The Journal of College and University Student Housing - Volume 43, No. 2 - 79

Public-Private Partnerships in College Student Housing

tuition to meet costs, state policies mandated a
tuition freeze between 2007 and 2011 to stem
rising prices for students. Thus, the university
was situated in a challenging financial landscape that necessitated budget cuts, prohibited
pay raises and requiring furloughs of personnel. ASU is located in an urban environment
in close proximity to a major metropolitan
area. In the last 10 years, there has been an
explosion of private development surrounding the university, with numerous new apartment complexes that cater to students within
walking distance of campus.
In the early 1990s, Atlantic State University became more selective and reduced enrollment in an effort to improve its position in
national rankings. As ASU's national reputation improved, it experienced higher yields
of admitted students. By 1996, demand for
student housing at ASU exceeded supply. The
university's housing department ran a waiting
list of more than 1,000 students5 and even
leased a nearby hotel to achieve the required
number of beds. In the words of one mid-level
administrator in the housing department: "We
needed housing and we needed it fast." In the
past, new residence halls were typically constructed through auxiliary bonds issued by the
housing department. Policies enacted by the
state university system prohibited self-support
(or revenue-generating) units from constructing buildings that would increase the system's
overall debt. As the director of housing facilities explained, "The [state's] AAA bond rating
was not going to be jeopardized by having projects that were just for housing when the academic community ... needed its buildings." If
For comparison, the institution's on-campus housing stock
included approximately 9,500 beds in 2016.
5

ASU was going to build new housing facilities,
it would need to finance the project without affecting the system's bond rating.
Seeking alternative finance arrangements.
Facing a multi-year bed deficit, ASU started
looking into alternative finance arrangements.
Aware of increasing national discussion of
PPPs in campus housing, the vice president
for finance created an assistant vice president
(AVP) for asset management position in 1998.
This person specifically helped ASU explore
options related to PPPs. ASU issued a request
for proposals for apartment-style housing catering to upper-division students shortly after
the AVP arrived. The hope was that upperdivision students would move off campus,
creating space for a larger number of first-year
students. A development company, Apex, proposed to build an entirely private apartment
complex adjacent to campus; however, ASU
proposed instead that Apex work collaboratively with the university through a public-private
partnership.
Apex agreed and purchased the land adjacent to campus on which the apartments would
be built; they then gifted it to ASU. For its
part, the university established a 501(c)(3) (26
U.S.C.§ 501) non-profit organization, which
one interviewee described as a "quasi-public
investment arm," responsible for issuing and
managing bonds. Using this form of debt financing, ASU paid Apex a developer fee to
build the apartment complex, then negotiated
an agreement for Apex to manage the property
for an additional fee. Because the bond was
issued by a separate non-profit organization,
the project, according to one interview participant, was considered "off-the-books" - or
absent from the institution's balance sheet.
V O L U M E 4 3 , NO. 2 * 2 0 1 7

The Journal of College and University Student Housing - Volume 43, No. 2

Table of Contents for the Digital Edition of The Journal of College and University Student Housing - Volume 43, No. 2