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Project Profile: Ohio State University Parking Facility

Ohio State University Parking Facility

photo credit: CampusParc LP

Location

Columbus, Ohio

Project Sponsor / Borrower

The Ohio State University

CampusParc LP

Program Areas

Alternative Project DeliveryProject FinanceValue Capture

Value Capture Techniques Asset Recycling
Mode

Parking

Description

In 2012, the Ohio State University (Ohio State) leased its Columbus campus parking facilities, and management of its daily parking operations, to a private concessionaire as part of an innovative funding strategy. The 50-year agreement generated a $483 million upfront payment that the university has invested in its endowment for scholarships and other initiatives core to Ohio State's academic and research mission.

The concessionaire, CampusParc LP, is a specially formed company controlled by QIC, an Australian investment manager. Operations and maintenance are contracted to LAZ Parking, a Connecticut-based parking operator. Over the lease term, CampusParc is responsible for the operation of Ohio State's parking system which comprises approximately 36,600 spaces across the Columbus campus.

CampusParc's responsibilities include management of the parking permit system, parking enforcement, customer service, motorist assistance, event parking management and parking facility maintenance. CampusParc collects all operating revenue from the parking facilities (parking permit sales and hourly parking fees). Rates increase by 5.5% per year for the first 10 years and 4% per year or the rate of inflation, whichever is higher, for the remaining 40 years. Net revenue from parking citations is returned to the university after operating expenses are deducted.

Ohio State retains the rights to all final policymaking decisions including permit eligibility, rates, space designation and the addition or reduction of available parking, although the university would have to compensate CampusParc if more than 2,200 parking spaces are permanently removed.

CampusParc will have invested more than $34.5 million in major facility repair and upgrade projects in the first seven years of the agreement, including:

  • Faster entry and exit lane equipment
  • GarageTracker that makes garage occupancy levels available on smartphones
  • Smartphone-enabled and pay-by-plate payment options
  • Software to better analyze parking trends and a customer feedback program
  • LED or induction lighting upgrades in all garages, including installation of solar panel equipped pay-and-display parking meters
  • Preventative maintenance program to increase service life and minimize downtime of mechanical equipment

Through fiscal year 2019, Ohio State estimates the total value created in its endowment fund from the $483 million upfront payment to be $242 million. Over the 50-year term, Ohio State estimates the value generation to be $3.1 billion. The endowment distributions are being used for student scholarships, hiring new tenure-track faculty, and support for capital projects in the Arts District. Funding has also gone to supporting the Campus Area Bus Service and other initiatives that provide sustainable transportation options. Through fiscal year 2019, $46.8 million in asset-recycling value generated from the lease payment has been invested these transportation services.

Cost

$535 million - Total cost to the concessionaire

  • $483 million - Upfront lease payment to the university
  • $52 million - Transaction and other upfront costs
Funding Sources

Concessionaire's original financing structure

  • Senior bank debt (5-year mini-perm facility) - $265 million
  • Senior bank debt (capex facility) - $20 million
  • Equity (100% from QIC) - $250 million

Concessionaire's refinancing structure (2013)

  • Private bond issue (30 years) - $285 million
  • Equity - $250 million
Project Delivery / Contract Method Long-term Lease Concession (50 years)
Private Partner

CampusParc LP

  • QIC Global Infrastructure, on behalf of its managed funds and clients
Project Advisors / Consultants

To Ohio State University

  • Morgan Stanley - Financial Advisor
  • Jones Day - Legal Advisor
  • Desman Associates - Technical Advisor

To the concessionaire

  • Evercore Partners - Financial Advisor
  • Allen & Overy - Legal Advisor
  • WSP - Technical Advisor
Lenders

Original financing

  • Banco Bilbao Vizcaya Argentaria (BBVA)
  • Mitsubishi UFJ Financial Group (MUFG & BTMU)
  • Wells Fargo
  • Sumitomo Mitsui Banking Corporation (SMBC)

Current financing

  • Bondholders
Duration / Status

Preferred bidder selected June 5, 2012

OSU Board of Trustees approval June 22, 2012

Concession conclusion 2062

Financial Status

Financial close September 21, 2012

Refinancing close December 19, 2013

QIC refinanced its debt a little more than a year after closing by issuing private placement bonds to repay its bank loan. Initially, it was thought QIC would wait several years to establish a solid track record of operations before seeking a bond issue, but attractive market conditions accelerated that option.

Innovations
  • First long-term lease of a university parking facility.
  • Facilitated university investments in scholarships and other initiatives core to Ohio State's academic and research mission.
  • The deal exceeded the upfront lease payment floor price of $375 million by $108 million.
  • Concession transferred value from a non-core asset to the university's academic priorities
Related Links / Articles

Concession Agreement

CampusParc at the Ohio State University

QIC Marks Fifth Anniversary Of CampusParc At Ohio State

The 50-year agreement: OSU's $483M parking deal stands alone among other schools after year 1 (The Lantern December 19, 2013)

Parking lease supports Ohio State's academic mission

OSU Administration & Planning article on parking lease and benefits
Contacts

Sarah Blouch
President & CEO, CampusParc LP
Tel: (614) 816-2420, ext. 102
sblouch@campusparc.com

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