Indiana University is about two weeks away from issuing a request for proposals for a 30 to 50-year lease for parking spaces at the school’s Bloomington and Indianapolis campuses:
Essentially, IU Bloomington would sell its parking facilities to a private company to get a one-time cash infusion. Then, for however long the lease lasts, the university would make annual lease payments to the same private company for use of the parking spaces.
In June, the Ohio State Board of Trustees unanimously voted to lease the school’s parking system to an Australian company called QIC Global Infrastructure and its partner company LAZ Parking for $483 million for 50 years.
Ohio State Chief Financial Officer Geoff Chatas told Bloomberg that assuming a 9-percent investment return rate, the lease payment would produce $3.1 billion in investment earnings over its term.
Both Ohio and Indiana say that they’re turning to private sector deals like the one approved in Ohio and being considered in Indiana to cover the gap left by “the receding tides of state budgets,” as our StateImpact colleagues put it.
But past municipal efforts to privatize parking system have had “limited success,” the Wall Street Journal reports:
In the highest-profile deal, the city of Chicago reaped $1.15 billion in 2008 for rights to operate its parking meters for 75 years, but critics have complained the price was too low and rates have risen too quickly.