Every February, senior management professionals working in the public and private sector come together for an educational three day conference to discuss complex issues surrounding public-private partnerships (P3s). This year’s Public-Private Conference & Expo, one of the largest gatherings of development professionals in the world, takes place on February 23-25 at the Sheraton Hotel in Dallas, Texas and will feature Onvia as an exhibitor. The agenda at this year’s conference features several talks about higher education and P3s. One of the topics on the agenda, entitled “From the Rucksacks to the Backpacks: How MHPI Can Reinvent Student Housing” is described as: “Today, higher education institutions find themselves in similar predicaments; on average 60% of a school’s space is over 25 years old and they face a backlog of $92 per gross square foot. Despite increased demands, rising costs, fixed revenues and decreased endowments have stalled renovation and new construction projects on campuses across the country.”
According to an article in the publication Planning for Higher Education, state and local funding for colleges and universities continues to plummet while enrollments and demand for on-campus housing continues to rise. The increased housing demand puts a strain on already outdated infrastructure. As a result, many colleges and universities have been swayed to consider P3s for their capital needs. Private renovations, depending on the state, may offer more freedom than a state renovation alone.
With the construction of new housing, universities are also looking for ways to cut operational costs. From leveraging energy from renewable resources to recycling programs, P3 projects are helping universities develop more long terms sustainable cost cutting measures. Most renovations and new builds are done in phases over several years. For example, Onvia’s Spending Forecast Center revealed that Southern Illinois University allocated 37% of their budgets in 2013 and 2015 to new student housing and updating current housing. Their overall budget went up by $10 million in 2015 yet they still allocated the same percentage.
P3 Partnerships in Action
For several years, Northern Illinois University has received approval from their Board of Trustees to continue to fund new housing partnerships with a private developer called Collegiate Development Services (AKA Servitas), a not-for-profit, Texas-based organization that offers turn-key real estate development services to colleges and universities across the country, specializing in residence halls. The company currently has developments in progress at more than a dozen other universities across the country. A partnership with Servitas allow for the construction of the facilities without any state or student funds. In the last two years, Northeastern Illinois University started working with P3s to develop multi-phased student housing to include both residential and retail space. The partnership allows for the corporation to develop and operate housing and related facilities.
University of Iowa recently finished a P3 student housing complex. Housing officials believed using a P3 was the most cost-effective option, and had support from several community leaders. They chose Balfour Beatty and its partners to design, build, finance, own and operate the $31 million development made up of 270 units, it broke ground in 2013 and opened in August 2014. Balfour Beatty Campus Solutions will manage the financing and ongoing operations of the project through a 40-year ground lease.
Another example is Southern Oregon University Ashland that entered into a P3 housing project with American Campus Communities to build a 702 bed housing complex. The housing complex was completed in 2013, meeting all Americans with Disabilities Act (ADA) requirements.
P3 Housing Partnerships in Development
Onvia’s Project Center also shows that at the end of 2014, University of South Carolina put out an RFQ (request for qualification) to build new student housing on campus using a P3 partnership. They are looking to construct a 34,600 square foot, three story student housing building that will include 24 garden style apartments. The budgeted amount for this project, not including the parking lot, is approximately $3.1 to 3.3 million. Construction is scheduled to be completed by fall of 2015. The new building will be a “Green Building” because of their commitment to the idea of sustainability. The University partnered with Holder Properties to construct the housing facility using recycled materials. When completed, the building will contain light shelves on windows to help increase daylight while keeping rooms cooler as well as low flow faucets and showerheads, dual flush toilets and high efficiency washers which will conserve over 2 million gallons of water per year. Investing in energy efficient materials means overall saving for the University in the years to come.
Another example shows that in 2014, Florida International University also selected Servitas to develop, finance, construct, own and operate a student housing facility on its Biscayne Bay Campus. The new building is set to be completed in fall of 2016 with a budget of $57.6 million dollars.
Why get LEED Certified
LEED, or Leadership in Energy & Environmental Design, is a green building certification program that recognizes best-in-class building strategies and practices. In our research we’ve noticed that LEED certification is now a requirement in many P3C student housing opportunities. For example, the majority of California State University campuses require new university housing buildings or renovations be LEED Certified and the project developers to have LEED professional credentials to demonstrate their leadership in the field and in-depth knowledge of the LEED rating system and green building strategies. To receive certification, building projects must satisfy prerequisites and earn points to achieve different levels of certification.
Some of these prerequisites include:
- Sustainable Site Selection
- Water Efficiency
- Energy and Atmosphere
- Sustainably Sourced Materials and Resources
- Indoor Environmental Quality
The increasing demand for student housing is not something schools are naive about, however receiving approval to break ground can take years of planning. Hesitancy comes from universities lack of understanding the P3 process, which can be overcome with the right bidding process and selecting the right developer. Events like P3C highlight the challenges and advantages of the P3 concept.
For more information about P3’s and how Onvia’s suite of government business intelligence tools can help contractors identify potential partnerships, stop by and visit Irv Alpert and David Levesque at P3C. We’ll be exhibiting at booth #39 and Irv can be reached prior to the show at firstname.lastname@example.org if you’d like to schedule a time to chat. See you there!