Brittany Schock / Asst. photo editor
After the Ohio State Board of Trustees approved a plan to sell university parking to a private vendor for up to $375 million, some students and faculty members are looking to other major cities like Indianapolis and Chicago to speculate possible outcomes.
University officials are not revealing exactly how the $375 million figure was calculated. A public records request for the formula was denied due to trade secrets, officials said.
President E. Gordon Gee told The Lantern the figure is simply just a number for a request for proposal but that he expects the deal to bring in more money for OSU.
“If we can’t do much better than that, then we won’t do it,” Gee said.
OSU has not yet selected a vendor for the parking proposal. Qualified vendors now have until Nov. 2 to respond to a request for qualification, OSU announced in its Request for Concessionaire Qualifications.
But some students think the $375 million deal is not the university’s best option.
“The $375 million looks good right now, yes, but I just think in the long run it won’t benefit the university as a whole and our price tag,” said Michael Gundich, first-year in industrial and visual design.
In a similar move, the city of Indianapolis sold its parking meters to a private vendor, Affiliated Computer Services, in an effort to remodel the parking meter system in 2010. Kurt Fullbeck, project manager for the city of Indianapolis, said the reason for the switch was a technological one.
“There was buzz for a push for more technology-friendly meters. So ones that you can pay at with a credit card and there are multi-space meters available,” Fullbeck said.
Fullbeck said the city’s parking transformation is a little different from what might be in the cards for OSU.
“I’m not too familiar with OSU’s proposal, but it sounds like maybe they are considering selling their parking for just an up-front cost. Indianapolis’ parking is wired so that we did get a partial lump sum when we sold it. But, we still get a portion of all of the profit,” he said.
ACS gave the city $20 million upfront and 20 percent of all profit to a point of sales, and then 25 percent thereafter, Fullbeck said.
“We made the hybrid deal with ACS so that we would find a way to make some revenue, and still keep our citizens happy,” he said.
Fullbeck said the city has received a lot of positive feedback.
However, the city of Chicago did not choose to follow such a plan. In 2009, Mayor Richard Daley agreed to a 75-year meter lease for a one-time payment of $1.1 billion. The deal proved to be controversial because of extremely quick rate increases and the $9.5 billion the private companies who leased the meters profited.
Chicago-Sun Times columnist Carol Marin wrote about Chicago citizens’ boycott of meters.
“When the City of Chicago privatized parking meters, rates were immediately jacked way up, and you now have to feed 28 quarters into the meters to park a car in the Loop for two hours,” Marin wrote. “In exchange for a 75-year-lease, the city got $1.2 billion to help plug its budget holes.”
The Loop that Marin is referring to is downtown Chicago’s central business district.
The Chicago Tribune also reported that the city took big losses by privatizing its parking.
“But records show meter revenue had risen to nearly $22.6 million in 2007 from $19 million in 2005. That 18.5 percent increase far outpaced inflation, indicating the meter system was becoming more valuable,” Tribune reporter Hal Dardick wrote in 2010.
Gee said the city of Chicago had the wrong model.
“The folks in Chicago had the wrong model because they didn’t put it into any sort of endowment,” he said. “They made a mistake. We won’t.”
The City Budget Office of Chicago failed to return several calls from The Lantern.
The Columbus Dispatch reported that more than 60 percent of an upfront payment could be needed to pay off bonds, run campus buses, and pay for other transportation functions. However, Geoffrey Chatas, the university’s chief financial officer, told The Lantern the money will be used to fund scholarships, on-campus transportation and transportation research.
Futhermore, Gee said parking rates were raised 8 to 10 percent since last year.
“People that complain that if we sell to a third-party vendor that the rates would go through the roof, they are already going through the roof,” Gee said. “Of course we will negotiate to keep them down.”
After expenses of enforcement, maintenance and parking facilities, OSU is expected to gain $3,684,805 from parking permit sales and event parking costs in 2011, according to projected data from OSU Transportation and Parking.