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https://www.bizjournals.com/losangeles/news/2021/10/07/university-public-private-partnerships.html After a quiet 2020, colleges and universities are starting to return to an increasingly popular option for development that mitigates overall risk and reduces upfront costs: public-private partnerships. Schools from University of Southern Maine to University of California Merced are once again turning to private developers for projects ranging from residence halls, dining facilities and student centers to powering campuses. Developers who work with universities are reporting upticks in requests for proposals for P3 projects this year compared to 2020. Jessica Wood, an analyst with S&P Global, said in a recent interview that P3 projects in higher education aren't going away and pointed to the "huge growth" in such projects over the past 5 to 10 years. North Carolina State University in Raleigh, for example, recently struck a deal with Charlotte, North Carolina developer Lincoln Harris LLC and its financial partner, The Goldman Sachs Group Inc. in New York, to reimagine its Centennial Campus. Development of the site, entitled for up to 4 million square feet, is hoped to capitalize on the university's robust technology and life-sciences programs, where start-ups can be fostered. "Our goal here is to provide an area where those collision points between the public and the private sector occur," said Johno Harris, president of Lincoln Harris. Jay Pearlman, senior vice president of advisory services of Chicago-based The Scion Group LLC, works as a consultant on student-housing projects, including P3 deals, and said that partnering with a developer ensures speed to market and provides access to expertise that universities may otherwise lack. "Institutions saw a reduction in both operating funding and visibility to capital investment (in 2020) ... There is no free money but being able to harness another financing mechanism with external capital is very attractive to a lot of institutions right now," Pearlman said. University of Southern Maine, for its part, earlier this year broke ground on a student center and adjacent residence hall -- the first student housing option on its Portland campus. The school is partnering with Birmingham, Alabama-based Capstone Development Partners LLC, a national student housing developer specializing in P3 arrangements, to bring expertise and knowledge the university did not have in-house. Glenn Cummings, USM's president, said in an interview that the residence hall is meant to offer more affordable housing options to students who typically rent off-campus apartments in an increasingly expensive market. He added that the project paves the way for future developments using P3 models across the university system. "We decided that we really wanted to work with the developer because the level of skills, the understanding of how to develop the project rapidly, the attraction of having a developer who knew where the supply chain was, was all very, very helpful," Cummings said. USM is applying $19 million in state bond funding to the cost of the $26.6 million Career and Student Success Center, and the $72.8 million, 580-bed residence hall will be funded with university revenue bonds. Revenue generated by the residence hall will fund annual debt-service payments. Likewise, New Jersey Institute of Technology in Newark initially determined a public-private partnership would be the best delivery method for a new $95.3 million residence hall to avoid adding a debt obligation and to benefit from the expertise and efficiency of a national partner who would own and operate the facility, said NJIT senior vice president Andrew Christ. However, the Covid-19 pandemic resulted in increased financing costs for student-housing projects, driving up the room rental rates to a point where NJIT realized it would be unaffordable for its students. NJIT decided to maintain the P3 relationship, and use the expertise of the national developer but enter into a master lease structure, Christ said. That enabled the financing to occur based on the credit rating of NJIT, saving millions of dollars in interest costs and maintaining affordability. "We have considered expanding our campus residential capacity for several years as our enrollment has grown significantly," Christ said. NJIT reported total fall 2020 enrollment of 9,870 students, up 5.3% from five years earlier. Dallas-based RISE Residential Construction LP, which has done P3 deals with universities since 1995, worked with NJIT on its recent housing project. Jeremy Doss, senior vice president at RISE who heads up P3 pursuits, said the pandemic presented unique challenges in getting the deal to closing and built. In hindsight, though, deciding to proceed on the project in the spring of 2020 likely offset extra costs plaguing projects today, as construction prices have shot up 20% since. "Everybody else is getting off the fence right now," Doss continued. "Some (projects) we're passing on because we don't want to spread ourselves too thin." A growing reliance In the early days, public-partnership deals were typically pursued by middle-market schools -- up to 10,000 students enrolled, Doss said. Today, it's become an accepted, mainstream approach for institutions large and small, public and private. Higher-ed P3s have increased from $100 million across three transactions in 2003 to $3.1 billion in 28 deals in 2016, according to data from Ernest & Young LLP. EY says some experts believe that volume could reach $5 billion in the next five years. Not only have the number of deals grown, the projects have also become more complex and expensive. A P3 deal at University of California Merced that wrapped last year totaled $1.3 billion alone. __________________________________________________________________________________ https://www.enr.com/articles/51909-maine-higher-ed-projects-move-forward-despite-challenging-market Project: Portland Campus Development Project Location: University of Southern Maine, Portland Cost: $99.4 million The 580-bed hall will be the first student housing on the Portland campus designed to international passive house certification. The project includes "a high-performance thermal exterior envelope and low-energy use mechanical systems," says Mike Leonard, vice president of construction operations, PC Construction. Expected to use 50% less energy than a building built to code, the project is "on track to be the second largest university passive house building in the U.S. and the seventh largest passive house building of any type in the country," according to a university spokesperson. Construction of the 218,000 sq-ft LEED-silver targeted residence hall began on May 20, with substantial completion expected by June 2023. The building will include four wings, two of which will be five-stories high and two of which will be eight-stories. The wings will form a parallelogram enclosing a half-acre semi-private residential courtyard. The team is currently demoing existing facilities and working on concrete foundations, including pile caps and a variety of footings and ground improvements, such as rigid inclusions, stone columns, rock anchors and auger cast piles. In work on the adjoining 42,000-sq-ft Career & Student Success Center, "intense building information modeling coordination for the in-slab conduit" will allow it to be concealed in the exposed mass timber section of the center, Leonard notes. The coordination will also "allow the cross-laminated timber decking to be fabricated with troughs and cutouts to lay conduit and install junction boxes," he says. Elkus Manfredi Architects is serving as the design architect while SMRT Architects & Engineers is the architect of record. John Martin, principal at Elkus Manfredi, says "USM's vision as conveyed to the development and design build team, was to have two new buildings that would manifest the university's commitment to all three aspects of holistic sustainability - environmental stewardship, social equity, and economic prosperity. As such, the team worked diligently to make the student rental rate affordable by leveraging PC Construction's intimate knowledge of the subcontractor market and efficient materials sourcing in a pandemic-challenged economy." ___________ Plans call for a new 43,000 square foot student center, a new 580-bed, 220,000 square foot residence hall, and associated campus improvements. As of May 20, 2021, a designer is not disclosed. Bidding for contractors and a firm construction timeline has not been established. * * Project information, including timeline and contacts, has been obtained through public sources. The content management team continues to pursue additional details; however, the contact(s) listed have yet to disclose or confirm any information. Inquiries should be directed to the contact(s) listed. *This project timeline has been extended due to the public health crisis.