An Ohio authority issued $86.3 million in bonds to build a parking garage at the University of Akron’s campus.
The bonds, sold by the Development Finance Authority of Summit County, mature between 2043 and 2058, yielding between 5.55% and 6.02%. They received a rating of Baa2 from Moody’s Investors Service.
In July, the university announced that it would outsource parking in a move that is expected to increase parking costs for University of Akron employees and new students for the first time in almost 20 years.
The authority will lend the bond proceeds to UAkronPark Inc, a nonprofit created to run the university’s parking system. UAkronPark will work with SP Plus Corporation, a national parking company.
Previously enrolled students will not see their parking fees increase. New students who want to park on campus will pay nearly double their previously enrolled peers.
The university expects to receive tens of millions from the deal, the Akron Beacon Journal reported. SP Plus is expected to spend tens of millions in repairs and maintenance over the course of the 35-year deal.
“That gives us an opportunity to have someone else pay for renovating the parking decks and parking lots and for us to get some upfront revenue to sort of start paying off some debt,” University President Gary Miller told Akron Beacon Journal in July.
The bonds are special limited obligations of the authority, payable by loan repayments from UAkronPark, which is supported by SP Plus parking revenue from the university.
KeyBanc Capital Markets Inc served as underwriter on the issuance, purchasing the bonds for $84 million. The price reflected a discount of $2 million. DiPerna & Company LLC served as municipal advisor.