After Moody’s and other credit ratings agencies tightened their standards a few years ago, universities had to become much more disciplined about their financing mechanisms.
“Internally, we are paying a great deal of attention to cash on hand relative to debt to maintain our good ratings,” says Gonzaga University EVP Marty Martin. “It’s a constant reference point.”
“The financing climate is different than it was 20 years ago,” notes UC Santa Barbara Campus Architect Marc Fisher, AIA. “The state is not funding construction at the same pace. We’re going to see more student-funded, donor-funded, and research-funded projects. We’ll see more creative funding in the future.”
One such creative funding option is the public-private partnership. The PPP strategy is most popular for student housing, mixed-use buildings, parking facilities, and retail—any project with a revenue stream.
The University of Texas at Dallas recently selected Balfour Beatty and Wynne/Jackson to develop a mixed-use project near the edge of the campus. To be called “Comet Town,” the project will be financed through a land lease, whereby the university will lease the land to the developer who will build, own, and operate the building for a specific period.
Apartments will be open to the public, but most residents are expected to be part of the UT community, says Dr. Calvin Jamison, VP of Administration.
The University of Wisconsin–Madison has employed third-party partnerships sparingly, but did so twice when a private developer needed more space to build on a couple of residential/retail properties adjacent to campus.
The state university also teamed up with the Morgridge Institute for Research a few years ago to build the Wisconsin Institutes for Discovery, a research lab that includes retail/restaurant space. Half of the lab space is privately owned.
In the wake of the recession, Cornell University instituted new guidelines for major capital projects. “One of the pillars of the new policy was no new debt,” says University Architect Gilbert Delgado, AIA. “Funding for all projects has to be either identified or on hand before a project goes forward.”
For Weill Cornell Medical College, a New York City institution since 1898, the university is exploring the construction of a major residential tower with a private developer. “Our goal is to make housing more affordable for students, faculty, and staff,” says Delgado.
To keep rents affordable, future residential projects in the city might include so-called micro apartments about half the size of a studio unit, supplemented with more generous common areas. Delgado says the university is also studying how to build more affordable housing in Ithaca—“maybe through PPP-type land-lease agreements,” he says.
More from BD+C's exclusive report, "How your firm can gain an edge on university projects."
Related Stories
Sponsored | HVAC | Feb 3, 2020
Reliable Building Systems Increase Net Operating Income by Retaining Tenants
Tenants increasingly expect a well-crafted property that feels unique, authentic, and comfortable—with technologically advanced systems and spaces that optimize performance and encourage collaboration and engagement. The following guidance will help owners and property managers keep tenants happy.
Architects | Jan 29, 2020
Frank Lloyd Wright’s architecture school is closing
The school was established in 1932.
Libraries | Jan 23, 2020
Information or community center: The next generation of libraries must be both
Are libraries still relevant in a digital world?
Green | Jan 10, 2020
How the new EC3 tool raises the bar on collective action
Nearly 50 AEC industry organizations partnered to develop the groundbreaking Embodied Carbon in Construction Calculator.
Architects | Jan 9, 2020
AIA selects recipients for the 2020 Regional & Urban Design Awards
The 2020 Regional & Urban Design program recognizes the best in urban design, regional and city planning and community development.
Building Technology | Jan 7, 2020
Tariff whiplash for bifacial solar modules
Bifacial solar systems offer many advantages over traditional systems.
Sponsored | HVAC | Jan 6, 2020
Maximize Energy Efficiency in Class A Office Buildings With Modern Building Systems
Energy-efficient building design starts with the building envelope, but the building systems have a tremendous impact on energy use as well.
Life of an Architect Podcast | Jan 6, 2020
5 most popular Life of an Architect podcast episodes of 2019
Architects Bob Borson, FAIA, and Andrew Hawkins, AIA, LEED AP, produced 25 episodes of the Life of an Architect podcast in 2019. Here are the five most popular episodes of Life of an Architect based on the number of downloads.
Architects | Jan 6, 2020
Merger expands HED’s presence in SoCal
Puchlik Design Associates, its new addition, specializes in healthcare design.
Steel Buildings | Jan 3, 2020
5 reasons to enter the $20,000 Forge Prize
Calling all emerging architects. Don’t miss out on your chance to enter the $20,000 Forge Prize. Submissions for Stage 1 judging are due January 15.