Deals

NJ Transit: a slow train coming

It might be slow-going, but New Jersey Transit is still examining privatised parking. A would-be deal would let the Garden State agency lease its bus stop and train station parking.

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For New Jersey Transit (NJT), a potential state-wide parking concession is still high on its agenda. But getting it over and done with just for the sake of it? That was never the idea.

“This is a dynamic process and due diligence is critical,” said John Durso, a spokesman with NJ Transit.

That due diligence is “essential and extensive” according to Durso. In the interim, the Newark, New Jersey-headquartered agency will defer issuing a request for proposal (RFP) for a private partner.

NJT first came up with its rough draft for a parking concession, named “SPACES”, in 2010 to close a purported $100 million budget gap.

SPACES – short for System Parking Amenity and Capacity Enhancement Strategy – is a projected 30-to-50-year lease notionally worth $750 million, encompassing both bus station and train station parking.

NJ Transit closed its fiscal deficit – largely by way of a 25 percent across-the-board fare increase – but continued to pursue SPACES, enlisting Scott Balice Strategies, a financial advisory firm.

Notably, Scott Balice had urged Harrisburg, Los Angeles and Pittsburgh to privatise parking, and in 2008 guided Chicago in its 75-year $1.5 billion metering parking concession agreement.

As 2010 neared an end, Chicago-based Scott Balice completed a request for qualification (RFQ) campaign, lining up five prospective consortia to bid for a contract, including:

-Carlyle Infrastructure Partners and Nexus Parking Systems;

-Cintra and East Coast-based Edison Parking Corporation;

-JPMorgan Asset Management and LAZ Parking;

-Leveraged buyout pioneer Kravis Kohlberg Roberts & Company (KKR) and Illinois-based commercial real estate company ECI Investment Advisors, teamed with AMPCO Parking Systems;

-Perennial infrastructure powerhouse Macquarie Group, partnered with Standard Parking and TimHaahs, a parking-centric engineering firm.

But by 2011, NJT had to stall its budding parking privatisation.

In contrast to Chicago, a distinct municipality, the agency had to consider what privatised parking would entail on a local level, and put off publishing a RFP.

Durso, however, stressed a parking concession is still very much viable.

To the agency, the rationale for privatised parking is simple: mass-transit is its business, not parking lot management. Private capital, in turn, could be used to improve services.

Meanwhile, the agency has said a RFP is possible by mid-summer.