CHICAGO — The Ohio State University board this week will consider a proposal to privatize its parking system for an upfront payment from a private operator.

Several cities have leased their parking assets to private companies, but it would mark the first time that a university has done so, officials said.

OSU officials expects the move will generate up to $375 million in upfront cash.

The university would use the money to help finance scholarships, research, and academics.

Morgan Stanley is advising the OSU board on the transaction. The firm also acted as advisor to Indianapolis when that city entered into its long-term parking lease and was part of the winning investment group Chicago selected when it leased its parking system for 75 years for $1.15 billion in 2009. That deal has come under fire due to problems implementing a new meter system and steep increases in rates.

The OSU board of trustees finance committee will vote on the proposal at its meeting Wednesday night. If authorized, the plan will be voted on by the full board Friday.

The board proposal would allow the university to issue a request for qualifications and begin accepting bids. If approved, no further board action would be necessary to approve details of the lease, officials said.

The school would lease the parking system for up to 50 years, including renewals, for at least $375 million.

As part of the transaction, OSU would defease roughly $80 million of outstanding bonds backed by parking payments.

The parking system — which includes spaces, meters and lots — reportedly generates $30 million in annual revenue for the university.

The concessionaire would be allowed to raise rates by up to 7.5% a year during the first 10 years of the lease. After 10 years, the private operator would be able to raise rates either 4% or at a rate that matches the consumer price index, whichever is greater.

In related news, the board will also vote Friday on authorization to issue up to $500 million of general receipts bonds. Proceeds would be used to finance OSU’s $2 billion capital campaign through 2015.

The debt will be issued before June 30, 2012.

The Big 10 university — one of the largest in the country — is in the midst of a $2 billion capital plan.

Half of the plan is for ProjectOne, a $1 billion expansion of the OSU Medical Center.

The program is considered Ohio’s largest labor initiative and is projected to create up to 10,000 new jobs.

OSU in 2010 issued four series of bonds totaling $1.13 billion and $121 million of notes. Some of the debt was used to build, improve or expand the school’s parking system.

On Friday the board will also vote on the university’s 2012 budget. The spending plan totals $4.9 billion, a 4.8% increase over the current fiscal 2011 budget.

Fitch Ratings and Standard & Poor’s maintain AA ratings on the university, and Moody’s Investors Service rates the credit Aa1.

Ohio State University has $1.9 billion in debt, including its commercial paper program.

Rating analysts note that the university enjoys a strong market position and a good operating performance. However, it could feel pressure from its substantial recent increase in debt that will mean a thinner financial cushion, Moody’s warned.

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