Eastern Michigan University is considering a move to monetize its parking system under a long-term agreement, transferring operations to a qualified partner in exchange for an upfront payment to the University that would help fund long-term investments in academic facilities and programs.
Such an agreement could range from 30 to 50 years, with the immediate goal of improving the University’s financial position by bolstering its financial reserves. Such a move would strongly increase the University’s borrowing power and investment income, as it seeks to continue to invest in academic facilities for high-demand programs.
To this end, the University has issued a RFQ (request for qualifications) of interested partners that might qualify for a formal bidding process, to occur later this summer.
Under such an arrangement, future parking revenues would flow to the new partner in exchange for the large upfront payment to EMU. The agreement would likely have limits on future parking rate increases and under any such agreement EMU would adhere to all collective bargaining agreements.
EMU’s consideration of such a move occurs against the difficult economic conditions universities face across the country, including a drastic reduction in the relative level of state funding, a smaller pool of prospective students and rising student debt – resulting in a need to rethink the status quo of traditional funding sources.
This is the next step in the process of exploring options to increase revenues to the University, and any such agreement would be subject to approval by the Board of Regents.
The RFQ states the following: “Eastern is seeking an experienced operator to allow for cost-efficient operation and management of the parking system, and ensure best practices that safeguard the interests of the users of the parking system.”
The document requests a variety of qualifications for possible bidders, including allowing for the orderly transition from existing University operations in a timely manner.
Applicants must provide an overview of the team’s experience in managing, operating, and maintaining (by contract, lease, or ownership) parking spaces in multiple facilities.
Eastern Michigan University, which has more than 21,000 students, has more than 9,700 parking spaces, spread over two garages, 36 parking lots and 179 meters.
Applicants will need to show expertise in areas such as parking operations and maintenance, customer service, system enhancements (including implementing new technology), along with safety and security.
Special considerations include the ability to maintain University parking systems in the event of inclement weather, along with the integration of parking systems into campus life for events such as athletic events, move-in and graduation.
The possible arrangement resembles one in place at Ohio State University, which transitioned management of its parking services in fall 2013 for a payment that went directly into the university’s endowment and will help fund items such as financial aid, faculty recruitment and facilities.
Ohio State estimates that over the 50 years of the lease, the payment will provide significant investment earnings as well as greatly increase its long-term investment pool. In making such a switch, Ohio State stressed its priorities were teaching, learning and research, and not managing parking operations.