IU puts Bloomington, Indy parking privatization on hold

Indiana University officials are putting on hold consideration of a plan to seek a multimillion-dollar payout by turning over parking facilities on the Bloomington and Indianapolis campuses to a private operator.

An analysis of a potential lease deal found that the revenue from the privatization wasn't "compelling" enough for the university to lose control of the parking garages and lots, IU chief financial officer MaryFrances McCourt told Board of Trustees members Thursday.

IBJ first reported in August 2012 that IU was considering a parking-privatization effort.

McCourt's presentation showed that a 50-year lease involving the two campuses would probably bring in about $275 million, The Herald-Times reported. That's far less than the $483 million deal that Ohio State University got last year.

IU's analysis, prepared with the investment banking firm Goldman Sachs and Walker Parking Consultants, estimated that privatization would give IU about $20 million more over the 50-year lease than the parking operations would earn under the current university-run system.

University officials began considering the privatization possibility last year. Faculty leaders said many people were concerned about the prospect of rate increases if a private operator took over.

Board of Trustees member Randall Tobias said it is imperative for IU administrators to know how they'll maximize parking revenue before saying outsourcing isn't an option to consider.

"That proposal doesn't really get the job done unless we have a business plan to actually follow through and implement the things that need to be done to achieve the revenue opportunities, the cost-savings, the efficiencies and so forth," said Tobias, a former chairman and CEO of Eli Lilly and Co.

Trustee Pat Shoulders, an Evansville attorney, disagreed with the analysis of outsourcing, which he said was originally sold to the trustees as a way for IU to make money but had "morphed" into a debate about the need for parking system changes.

"I'm happy to vote for a motion that says we're not going to monetize parking," he said. "I'm not happy to vote for a motion that says, 'Parking is a problem and we have to do something about it.'"
 

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