EMU is privatizing parking services. Would it make sense for you?
Earlier this year, we were reading about the process Eastern Michigan University was going through to evaluate outsourced parking services. They are looking at long-term agreements in the range of 30-50 years, which would transfer operations of the campus parking to a 3rd party to strengthen their financial reserves. The private group would pay a lump sum, an upfront payment to the campus for the contract. In addition, all future revenue from parking would be theirs.
The approach mirrors Ohio State University who negotiated a 50-year agreement with a private group in 2013. The upfront payment, in that case, was over $480 million.
Privatization in the parking industry comes in other forms as well.
In 2008, Chicago signed a $1 billion deal with investors who took over the City’s parking meters. They replaced them with new technology and quickly increased the parking rates. Between 2008 and 2013, the metered rates downtown increased from $3 to $6.50 per hour. Some reported that this led to parking permit fraud with people illegally using disabled permits to get around the high fees. Things did not go smoothly as the investors soon looked to the City for significant compensation for lost revenues as a result of street closures for repairs or events.
Last year, we published a blog How Beneficial is 3rd Party Parking Management where we talk about the pros and cons of different approaches to outsourcing part or all your parking management. For smaller parking operations, technology can help alleviate some of the resource-heavy tasks that might make a parking operation inefficient. In fact, when managed correctly, it can generate revenue opportunities that make it a more viable operation.
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