Financing and Planning Student Life Facilities

READ THE FULL SERIES

1. Executive Summary: The Changing Shape of Student Life Facilities
2. Financing and Planning Student Life Facilities (this article)
3. Best Practices in Student Housing Design

This summer, we released an executive summary of the findings from a survey of institutions looking to add new student life facilities in the next year. You can read our executive summary here.

Now, we are following up with lead architects and consultants who work with student life facilities in higher education. In this series of interviews, we are asking these lead experts to comment on the survey findings, trends they are noticing with student life facilities, and practical strategies they would recommend for colleges and universities that are seeking to take a more integrated approach to student life on their campuses.

In this first interview, we have spoken with Eric Moss, director of the Student Life Studio at Ayers Saint Gross, and Julie Skolnicki on how institutions can adopt forward-thinking approaches to financing and planning student life facilities.

1. What especially struck you about the survey findings?

JULIE SKOLNICKI, EdR.
The Academic Impressions survey reinforces what we are seeing across the country: More thoughtful and integrated planning of student life facilities, but some ongoing challenges specifically related to funding hurdles.

University planning for student life facilities has evolved significantly in the past 15 years:

• In the late 1990’s / early 2000’s, recreation centers, student centers and student housing were typically developed independently on the edge of campus.
• In the past 5 years we have seen much greater integration of facilities being co-located, and ideally in the core of campus, to create a more centralized student life experienced.
• The past 2-3 years has seen greater movement than the previous 15 years combined with true facilities, financing and operations integration creating a more dynamic experience for students.
• In the past 2 years, we have also gone from only seeing P3 student housing, to now seeing mixed-use P3 project including the full range of student life and academic facilities.

This evolution has led to an exciting array of financing structures. This provides a university with an opportunity to diversity their funding sources for implementation of their student life master plans to mitigate credit rating impacts and debt capacity concerns, while fast tracking projects to support recruitment and retention objectives.

2. What 2-3 things would you advise an institution to think through on their own before embarking on an RFP for a student life facilities project?

JULIE SKOLNICKI, EdR.
Prior to a university embarking on a RFP, they should spend a few months to identify the strategic goals, programmatic requirements and opportunities for creativity from their prospective partners – so that proposers can focus their efforts to provide the greatest value to the university and the process.

Strategic goals:  It is essential for the college or university to clearly understand what their goals are for the facility and partnership prior to embarking on an RFP.  Clearly state and prioritize key items such as:

• Target market (freshman, sophomores, upper classmen graduate student, faculty & staff)
• Specific recruitment and retention goals
  • Increase out of state or international students
  • Increase GPA of entering freshman class
  • Increase diversity of freshman class
  • Increase retention of freshman to sophomores by X
  • Increase
• Financing
  • Utilize off-balance sheet treatment
  • No adverse impact on debt capacity or credit rating
  • Min and Max Term
  • Maximize revenue to the university

Identifying these objectives will allow the university to see a prospective partner’s approach to problem solving and innovation, and to ensure that the partner understands the institution’s goals.

Programmatic requirements (Non-negotiables): It is essential that the college or university state the programmatic requirements for the project. The programmatic requirements should also be clearly divided by non-negotiables vs. wish list. This enables the prospective partners to provide creative solutions to wish list items yet focus on the core program.

Opportunities for creativity from the consultant, architect or P3 Partner: It is important for the college or university to understand not only what it wants to achieve and which terms are not negotiable, but also the areas where the university wants to see creativity or additional support from the P3 partner. In many cases an institution has decided to seek a P3 partner to solve a particular problem. For example, perhaps the institution would like to utilize an equity or taxable debt model to mitigate risk to their balance sheet but is concerned with the impact of real estate tax. Clear definition of this problem helps the proposers put their creativity toward the most innovative ideas to solve that problem and provide the greatest value to the institution.

3. Considering the most strained P3 relationships within the sector, can you surface any commonalities you see in failed student life P3s? Are there specific factors that failed projects have in common?

JULIE SKOLNICKI, EdR.
Well, let’s look at characteristics shared by the most successful P3 relationships:

• Clearly identified and measurable goals and objectives
• Leadership
• Alignment of interest
• Transparency and strong communication

Projects that have failed or have not lived up to each party’s goals are typically a failure of one or more of the above.

Changing goals and or turnover in key leadership positions tend to be the most common obstacles for partnerships that stall or do not move toward implementation. But lack of alignment of interest and/or poor communications are many times at fault for more subtle bumps in the road during the P3 process. It is essential that a small group of key decision makers from both the institution and the P3 partner align early in the process on strategic objectives, and evaluate the success of the partnership monthly, quarterly and annually to assure mutual success of the partnership in a transparent, open and honest way.

