A bid to hand over on-campus parking to a private partner has netted Ohio State University (OSU) a milestone offer: a $483 million lump-sum payment in exchange for a 50-year concession agreement.
But Ohio State stressed no deal with highest bidder QIC Infrastructure Group (QIC) – a unit of fund manager Queensland Investment Corporation – has been finalised, noting the university brain trust will contemplate a formal endorsement in a June 21 board meeting.
Nevertheless, the Queensland proposition – one of three the Australia-based outfit presented to OSU in response to a request for qualifications (RFQ) the school issued in September – is $108 million more than the $375 million asking price Ohio State established in 2011, when the university revealed its plan to become the first-ever educational institution in the US to privatise parking.
In addition, the $483 million figure is the second-highest to be put up for a proposed US parking lease to date: Los Angles and Pittsburgh, which both balked at privatising parking, walked away from $300 million and $450 million, respectively. Only Chicago fared better, hauling in $1.16 billion for a metered parking lease in 2009 and $563 million underground parking lease in 2006.
By comparison, Indianapolis in 2010 leased its metered parking for $20 million. A recent tender from Wilkes-Barre in Pennsylvania is asking for between $20 million and $30 million.
QIC had offered Ohio State an even-bigger payout: $523 million in a deal with an annual 7.5 percent rate increase cap. Queensland also proffered $509 million with a 6.5 percent cap. But OSU selected the $483 million package, which has a 5.5 percent yearly cap.
With its $483 million bid, QIC, which is teaming with LAZ Parking to pursue the OSU deal, made a larger offer than Macquarie Group and Industry Funds Management (IFM), both of which are also being considered by the school.
Sydney, Australia infrastructure powerhouse Macquarie, partnered with Central Parking Systems, offered $417 million, while IFM, with Parking Solutions, has put together a $390 million deal.
For its part, OSU has said its parking system is capable of generating $28 million annually. The university is planning to use the money earned from the lease to shore-up its endowment.