OSU students, faculty unsure about pending $483M parking lease
Published: Monday, June 4, 2012
Updated: Saturday, June 16, 2012 01:06
Ohio State officials announced the highest bid for leasing university parking assets to an outside firm as $483 million, and many students and faculty are still unsure on the possible deal.
The school began looking to privatize parking assets about a year ago, and is planning to make a decision whether to go forward with the plan sometime soon.
Joseph Alutto, OSU’s executive vice president and provost, said he was not surprised the Friday bid was $108 million more than the basement price set for bids at $375 million.
“I’m not surprised by the fact that it came in much higher,” Alutto said. “The overall number is high, which gives us the flexibility to invest in the quality of the institution.”
Alutto stressed this was not a “done deal,” and there are still several stages to go through before making a recommendation to the Board of Trustees.
If recommended to the Board and then passed, the private company, which has yet to be named, will take over operations of all permit sales, parking lots and parking garages for a 50-year period.
Alutto said there was a 5.5 percent cap on the annual increase in parking rates over the first 10 years, and he said this guarantee might ease some previous concerns.
“That was one of the issues we heard of concern from students as well as faculty and staff. And we were able to push that issue with the vendors and get that as a commitment on their part," Alutto said.
Paul Beck, a professor in political science and member of the Faculty Council, agreed with Alutto that the 5.5 percent cap was an improvement.
“I am relieved that the bid being considered limits the private operator to annual increases in parking fees of 5.5 percent … rather than the 7.5 percent originally proposed,” Beck said.
Another Faculty Council member, Enrico Bonello, a professor in plant pathology, was not convinced the proposal was a good deal for the university.
“This is tragic for Ohio State, because it shows a complete top-down control of the financial well being of the institution, one which, in this case, is based on a huge gamble,” Bonello said.
Alutto said the administration has a number of meetings and planning stages set before making its recommendation to the Board at its meeting June 21-22.
“There is no fixed date on when we are going to make a formal recommendation, but it will be after we have all of these meetings next week,” Alutto said. “They’re going to be meeting with the parking advisory committee, meetings with staff members, and of course ultimately there’s a university staff meeting next week.”
Shelly Hoffman, university spokeswoman, told The Lantern this $483 million bid was the highest by at least 10 percent, making a “last-and-final-offer round” irrelevant.
Some students think the deal is bad for the university, and administrators should seriously consider all the short-term and long-term consequences.
“I don’t think that it’s going to make any money for the university. It’s a short-term conclusion for a long-term plan,” said Jon Christ, a fourth-year in marketing. “They’re going to make a lot of money up front, but 25-30 years from now, they’ll be in debt for those kind of things.”
Bonello said the deal is risky mostly because it is impossible to predict a financial climate 50 years from now.
“Could people in 1962 have predicted what those financial assumptions would have been over the next 50 years?” Bonello asked.
Stephen Steckel, a second-year in design, said he understands the business perspective the university is coming from.
“If you own that business, and they’re going to give you $500 million for parking, I’m going to take it,” Steckel said. “I would definitely sell it off.”
President E. Gordon Gee said he expected the bids to be near $400 million, and that he hoped the bids would reach near $500 million.
Officials will release additional information about the bid, the bidder and the process moving forward to the June 21-22 Board meeting.
Dani Myers contributed to this story.