Dive Brief:
- Ohio State is giving companies until December to outline a financial and operational plan for managing the massive university’s energy use in its latest privatization venture.
- Columbus Business First reports OSU is the first college to consider leasing out its energy management and is prepared to offer a 50-year lease to operate and maintain the school’s utility system, buy its energy, hit efficiency goals, and sign an affinity agreement.
- OSU expects to see savings from the lease agreement that it can put toward research and teaching initiatives, though it won’t ask for actual bids from potential partners until next year.
Dive Insight:
Public-private partnerships are becoming a staple of higher education leadership as institutions look to monetize their facilities in the face of shrinking state funding. Parking and housing have been the most popular so far. OSU, for example, leased the management of its parking lots and garages in 2012 for $483 million over 50 years. The university system in Georgia inked a 40-year deal for its housing operations, which will include 12,000 beds once 3,000 new ones are constructed.
While privatization deals can be lucrative, especially in the short-term, administrators must consider the long-term needs of the institution. Investors are only interested if they can make a profit. The City of Chicago will forever exist as a cautionary tale for would-be dealmakers. The privatization of its parking meters was infamously bad for city finances.