Public Private Partnership Announcement
Eastern Kentucky University selected F2/GC, LLC, a cooperative venture between F2 Companies, LLC and Grand Campus Properties, LLC, to serve as developer for its first ever public-private partnership.
In support of this new avenue of financing, the Kentucky legislature, in its 2014 budget, authorized $75 million for EKU’s endeavor. After an extensive competitive bidding process, the Student Housing Developer Request for Proposal (RFP) Committee unanimously recommended that the University select the F2/Grand Campus partnership as its new student housing contractor because of the appealing financing terms, the extensive value-added components and the quality of the construction.
The public-private partnership will enable Eastern to add two new residence halls on its Richmond campus. In addition, as a value-added component to the winning F2/Grand Campus bid, the University, through restructuring the current lease for the 16-acre student housing complex known as Grand Campus, will receive title from Municipal Acquisitions to the land and assets of the Grand Campus facility, as well as a pedestrian bridge connecting Grand Campus to the University.
Capitalizing on the current interest rate and market conditions, the value-added restructuring of Grand Campus offered by F2/Grand Campus was completed this week. An additional value-added component will be the construction of the Carloftis Gardens and EKU’s first parking garage.
The two new residence halls represent the second transaction, and the final documents will be executed at a later date. The second transaction will close out the RFP process. In order to meet the projected delivery date for occupancy in fall 2017, F2/Grand Campus has agreed to start construction on the new residence halls in advance of a finalized contract.
At a time that the level of state appropriations for higher education is a hotly debated topic, EKU officials note that no state appropriations are used in the public-private partnership. The University provides the ground lease and will own, manage and maintain the buildings. Additionally, operating expenses and management fees will flow to the University in this financing structure.
“Gov. Matt Bevin has challenged us to be creative in financing new projects, and that is exactly what we’re doing here,” said EKU President Michael Benson. “These new facilities will change the face of our University forever. Such additions are an important part of our revitalization efforts, which are totally focused on enhancing the student experience.”
EKU Executive Vice President and University Counsel Laurie Carter said the partners were chosen because of “the quality of construction, the length of the lease, the University ownership of title, and their ability to meet the aggressive timeline.
Michael Fite, on behalf of F2/GC, LLC, said: “We are very excited to partner with Eastern Kentucky University for this unique project that will have a substantial impact on the University community. We have put together an impressive team and have worked proactively with the University to make sure this project will fill the needs of Eastern students for years to come.”
The development team includes Municipal Acquisitions, a Washington, D.C. based real estate company that invests exclusively in the public sector real estate market, and has significant experience with higher education public-private partnerships. “The involvement of Jon Kling and his team at Municipal Acquisitions was crucial for the success of this project,” added Fite. Other development team members include Kentucky-based EOP Architects and D.W. Wilburn Inc.
One of the new halls will replace the recently razed Martin Hall, built in 1961, near the intersection of Lancaster and Park Drive. The Carloftis Gardens, to be designed by noted landscape designer Jon Carloftis, will serve as an entranceway into the new Martin Hall and enhance the curb appeal of the campus, especially along Lancaster Avenue. The new Brockton Hall will be constructed on Kit Carson Drive on the site of the former Brockton Apartments near the University’s New Hall. When New Hall opened in 2013, it was the University’s first new residence hall in more than 45 years. The addition of new Brockton and new Martin replace residential housing with a combined age of 111 years. Both new halls, totaling more than 1,110 beds, are expected to open by Fall 2017. The two new suite-style residence halls will each feature recreational space, study rooms, community kitchens and a classroom to be used for credit courses, as well as a variety of enrichment programs. In fact, one faculty member will reside in each hall, providing a stronger connection between academics and the University’s residential life program.
“We want, with our residence halls, to provide an optimal environment for students’ education,” said April Barnes, assistant dean of students. “The college student is looking for a campus that’s investing in them and their future.” Nationally, such investments result in higher retention and graduation rates. “It will also permit us to attract more of the best-and-brightest students,” Carter said. “Students have options. They consider academic programs, of course, but they also look at facilities.”
While the facilities will certainly offer students more modern amenities than some of the University’s aging residence halls, EKU has kept its students in mind and remained focused on the price point during the design and construction phase. “We’re not talking luxurious amenities in the new halls,” Barnes noted. “Our goal is simply to provide students with quality housing.”
“The City of Richmond is excited to see EKU add new residence halls to the campus, which in return will attract new students,” said Mayor Jim Barnes. “All the progress being made to the campus will ensure growth and continued success to EKU and our community.”
New residence halls are only a portion of $160 million in renovations and additions at EKU. Also in progress or in planning stages are a renovated student union and new recreation and wellness center, both financed by a student fee approved last year; a new dining facility, financed by the campus food vendor; and athletic facility renovations and additions, financed by private funds and a University bond issue; among other projects.
“We will remain undeterred in our ambitious revitalization of campus,” Benson said.