IU considers outsourcing parking to private company

Ohio State University raked in nearly $500 million after agreeing to lease campus parking for the next 50 years to a private Australian company.

Three months later, IU is looking into the outsourcing option in hopes of reaping a similar profit to fund academic initiatives.

“We are looking at all sorts of ways to be able to hold down tuition rates and fund different academic programs,” said Senior Vice President and Chief Financial Officer Neil Theobald.

One of the ways to do that, Theobald said, is to lease University-owned parking spaces in Bloomington and Indianapolis. Long-term outsourcing of parking operations would allow University efforts to be focused on academics instead of a non-core service such as parking, he said.

“That’s not our mission here,” Theobald said.

The benefits, if the University decides to follow through with privatized parking, will be similar to the up-front payment received by Ohio State.

Although University officials estimate private companies won’t bid quite as much for IU parking — particularly in Bloomington, as parking revenues in IU-Bloomington trail far behind those of Ohio State — it is uncertain at this point how much the University can make.

“That’s the stage we’re at,” he said. “We’re very early in the process.”

At the Board of Trustees meeting in August, Theobald reported that the University would soon be finalizing requests for proposals.

IU Associate Vice President for Public Affairs and Government Relations Mark Land said the proposals would then allow University officials to assess what sort of interest exists among companies wishing to bid for parking on either IU campus.

Similar motions to privatize non-core University services occurred in July 2007 after trustees decided to lease the rights to the campus bookstore to Barnes and Noble.

The 10-year lease provided the University an estimated $70 million, money trustees recommended be used, among other things, for renovations to Ballantine Hall.

Theobald said outsourcing parking would be a similar situation, noting that leasing the IU Bookstore was successful because “Barnes and Noble knows more about running a bookstore than we do.”

Both Theobald and Land said it is too early in the process to determine how students will be affected. The Ohio State University Transportation and Parking Services could not be reached for comment about the effects of its outsourcing.

Theobald said the privatization would benefit students by creating programs that streamline the degree-seeking process, a long-term area of focus for the University.

“By giving up control, the university/campus wouldn’t have much (if any) control over the price charged for parking and wouldn’t have any control over what happens to the employees that work in parking,” Land said in an email.

During a phone interview, Land said it was too early to determine the exact repercussions outsourcing could have for current Parking Operations employees.

Parking Manager Doug Porter said about 40 individuals are currently listed on the Parking Operations payroll, which includes parking enforcement, staff and hourly employees who operate parking garages and pay-to-park lots.

Even if a change in ownership occurred, Land said, a need would still exist for workers to manage the lots and garages.

“The goal would be to maintain as many jobs as possible,” Land said. “But instead of working for the University, they would be working for the vendor.”

Theobald said the earliest a decision will be made is still several months away.

At this time, IU has not decided which companies will be contenders for the outsourcing if the plan is carried through.

In the meantime, Theobald said, University committees are meeting with constituent groups, including student representatives, and outlining the terms under which IU will agree to the privatization.

“As resources get tight and we’re trying to drive down costs of attending, we need to consider all of our options,” Theobald said.