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
| Aug 11, 2010
USGBC honors Brad Pitt's Make It Right New Orleans as the ‘largest and greenest single-family community in the world’
U.S. Green Building Council President, CEO and Founding Chair Rick Fedrizzi today declared that the neighborhood being built by Make It Right New Orleans, the post-Katrina housing initiative launched by actor Brad Pitt, is the “largest and greenest community of single-family homes in the world” at the annual Clinton Global Initiative meeting in New York.
| Aug 11, 2010
AIA report estimates up to 270,000 construction industry jobs could be created if the American Clean Energy Security Act is passed
With the encouragement of Senate majority leader Harry Reid (D-NV), the American Institute of Architects (AIA) conducted a study to determine how many jobs in the design and construction industry could be created if the American Clean Energy Security Act (H.R. 2454; also known as the Waxman-Markey Bill) is enacted.
| Aug 11, 2010
Architect Michael Graves to be inducted into the N.J. Hall of Fame
Architect Michael Graves of Princeton, N.J., being inducted into the N.J. Hall of Fame.
| Aug 11, 2010
Modest rebound in Architecture Billings Index
Following a drop of nearly three points, the Architecture Billings Index (ABI) nudged up almost two points in February. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.
| Aug 11, 2010
Architecture firms NBBJ and Chan Krieger Sieniewicz announce merger
NBBJ, a global architecture and design firm, and Chan Krieger Sieniewicz, internationally-known for urban design and architecture excellence, announced a merger of the two firms.
| Aug 11, 2010
Nation's first set of green building model codes and standards announced
The International Code Council (ICC), the American Society of Heating, Refrigerating and Air Conditioning Engineers (ASHRAE), the U.S. Green Building Council (USGBC), and the Illuminating Engineering Society of North America (IES) announce the launch of the International Green Construction Code (IGCC), representing the merger of two national efforts to develop adoptable and enforceable green building codes.
| Aug 11, 2010
David Rockwell unveils set for upcoming Oscar show
The Academy of Motion Picture Arts and Sciences and 82nd Academy Awards® production designer David Rockwell unveiled the set for the upcoming Oscar show.
| Aug 11, 2010
More construction firms likely to perform stimulus-funded work in 2010 as funding expands beyond transportation programs
Stimulus funded infrastructure projects are saving and creating more direct construction jobs than initially estimated, according to a new analysis of federal data released today by the Associated General Contractors of America. The analysis also found that more contractors are likely to perform stimulus funded work this year as work starts on many of the non-transportation projects funded in the initial package.
