Ohio State estimates it could get at least $375 million up front for a lease of up to 50 years of its parking facilities, and says seven groups that expressed initial interest—including Carlyle Group and Macquarie Group Ltd.—have been invited to make bids. Final proposals are due in May. Carlyle and Macquarie declined to comment.The University believes a one time cash infusion would be better than holding a very profitable service for 50 years.
Ohio State's parking system reaped about $28 million in revenue last fiscal year from permits, fines and other sources, and generated about $19 million in earnings before interest, taxes, depreciation and amortization, according to the university.That 68% EBITDA is chum in the water for PEU sharks.
WSJ didn't say what capital commitments needed to be made for new facilities over the 50 year term. It did speak to parking price increases, which rose rapidly in the Chicago deal.
If the potential privatization goes through, the successful bidder would be limited to maximum annual rate increases of 7.5% during the first decade, after which prices could rise by either 4% or the rate of inflation, whichever is greater.
After ten years parking prices could more than double. That puts college parking in the same league as America's health care system, which ironically PEU's also wish to "save." It's a PEU world, where new doors open for the greed & leverage boys every day.
Update 4-26-12: OSU faculty opposed the 50 year parking lease Carlyle's Infrastructure group must be in New York, because their corporate offices are in Washington, D.C. Their reasons are declared in a resolution.
