Privatizing IU parking off table for now
By Jon Blau
Indiana University is no longer on the road to outsourcing its parking stock after the IU Board of Trustees learned Thursday that those assets would probably be worth about $275 million, well short of the nearly half-billion number Ohio State cashed in on with its lease.
However, the board’s vote didn’t take privatization completely off the table.
The trustees accepted Chief Financial Officer MaryFrances McCourt’s recommendation not to outsource parking, because the revenues of leasing lots in Bloomington and Indianapolis were not “compelling” enough to lose control of those assets. Instead, a parking task force will be formed to look at improving the bottom line and operations. That group will come back to the trustees in February with some proposals.
McCourt’s presentation showed that Bloomington’s and Indianapolis’ parking assets would probably sell for about $275 million, compared with the 50-year, $483 million deal Ohio State agreed to in 2012. IU’s analysis, working with the investment banking firm Goldman Sachs and Walker Parking Consultants, showed that privatization would earn IU about $20 million more over the course of a 50-year lease than IU parking operations would under the current system.
But Trustee Randall Tobias, who chaired the finance committee’s meeting in Franklin Hall, said it was imperative that the university have a plan for addressing parking before saying outsourcing isn’t an option altogether.
“You’ve done a great analysis,” Tobias said to McCourt, “but unless it’s operationalized -- and we need to be sure it’s going to be operationalized -- otherwise the privatization option becomes more attractive because we know they will operationalize.”
“Today is not the day to say, ‘End of paragraph, turn the page, we’re never going to talk about this anymore,’” he said. “But, 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.”
Tobias said it’s his “assumption” that the parking task force will find the solutions that a private firm would have created.
“It makes no sense to privatize parking if we have the discipline ourselves to do what would be attractive for a private investor to do,” Tobias said.
Only Trustee Pat Shoulders dissented from endorsing the proposal, but not because he was for privatization — in fact, just the opposite. He took exception to having the analysis of outsourcing, which he said was originally sold to the trustees as important because IU could make money, now being “morphed” into a debate about the need for parking changes.
Shoulders went as far as comparing the break in conversation to America’s reasons for going to war in Iraq.
“This thing did not come to us because of an issue that related to parking, it came to us as a method (to raise money),” Shoulders said. “I’m happy to vote for a motion that says we’re not going to monetize parking. I’m not happy to vote for a motion that says, ‘Parking is a problem and we have to do something about it.’”
The trustees will continue their two-day slate of meetings at 9:30 a.m. Friday in Franklin Hall, with a meeting in the Presidents Hall concerning Provost Lauren Robel’s proposal to merge the IU School of Journalism and the departments of communication and culture and telecommunications.
The move would take journalism out of Ernie Pyle Hall and into Franklin Hall and has been pitched as a way to modernize programming, locating multiple media-focused entities in one building.
Editor's note: This story from The Bloomington Herald-Times is being published here as a courtesy for readers of IU in the News.