CHICAGO -- Indiana University has dropped its effort to privatize its parking system, saying expected bids would not be strong enough to give up control of the asset for 50 years.

The decision comes after nearly two years of analysis. The university had hoped to lease the system for 50 years to raise cash to offset falling state aid.

The proposal followed Ohio State University’s precedent-setting parking system privatization in 2012, which raised $483 million for the university. IU’s analysis found the university could expect to get just over $200 million.

“We conducted a thorough and inclusive analysis of both the financial and non financial aspects of a long-term parking agreement and, in the end, concluded that the valuation of our parking assets simply wasn’t compelling enough to justify losing control of our operations for 50 years,” MaryFrances McCourt, the university’s chief financial officer, said in a statement. “Our decision is based in large part on the assumption that we will make improvements to our existing parking operations that will result in additional revenue to the university, and we will begin that work immediately.”

IU officials announced the decision Thursday, during a two-day board of trustees meeting.

McCourt was unavailable for comment Friday.

Goldman Sachs was the university’s advisor on the deal. IU hired the firm last November along with Walker Parking Consultants to advise on operations and Greenhill & Co. as independent transaction advisor.

The financial analysis concluded the university could expect bids of around $275 million for its parking operations in Bloomington and Indianapolis. After paying off existing bonds, totalling just under $75 million, the deal would leave the university with about $200 million that it would use to invest in an endowment with annual distributions, according to the school.

The university could generate similar or greater revenue if it fixes up the parking systems itself, officials said. Goals include creating a new parking fee structure, consolidating purchases, and improving efficiency.

“The analysis we did -- both internally and through our external partners -- will be invaluable in helping us move forward with identifying and implementing best practices related to running our parking systems in Bloomington and Indianapolis, as well as at our regional campuses,” McCourt said.

IU officials announced the decision Thursday, during a two-day board of trustees meeting.

OSU in June 2012 became the first public university to privatize its parking system last year when it tapped QIC Global Infrastructure and LAZ Parking for a 50-year lease of the deal. The firms paid $483 million in upfront cash for the asset. Like IU, OSU officials said the lease was needed to generate additional money at a time when state aid is falling.

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