Ohio State has received three bids from private investors interested in running the university’s $28-million-per-year parking operations for up to 50 years.
But campus officials aren’t providing detailed financial information about those bids today — except that there are multiple bids topping $400 million — because they still are trying to determine if they will ask bidders for “best-and-final” offers.
If two or more of the bids are within 10 percent of each other, Ohio State could ask the companies to submit another offer, which would be due by Monday.
Ohio State Chief Financial Officer Geoff Chatas said the school needs more time to determine if it wants to ask for final offers because it asked for bids under three different scenarios: capping annual parking rate increases at 5.5 percent, 6.5 percent and 7.5 percent for the first 10 years of the agreement. That means they have nine total bids.
“Our expectation is that we will have more concrete news to share by the end of the day tomorrow,” Chatas said. University officials have not responded to several recent public-records requests by The Dispatch for the individual proposals.
Chatas said the bids couldn’t be shared yet because the bidding process is still “open and active.” The private firms have until June 5 to submit letters of credit or deposit guaranteeing 10 percent of the upfront payout that they would make to Ohio State if selected, he said.
In a May 25 email to the campus community, Provost Joseph A. Alutto said the university was committed to making a decision about the parking operation by June 8, with a vote by campus trustees on June 22.
“In the days between the return of the bids and the decision, we will hold several scheduled meetings to discuss the issue,” Alutto wrote in the email.
The Faculty Council will meet this afternoon, followed by six other groups — including student leaders — who will be last to discuss the proposals on June 8.
Ohio State officials have repeatedly said that if the university were to get a $400 million payout from leasing its parking, $200 million would be used to hire more tenure-track faculty; $75 million would be used to go to student scholarships; $75 million could go toward the campus bus service and improving other transportation; and $50 million would be used to support the arts and humanities.
Today, Chatas said, if the university were to get $425 million, the additional $25 million would go to the endowment for the student bus service and transportation. The same would be true if it received $475 million, except that as the endowment grew over time, there would be money left over after one year for other academic needs.
He added that whatever amount the university would receive, it would pay off $80 million in bonds that are financed through parking revenue by tapping into existing reserves that are set aside for this purpose.
In September, Ohio State administrators introduced the idea of leasing out the university’s parking operation for up to 50 years for an upfront payment of at least $375 million. And trustees gave the go ahead to have administrators accept or reject any bids and develop a plan for investing and spending the money.
The parking system is the first of several campus services and assets that are being examined as potential money-making opportunities as state and federal funds for higher education decline.
Campus officials say the goal is to raise immediate revenue that can be invested into the school’s core mission of teaching and research without harming faculty, students or staff.
But many in the campus community oppose the idea, saying claims that the university will reap a financial windfall are disingenuous.
Nearly 84 percent of the 1,252 Ohio State professors who participated in an online survey in April said they didn’t support the idea. Only 86 faculty members said they liked the idea. Another 119 said they didn’t know enough about the proposal to take a position.
Opponents say the $400 million figure is insufficient. They say Ohio State would need at least $600 million to maintain the annual revenue stream the parking system now provides the university.
Even if the deal were financially attractive, opponents worry a move would result in significant increases in parking fees and fines. They are also philosophically opposed to the idea of a private company profiting from what had been a break-even operation for the university. And they say if anyone should make money, it should be the university.