Chicago had sold, well leased for 99 years, four of its parking garages. Its also leased out the skyway. Indiana has privatized its toll road, and word is that Midway airport and the Jersey turnpike are on the block. What’s happening?
One answer, according to Rick West, Parking entrepreneur and moderator of the panel on this topic at the upcoming Park Across America is that infrastructure is getting old. much of it was built 30 or more years ago and need considerable repair and maintenance. The garages in Chicago, for instance will need to be completely rebuilt in the next 50 years, at a cost of over $500,000,000. The cities find themselves in the position of having to come up with this huge chunk of change to maintain their assets.
However, they can sell (or lease) the asset to the private sector, with the understanding that the bidder will have to maintain and repair the asset and return it to the city in 50 or 100 years in pristine condition. The city gets considerable money up front it can use to pay off the debt on the asset and then for other purposes, and the bidder gets an asset it can promote as only the private sector can. A win-win
There are other political, financial, and management (what is our core competency) issues, but that big maintenance bill certainly is first is getting the municipal, university, hospital, parking authority, attention.
JVH
