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
| Dec 15, 2014
Studio Gang tapped for American Museum of Natural History expansion
Chicago-based Studio Gang Architects has been commissioned to design the $325 million Gilder Center for Science, Education and Innovation at the American Museum of Natural History in New York.
| Dec 12, 2014
Dunkin’ Donuts launches certification for green restaurant buildings
The company aims to build 100 new DD Green-certified restaurants by the end of 2016.
| Dec 12, 2014
COBE's striking 'concrete finned' scheme wins competition for Adidas' flagship building in Germany
Danish firm COBE has been announced the winner in a contest to design a new Adidas flagship building in Herzogenaurach, Germany. It beat out 29 other teams, including REX and Zaha Hadid.
| Dec 12, 2014
SOM names winner of One World Trade Center photo contest
Gerry Padden's winning photo offers a striking juxtaposition of the Brooklyn Bridge with the sparkling One World Trade Center tower.
| Dec 11, 2014
2015 Architecture Firm Award goes to Ehrlich Architects
The AIA Architecture Firm Award, given annually, is the highest honor the AIA bestows on an architecture firm and recognizes a practice that consistently has produced distinguished architecture for at least 10 years.
| Dec 11, 2014
Moshe Safdie awarded 2015 AIA Gold Medal
The AIA Gold Medal, voted on annually, honors an individual whose significant body of work has had a lasting influence on the theory and practice of architecture.
| Dec 10, 2014
International Olympic Committee releases first images of new HQ in Switzerland
Designed by 3XN, the new headquarters is located within a park on the shores of Lake Geneva and adjacent to historic Château de Vidy, which has been the iconic home of the IOC.
| Dec 10, 2014
CannonDesign acquires Astorino, forms design-led design-build division
The merger also extends CannonDesign’s presence in the markets Astorino currently serves, namely Pittsburgh and Abu Dhabi.
| Dec 10, 2014
Must see: Babina's latest illustrations cast famous architecture quotes as colorful road signs
Babina has adapted quotes from famous names such as Frank Lloyd Wright, Alvar Aalto, and Mies Van Der Rohe.
| Dec 9, 2014
Steven Holl wins Mumbai City Museum competition with 'solar water' scheme
Steven Holl's design for the new wing features a reflective pool that will generate energy.