Indianapolis awards ‘hybrid’ parking deal

The city will accept a small upfront payment and an ongoing revenue stream of $400m from a team led by Affiliated Computer Services in exchange for a 50-year management contract on its parking system. Previous parking leases in the US have focused more on maximising large upfront payments.

The City of Indianapolis has selected a team backed by outsourcing company Affiliated Computer Services to manage its parking system for the next 50 years in exchange for a $35 million upfront payment and a large ongoing share of parking revenues.

Indianapolis Mayor Greg Ballard said in a statement this “hybrid” revenue sharing model – a mix of an upfront fee and ongoing payments – will provide the city with a future revenue stream of $400 million.

The revenue share proposal marks a departure from the parking deals inked by the City of Chicago. In both its 2006 lease of its parking garages and its 2009 lease of its parking meters, Chicago accepted just upfront payments – $563 million and $1.16 billion, respectively – rather than revenue shares over the life of the lease.

Chicago used the proceeds for a mix of budgetary relief, debt-paydowns, cash reserves and other uses. Indianapolis, on the other hand, said it will use its proceeds to bankroll additional infrastructure spending.

“Because of this proposal, significant infrastructure improvements will be completed,” Ballard said. These include streets, sidewalks, bridges and parks in the city’s downtown and Broad Ripple neighbourhoods. Additionally, the deal will bring “new convenient technology” to the management of the city’s parking system.

The technology will include new multi-space parking meters that will give driver the ability to pay with a credit card, Indianapolis said in an information brochure.

The new technology will be provided by Xerox-owned outsourcing company ACS, parking manager Denison Global Parking, parking meter equipment provider Evens Time, who teamed together for the bidding process. In April, they were one of seven groups of investors who were invited to submit detailed proposals for the parking concession.

The ACS team said in its statement of qualification for the bidding that was interested in pursuing a “comprehensive proposal” that would integrate all of the city’s on-street and off-street parking facilities under one contract.

Indianapolis currently oversees more than 15,000 parking spaces, according to a statement.

ACS’ proposal includes the management and operation of all the city’s 3,456 meters, according to the statement.

In addition, Indianapolis will recommend that its city council, which must review and approve the deal, also give ACS the operation of several other parking garages and lots in the city, some of which are owned by the county in which Indianapolis is located.

Users of the parking facilities can expect increases in fees once the contract comes into effect. Indianapolis expects to raise parking rates from $.75 per hour in its downtown area to $1.50 by 1 January 2012.

The city believes the rates are justified, though, given that they have not increased since 1975 and the parking public will be provided with improved services as a result of the ACS contract.