Lexington, KY - As the University of Kentucky looks to improve and expand its on-campus housing, one option currently under consideration is a public-private partnership with Memphis, Tenn.-based Education Realty Trust (EdR).
The two entities are in negotiation as the university examines whether it would be more economical for it to pursue a partnership or a traditional university-issued bond. In the past, the university would issue bonds and pay for the debt interest with revenue from residence halls. With the current option, EdR, one of the country's largest owners, developers and operations of collegiate housing, would cover the expenses of building and renovating the buildings, using no taxpayer dollars and with no financial commitment from the University.
EdR has selected Sherman Carter Barnhart as the architect and Messer Construction as the general contractor for the proposed project, and they have said that they plan to pull as many employees as possible for the project from the local market to stimulate the economy in Lexington.
"We've been in the business for 50 years working with colleges across the nation," said Tom Trubiana, chief investment officer and executive vice president at EdR, which has developed 33 privatized on-campus housing communities across 23 states since 2000. "We were delighted to be selected, and now we are in a very collaborative process with the university on everything from design of units to the financing."
UK's on-campus revitalization is part of "The Kentucky Promise," which President Eli Capilouto describes as an initiative to revitalize the core of campus, enhance undergraduate education, offer more opportunities to young Kentuckians through scholarships, and continue a nearly 150-year legacy of education, research and service to the commonwealth.
"We can't continue down the path that we're on, because our rental rate increases have been going up about 6 percent per year," said Angie Martin, vice president for budget and treasurer at UK. "So many (residence halls) need to be replaced. We currently have 6,000 beds, and we want to grow to over 9,000 beds. To try to do that and issue debt, the rates would be to the point where students couldn't afford them."
The initial project will include roughly 600 beds for an Honors residence hall located on Haggin Field along University Drive. Projected building sites in the future include projects on north campus for renovations on Boyd, Blazer, Holmes and Jewell Hall. On central campus, projects are predicted for the Kirwan/Blanding complex. Once the university has finalized the first phase, they will look into consolidating graduate and family housing on south campus near Commonwealth Stadium and the Arboretum.
According to UK's Office of the President, the university currently has 22 undergraduate residence halls that house 5,145 students and 861 apartments housing graduate students and families. The residence halls' ages average 44 years and the apartments average 48 years, leaving the University with a deferred maintenance exceeding $205 million.
UK's present room configuration is out of date and fails to meet the needs of the administrators and students. "Traditional" configuration - a petite, two-person room with common bath/showers down the hallway - accounts for more than 80 percent of the current housing. This configuration is one that simply doesn't accommodate today's students.
"From a recent study, it's clear that students who live on campus have a noticeably higher retention rate and graduation rate," said Martin. "We currently house about 90 percent of freshmen on campus, but the goal is to have more students residing on campus. We are building the number of beds to accommodate that goal, and are even looking into a requirement for freshmen to live on campus. Most students already live here so it wouldn't hinder them, and of course, we would have an exemption - those who already live in Fayette County."
With the new plan, the university's goals are to provide space for living, learning and socialization, while ensuring that the product is highly desirable to the students. EdR is currently collaborating with the University by submitting various plans and alternatives to meet the multitude of needs.
"Everyone is focused on affordability," said Trubiana. "I'm confident that we'll be able to deliver an exciting new honors college residence that the University and its students will feel very positive about - and it will be at affordable rents to the students."
This month, the university plans to hold open forums with the community to discuss its plans. The hope is that the community will embrace the project as one that benefits the Lexington community while providing an opportunity for students to have a natural, rather than abrupt transition from on-campus to off-campus living.
The first development - the Honors and Innovative Learning and Technology residence hall, which is being designed to include rooms for classes and common areas for work-study - is expected to open around August 2012. The timeline for the entire project is projected to be between five and seven years.