermined percentage of the sale proceeds would be invested through the university's quasi-endowment and ultimately support scholarships, academics and research.
Ohio State officials said they were unaware of any other university that has turned its parking over to private operators, though it's something cities have done.
Toledo reached an agreement this summer to sell three of its parking garages and control over its parking meters for about $15 million.
Some members of the campus community fear that future holds the promise of much more expensive parking, because the buyer would be allowed to double the parking revenue during the contract's first 10 years.
"After a certain point, I wouldn't be able to afford" to park on campus, said Erin Wagner, a graduate student in English literature whose current parking pass costs about $370.
The new operator would likely seek the maximum possible increases because the university would ask the company to build more parking, Chatas said.
Ohio State's plan, developed with the help of Wall Street investment firm Morgan Stanley and expected to go before the trustees next week, calls for selling parking facilities that bring in roughly $30 million per year. The new owner would run the operation as a for-profit company for as long as 50 years.
A private business "can operate these over time more efficiently," Chatas said.
Ohio State would not only reap a potential windfall of $350 million to $375 million but also shed parking expenses of up to $300 million, including the cost of about 70 full-time employees. Chatas said an undetermined percentage of the sale proceeds would be invested through the university's quasi-endowment and ultimately support scholarships, academics and research.
Ohio State officials said they were unaware of any other university that has turned its parking over to private operators, though it's something cities have done.
Toledo reached an agreement this summer to sell three of its parking garages and control over its parking meters for about $15 million.
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