Town and Gown Alike Benefit from University Redevelopments
- Aug 29, 2016
Higher education is in the midst of a financial crisis. As a result, new ideas are flourishing to address the challenges. As cost reduction solutions and potential new revenue streams are explored, more university administrators are taking a closer look at their real estate portfolios, present and future. Visionary and progressive university leaders are viewing real estate as a means to protect campus boundaries, provide community services and support innovation by attracting top students, faculty and administrators.
Updating and building new facilities remains key to recruiting new students and faculty. With university public funding sources drying up, public-private partnerships (otherwise known as P3s) are an increasingly popular way to tap fresh capital to help transform and revitalize underused space or support new developments. For example, budget constraints led a public California university to form a cooperative $150 million public-private partnership to fund a 32-acre housing development and acquire additional facilities to support booming enrollment growth. On the East Coast, Howard University is converting an underused residence hall into off-campus luxury apartments as part of its strategy to reduce expenses and boost its credit strength.
Often, the benefits of these projects are not just limited to the university, but have positive knock-on effects on the surrounding region, such as improving property values or spurring economic development. Real estate strategies supportive of a greater purpose can help bridge the stereotypical divide between “town and gown.”
Here are a few of the shared benefits that can result from successful public-private partnerships:
Community. Walkable communities are all the rage: people want shorter commutes and Millennials, in particular, are attracted to live-play-work environments that are rich with culture. University districts offer the perfect landscape for creating these communities, with more administrators realizing the benefits that mixed-use developments can offer for students, talented faculty and young professionals in the area.
For example, The Ohio State University transformed a neighborhood on the southern edge of its campus into a mixed-use development with apartments, retail stores, restaurants and entertainment space anchored by a film center. The development, as part of a partnership between the university and the city of Columbus, spurred hundreds of millions of dollars of additional investment within the surrounding neighborhoods and reinvigorated the area.
Safety. On-campus student safety is always a priority for universities, but it is challenging to ensure the same level of safety in off-campus areas surrounding the university where many students live or work. Revitalizing neglected areas of the community can be a safety win both for educational institutions and the neighborhoods. When the Georgia Institute of Technology initiated a campus expansion nearly a decade ago, it created a $180 million mixed-use urban village in a depressed Atlanta neighborhood adjacent to campus. Now known as Technology Square, the area is thriving and has become an anchor for downtown redevelopment. The Ohio State University has also received accolades for increasing stability and livability within the Weinland Park neighborhood, working with community partners to acquire one of the nation’s largest scattered-site portfolios and revitalizing the neighborhood while improving the affordable housing stock.
Innovation. Universities are a natural breeding ground for research and innovation. A smart partnership strategy can help universities and the larger region harness that energy for the greater economic good. Drexel University in Philadelphia recently announced its partnership with Brandywine Realty Trust to redevelop the 12.5-acre off-campus Schuylkill Yards site into an innovation neighborhood that will bring education and research institutions together with business to help drive economic growth and jobs.
Partnerships can be tricky but the results can have major benefits beyond the educational institution. As the costs of sports programs continue to rise and public funding remains scarce, universities may well consider developments beyond the traditional student housing and retail projects to include parking or even power plants.
Whatever the project, the key to success is making sure that the various stakeholders have a shared vision—and thinking both town and gown can reap the greatest rewards.