CHICAGO – Indiana University has tapped Goldman Sachs to act as an advisor on a proposed privatization of the university’s parking system that would raise cash to help offset falling state aid.

IU’s proposal follows Ohio State University’s precedent-setting parking system privatization earlier this year, which raised $483 million for the university.

Goldman was one of a handful of respondents who replied to a request for proposals the university sent out to select firms earlier this summer. Officials declined to say how many firms responded to the RFP.

The firm will work with the university for six to nine months. If IU decides to solicit bids, Goldman will help evaluate the responses, according to the school.

Goldman will act as IU’s main advisor on the deal. The school also plans to hire two other financial advisors, one as a parking advisor and a third firm to “act as second set of eyes” on the deal, IU Treasurer MaryFrances McCourt said in a recent interview.

The school plans to soon issue a request for proposals for a parking advisors, a spokesman said.

IU selected Goldman in part because of its experience with other major public-private partnership deals, including the Chicago Skyway, Indiana Toll Road, Puerto Rico PR-22 and PR-5.

“Goldman Sachs brings established expertise in this type of matter,” McCourt said in a statement Thursday. “The university has taken a comprehensive and judicious approach to this issue from the beginning, and this is the latest step to ensuring that all the facts are in hand so that the university can make an informed decision.”

IU has $75 million of parking fee-backed debt that would need to be defeased in the event of a long term lease or sale.

The board of trustees last month approved the study of a 30- or 50-year lease of the school’s parking systems on its Bloomington and Indianapolis campuses.

OSU in June became the first public university to privatize its parking system 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.

IU receives about 20% of its revenue from the state. In fiscal 2010 and 2011, Indiana cut the school's aid by $22 million and $29 million. For the current 2012-2013 biennium, the Indiana General Assembly reduced aid by 2%, or $9.1 million.

 

 

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