Privatization a Plus for First-Time Housing Development
- By Janet Wiens
- October 1st, 2008
Many colleges and universities have provided on-campus student housing for decades, while other institutions are getting into the housing market for the first time. Developing, constructing, and managing student housing is an effort that requires experience and marketplace understanding. To achieve success, many college and university officials elect to privatize development for their first residence hall projects, an approach that offers numerous benefits.
Growing in Virginia
Robert Bland College (RBC) of the College of William and Mary is Virginia’s only Junior College. This past July, the College celebrated the opening of its first residence halls, making it the only two-year public institution in the state to offer student housing.
“Projections show that Virginia’s college system will have 50,000 more students within the next 10 years,” said Dr. LeAnn Binger, RBC’s director of institutional advancement. “Research showed overwhelming support for a two-year residential college, which led us to construct student housing.”
The transformation from a two-year institution without housing to a residential college involved the construction of two new residence halls to accommodate 250 students. Each building features one-, two-, three-, and four-bedroom apartments, and are part of a plan that will ultimately accommodate five residence halls.
“We did not use a development partner, but we did privatize financing for the $20M project through the RBC Foundation,” noted Binger. “By issuing tax-exempt bonds through the Industrial Development Authorities of four counties, we were able to expedite our construction schedule in order to open the halls this year.”
The Summit at Queens College
Administrators at Queens College of the City University of New York, Flushing, knew they wanted to provide student housing, and they also knew that they did not want to undertake the effort alone. When it came time to develop the first residence hall for the campus, officials retained one of the national leaders in the development and management of quality student housing and mixed-used communities on or near university campuses as its partner.
“We did not have the staff or the experience to do this project on our own,” said Sue Henderson, vice president of institutional advancement at the College. “Privatizing development gave us access to the resources and experience that we needed to design and construct the project, as well as providing for ongoing management.”
The $72M project, which will open in fall 2009, will provide 506 beds. The design reflects the character of the existing campus and respects the scale and aesthetics of the neighborhoods surrounding the development. Designed for sustainability, the residence hall is expected to meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design requirements for Silver certification.
“We have been a commuter school and recognized that an increasing number of our students desired to live on campus,” Henderson stated. Partnering with a development company “enabled us to fully understand all the nuances associated with student housing, including market demand, financing, long-term maintenance, and daily operations. Privatization was the right choice for us.”
The College of Staten Island
First-time residence halls to house 600 students at the College of Staten Island (CSI) will include the construction of three residential buildings totaling approximately 167,000 sq. ft. The new residential village will be the first on the 204-acre campus, the largest of the 23 campuses of the City University of New York.
Part of the goal of evolving to a residential campus is to lure scholars from around the nation and the globe to the school, said Dr. Tomas D. Morales, CSI’s president. The three new buildings will herald a new era for CSI, a commuter school since its founding in 1976 with the merger of two former schools — Staten Island Community College and Richmond College.
“It's an exciting project, a long time in coming,” said Dr. Morales. “We're hoping to provide students with the opportunity to have a collegiate residential experience. Students from Staten Island will live with students from other parts of the country and other parts of the world. We feel it's going to be a major transformational development at the college.”
To achieve the transformation to a residential school, CSI is working with Washington, DC-based WDG Architecture and a Texas-based company of developers, owners, and managers of high-quality student housing communities, who will construct and manage the halls for CSI.
"The plan is to build a residential community as opposed to simply a place where you sleep," said Dr. Morales.
LSU – Alexandria Builds for the Future
In 2003, the Louisiana State University (LSU) – Alexandria, became a four-year institution, a move that necessitated construction of student housing. As at Queens College, officials elected to work with a development team to facilitate the process.
“Constructing our first residence halls was only one of many aspects that changed for us,” says David Wesse, vice chancellor for finance and administration. “We knew that we needed to partner with people who really understood the market for student housing.”
The project team included Toby Cortez, an independent financial consultant with experience in student housing, and a Florida-based development company, which provided multiple services, including design, construction, and program scheduling. The $12.5M project provided 256 beds in four buildings as well as a clubhouse. Additional housing will be constructed in the future as demand increases.
“We learned early that caution must be part of our approach,” Wesse noted. “Unforeseen circumstances, such as the hurricanes that we’ve experienced in recent years, can impact numerous aspects of a project and campus life in general. Our partners helped us to make smart business decisions.”
Larry Williams, director of procurement at the University, adds that the money spent on their financial advisor and their development partner was money wisely spent. “The consultants that we retained helped us to avoid mistakes that would have produced negative consequences for us in the future,” he said. “Securing expert help for a first-time student housing project was a good investment for us and one that we would advocate for others.”
As an example, Williams noted that they were advised that the goal was for the property to pay for itself and that making money was a plus. They were also advised that it might take several years to reach 100 percent occupancy, a situation that has an obvious impact on finances.
“Our team helped us to provide housing that features amenities and living configurations that students desire while also having a rent structure that is comparable with off-campus housing,” Williams said. “Partnering with experienced consultants was very positive for us and enabled us to successfully achieve our short-term goals while also planning for long-term success.”