Just how much of a cash cow is a zoo, anyway?

The city of Los Angeles may find out soon if it follows through on Mayor Antonio Villaraigosa's notion of turning over noncore city assets to businesses, either by contracting out the operations or out-and-out selling them.

In a wide-ranging session with Business Journal editors and reporters last week in advance of Tuesday's election, Villaraigosa said he hoped to help plug a budget deficit by privatizing some operations.

"Why do we have to own a zoo?" he said. "A lot of cities don't own their own zoos; they are privately run or have a public-private partnership structure. And, while we're at it, why do we have to own a convention center?"

The city is facing a $450 million deficit in the 2009-10 fiscal year beginning July 1 and a projected deficit of at least $500 million the following year. Villaraigosa is looking for major revenue sources other than tax increases that can whittle down those deficits, and prevent massive layoffs of city workers and cutbacks in city services.

Villaraigosa is also exploring whether Los Angeles should make a long-term lease arrangement with a private operator for its parking garages, surface lots and parking meters.

The city of Chicago late last year announced that it had struck a 75-year lease worth $1.16 billion with a consortium led by Morgan Stanley Infrastructure Partners, an investment fund raised by New York investment house Morgan Stanley, to maintain Chicago's 36,000 parking meters, manage collections and implement technology upgrades.

Late last week, Los Angeles was soliciting bids from law firms and other consultants to look at the viability of a similar deal for L.A.'s parking meter and parking structure system. One of the firms bidding for this work is Chicago law firm Baker & McKenzie LLP.

"No one had really thought of doing this until Mayor Richard Daley in Chicago proposed this last year. Now, cities all across the country are looking into it," said Leonard Gilroy, editor of the annual Privatization Report published by the Reason Foundation.

But other cities aren't talking about selling their zoos or convention centers or setting up long-term partnerships to run them.

Rather, cities are giving zoological societies greater roles in zoo operations, said Steve Feldman, spokesman for the Association of Zoos and Aquariums in Washington, D.C. Feldman said Atlanta; Memphis, Tenn.; Pittsburgh; Sacramento; and Seattle have all gone in that direction or are considering doing so.


For reprint and licensing requests for this article, CLICK HERE.