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
| Jan 13, 2015
Steven Holl unveils design for $450 million redevelopment of Houston's Museum of Fine Arts
Holl designed the campus’ north side to be a pedestrian-centered cultural hub on a lively landscape with ample underground parking.
| Jan 12, 2015
23 projects win AIA's highest architecture award
Bjarke Ingels' Danish Maritime Museum and William Rawn's Cambridge Public Library are among the winning projects.
| Jan 9, 2015
Santiago Calatrava talks with BBC about St. Nicholas Church on Ground Zero
Calatrava reveals that he wanted to retain the “tiny home” feel of the original church building that was destroyed with the twin towers on 9/11.
| Jan 9, 2015
Nonresidential construction hiring surges in December 2014
The U.S. construction industry added 48,000 jobs in December, including 22,800 jobs in nonresidential construction, according to the Bureau of Labor Statistics preliminary estimate released Jan. 9.
| Jan 9, 2015
10 surprising lessons Perkins+Will has learned about workplace projects
P+W's Janice Barnes shares some of most unexpected lessons from her firm's work on office design projects, including the importance of post-occupancy evaluations and having a cohesive transition strategy for workers.
| Jan 9, 2015
Technology and media tenants, not financial companies, fill up One World Trade Center
The financial sector has almost no presence in the new tower, with creative and media companies, such as magazine publisher Conde Nast, dominating the vast majority of leased space.
| Jan 8, 2015
Microsoft shutters classic clipart gallery: Reaction from a graphic designer
Microsoft shut down its tried-and-true clipart gallery, ridding the world not only of a trope of graphic design, but a nostalgic piece of digital design history, writes HDR's Dylan Coonrad.
| Jan 8, 2015
The future of alternative work spaces: open-access markets, co-working, and in-between spaces
During the past five years, people have begun to actively seek out third places not just to get a day’s work done, but to develop businesses of a new kind and establish themselves as part of a real-time conversation of diverse entrepreneurs, writes Gensler's Shawn Gehle.
Smart Buildings | Jan 7, 2015
NIBS report: Small commercial buildings offer huge energy efficiency retrofit opportunities
The report identifies several barriers to investment in such retrofits, such as the costs and complexity associated with relatively small loan sizes, and issues many small-building owners have in understanding and trusting predicted retrofit outcomes.
| Jan 7, 2015
University of Chicago releases proposed sites for Obama library bid
There are two proposed sites for the plan, both owned by the Chicago Park District in Chicago’s South Side, near the university’s campus in Hyde Park, according to the Chicago Sun-Times.