YPSILANTI – Eastern Michigan University is looking forward to continuing to dialogue with members of its faculty union, students, the Ypsilanti City Council and others about the agreement to monetize its parking operations in a 35-year agreement with Preston Hollow Capital/LAZ Parking. The agreement will bring the University an upfront payment of $55 million, with funds directed toward needed capital improvements and to bolster University reserves.
“We respect the Ypsilanti City Council's actions to gather more information about Eastern Michigan's new parking arrangement,” said Geoff Larcom, Eastern Michigan University executive director of media relations. “The agreement significantly enhances the University's parking operations – resulting in improved services, more capital investment/improvements to parking facilities, and more jobs for our community.
"It is important to note that the City Council's actions in this process are only related to the issuance of tax exempt bonds, not to approval of the project itself, which has already received Board of Regents approval and will proceed. If necessary, non-tax exempt bonds will be issued that do not require City approval. If this were to happen, Eastern's upfront payment would be decreased, impacting the University's efforts to address the Higher Learning Commission mandate that Eastern implement plans to improve its financial position.
"It also would impact planned capital improvements to academic and student buildings on campus that were announced previously, including renovations to Sill Hall, the Rec/IM, the Quirk/Sponberg Theatre building and the Science Complex, to expand lab space for the new neuroscience and fermentation science programs in that building. Funds from the parking agreement will be used to finance those projects."
The agreement caps parking rate increases at significantly lower levels than in recent years. Annual increases will be capped at 5 percent for the first five years of the agreement – compared to an annual 17 percent average increase for students since 2010. After the initial five years, in 2022, the maximum annual increase will be 4 percent or the average annual increase in the Consumer Price Index for the preceding five years, whichever is greater.
LAZ Parking has indicated it will hire eight employees compared to the five positions the University had in its parking operations. All current staff has either hired on with LAZ or moved to other positions at the University. LAZ already has conducted an employment fair on Eastern’s campus to recruit more student workers.
Background on tax-exempt bonds issuance
The federal Tax Equity and Fiscal Responsibility Act of 1982 requires the financing and issuance of tax exempt notes be approved by a governmental entity having jurisdiction over the area where the project assets are located (i.e., Ypsilanti City Council).
The City of Ypsilanti would have no financial obligation on the issued bonds, it would not be considered in the city's credit worthiness, nor would they be factored in the city's financial statements.
About Eastern Michigan University
Founded in 1849, Eastern is the second oldest university in Michigan. It currently serves more than 20,000 students pursuing undergraduate, graduate, specialist, doctoral and certificate degrees in the arts, sciences and professions. In all, more than 300 majors, minors and concentrations are delivered through the University's Colleges of Arts and Sciences; Business; Education; Health and Human Services; Technology, and its graduate school. EMU is regularly recognized by national publications for its excellence, diversity, and commitment to applied education. For more information about Eastern Michigan University, visit the University's website.