I’m no economist, so I won’t even claim to know if this makes sense. It does make the Howard Slusher / Frances Dyke deal look like chump change – with us as the chumps, of course. 6/4/2012.
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It only makes sense if the university is unable or unwilling to run parking as a profit maximizing operation, or if the university is credit constrained, or faces higher borrowing costs than a private firm.
The most likely explanation is the first. The university can’t tow and impound the cars of students or professors or charge high fines without internal political opposition.
After privatization, the university can say that these are the not their policies, but those of the private lessee. So the lessee can bid more than the profit stream of the current university run operation.
I am surprised that this lease is legal. I don’t think OUS rules would allow it in Oregon. Of course, it’s not clear how long those rules will still apply to UO.