Introduction to the Parking Concession
- July 10, 2023
This fall, The University of Akron will begin its partnership with UAkronPark, a non-profit entity that will manage the day-to-day operations and maintenance of the parking system.
In entering into the partnership, The University of Akron will monetize its parking assets through a long-term concession (the “Concession”) transaction, in order to:
- Generate an upfront capital payment that can be used to help The University of Akron achieve its growth targets and advance its strategic priorities.
- Improve the physical condition of the facilities that make up the parking system.
- Provide a better customer experience by outsourcing the operation to an experienced, professional third-party parking operator.
- Improve the operation and management of the system using technology and parking industry best practices.
- Focus on its core mission of educating its students.
Once closed, the Concession transaction will provide The University of Akron with an upfront payment expected to be in the tens of millions of dollars. The Concessionaire will invest millions in additional funds over the first five years of the Concession to address deferred maintenance and to bring the parking system up to standard (including the demolition of the Exchange Garage).
UAkronPark is a non-profit entity and will distribute an estimated tens of millions of dollars to The University of Akron for reinvestment in academic mission over the term of the Concession.
When the deal closes, The University of Akron will receive an estimated payment of tens of millions of dollars. The University will also transfer capital maintenance and life cycle costs for 35 years, outsource operating risk, while retaining ownership & ownership rights (including the right to set rates and change policies) and benefit from a continued revenue stream from surplus parking cash flows.
The Concession Agreement will be between The University of Akron and UAkronPark (the “Concessionaire”), a non-profit entity controlled by the Development Finance Authority of Summit County (DFA), pending approval by its Board of Trustees. The Concession will be managed by an asset manager (Diogenes Capital) which, in turn, will oversee the operation of the parking system by an experienced parking operator (SP+ Corporation). Both the Asset Manager and the Operator have extensive experience in concession and parking operations management, and both have continued the employment of key university parking employees in order to ensure continuity of processes and institutional knowledge.
As a non-profit entity the Concessionaire operates the parking system for the ultimate benefit of the University and pays all surplus cash flow from the parking revenues, after operating expenses and debt service, to The University of Akron. Diogenes and SP+ are private companies, engaged by the Concessionaire to manage and operate the parking system for a fee and neither company participates in the parking revenues.
Despite the complexity of the documentation, the Concession Agreement merely enshrines The University of Akron’s rights of ownership and the Concessionaire’s obligations to operate and maintain the parking system and to hand it back to The University of Akron at the end of its term in good condition.