Public-private financing of housing project a first at UNR
The University of Nevada, Reno, is turning to public-private financing of a campus housing project for the first time with an apartment complex that’s under construction on Evans Avenue just south of Peccole Park.
The project, 132 one- and two-bedroom apartment units for graduate students, replaces 40 small and aging units built in 1960. The old units have been demolished.
UNR and Balfour Beatty Campus Solutions struck a public-private partnership in March to develop the new apartment complex.
The development deal with Balfour Beatty Campus Solutions came about as UNR shoulders an already heavy debt load.
The school is preparing to break ground on the Cooper Court undergraduate student housing project at Cooper Court and Sierra Street. That project, a five-story, 400-bed facility to be built by Sundt Construction and designed by Collaborative Design Studio of Reno, should be completed by July of 2015. Its price tag — $38.6 million — pushes the university near the limits of its serviceable debt load, says Jerry Marczynski, associate vice president of student life services.
“We will be adding to our debt limit big time,” Marczynski says. “When we looked at the graduate family housing project, we have not really done apartments before, and that’s why we made the decision to do public-private partnership with a private developer.”
Under the agreement, Balfour Beatty will finance the roughly $20 million project and lease the ground from the university for 42 years for about $60,000 per year. At the end of the term, ownership of the buildings will revert to UNR. The college will manage student placement and food service and will staff the building, services that will be compensated by Balfour Beatty.
The firm, which was founded in Great Britain and now works across the world, has a long history with student and military base housing projects, a key factor in its selection, Marczynski says. Three years ago the college put out a request for qualifications, and four firms responded. Two were interviewed.
“Balfour had more experience with multi-unit apartment complexes, Marczynski says. “They came to the table willing to finance the project. They are a very reputable international company, they had the experience, and they were offering what we wanted and could do it in a reasonable budget.”
UNR is under no obligation to guarantee the new graduate student housing units are fully occupied, and rents constitute Balfour’s sole revenue stream from the project. That fact is why the agreement is for such a lengthy term, Marczynski says.
Balfour Beatty will use its own construction company for the project, but it also will employ many local subcontractors. Though the firm is responsible for the project’s design, it’s working with the college to ensure the look of the apartments fall within university guidelines. The stick-built buildings will feature HardiePlank siding rather than the brick facades found throughout the campus.
Marczynski says the additional graduate student housing will help grow the university’s graduate programs and satisfy a demand for more and better accommodations on campus.
“The university wants to continue to increase its graduate student enrollment, and one of the pieces of the package when we are trying to get the best grad student is what kind of housing is available. It is in a key location close to the medical school and a lot of the research labs. If these are immensely popular we may look at another project down the road.”
Marczynski says the college will wait to determine the feasibility using similar financing mechanisms on future projects after the graduate student housing center is built and fully operational. The apartments are expected to be ready for occupancy in August of 2014.