4. What are 2-3 new directions you have seen student life facility planning take in the past couple of years? What key considerations are colleges looking at that they haven’t, in the past?

ERIC MOSS, ASG.
I would say that forward-looking institutions are and need to:

• Support Student Success. Many institutions are making great efforts to align their facilities with their vision to support student success. An appropriate residential experience, for example, especially for freshmen and sophomores, can encourage students to form stronger relationships and reach their academic goals.
• Promote conscientious and sustainable lifestyles. Today’s students care about their impact on the environment. Planning for student life facilities provides an opportunity to measurably minimize resource consumption and educate students about the impacts of their daily actions.
• Welcome diverse populations. Student bodies are diversifying as a result of nationwide demographic trends. Accommodating multicultural lifestyles and providing easy access for students with disabilities presents an opportunity to build vibrant communities and broaden an institution’s appeal. Planning and the architectural language of facilities should communicate openness and welcome.
• Cultivate a sense of place. Cultivating a distinctive student life experience has become increasingly important to recruitment and retention with more and more academic experiences available online.

College attendance has continued to rise, dramatically at some institutions, to the point where it has changed or completely restructured the culture of the student life. Commuter schools are seeking to become resident-based and resident-based schools that previously did not require a comprehensive plan to secure and retain students, need to do so to keep up with their peer institutions. This complete re-work of their student life facilities plan focuses on the idea of community and how each student community caters to the age of the student, his or her needs, and the components required to successfully retain and educate that specific student.

5. As you sit down to plan student life facilities with institutional clients, what are their top-of-mind facilities goals? Have you seen a recent evolution in these goals?

ERIC MOSS, ASG.

• Student retention and education seems to be the number one focus.
• Community building, a close second.
• Flexibility is paramount, as well. Institutions that are competing for students understand that the facilities they provide are now going to be closely scrutinized and compared with the facilities provided by their peers. Historically, these buildings have been built as 50-year buildings. What is desired/required now may be different in 10 or 15 years. Thus, both campus and facility planning need to provide the ability to change to reflect changing needs.

Providing spaces to build community and facilitate collaborative learning, such as lounges, group study space, and meeting rooms, is often a key driver. The amount of space needed for these activities has been increasing, and many campuses have a shortage of space.

JULIE SKOLNICKI, EdR.

• High quality state-of-the-art facilities, representative of the university’s brand and values. High quality facilities have always been at the forefront of student life projects.  But the discussion has evolved away from a myopic discussion of structural system to discussions of technology, transparency and flexibility to evolve over time.
• Sustainability: This has evolved from checking boxes on a LEED chart in the early 2000’s to smart business decisions and operating strategies in today’s buildings. Green washing is out and smart technology and building systems are the norm. It is now common for our P3 projects to utilize geothermal systems and energy-efficient design.
• Balance of community development and student demand goals. In student housing, we continue to see student demand focused on suite-style units that offer smaller bed to bath ratios and single occupancy rooms, but each institution is different in the approach they take to student housing for freshmen, upperclassmen and graduate students. The evolution we have seen recently is the blurring of lines between the grade levels and a focus on community spaces that bring students together. There is a greater focus on how classrooms, community kitchens, spark spaces, various sizes of casual lounges and study spaces can encourage student interaction regardless of the room configuration.

6. What are the 1-2 key items in the planning process where you see institutions often fall short, if they are not thinking strategically and holistically about student life facilities?

ERIC MOSS, ASG.

• Failing to provide sufficient community spaces for both programmed and informal interactions.
• Responding too quickly to demand. Institutions that react to a dictate or perceived need and construct without proper planning can hamper future planning efforts. Too often a building is conceived and constructed on the site with the least burdens or to utilize available funds only to have it be in the way or too far out of the way to facilitate proper facility planning.
• Over-emphasizing student input. Institutions can miss opportunities when they adhere too strictly to the type of facilities students say they want without considering the mission and vision of the residence life program. Student input is critical, but especially for lower-division students, their ideal experience may not promote the best outcomes. Many freshmen want to live in an apartment, but studies show they make more friends in a more traditional hall.

JULIE SKOLNICKI, EdR.

• Decision making based on capital cost vs Net Operating Incomes (NOI) remains a hurdle at many institutions. For many universities, a project is outlined in the master plan or capital planning process based on a specific capital cost, and once that is established there is no movement. During the planning process we may find that the design of a building originally programmed as a 600 bed residence hall can easily accommodate 632 beds – at a modest increase in capital cost but with increased NOI. Or conversely, I have seen student housing projects cut beds as a part of a value engineering exercise. This ultimately impacts the financial feasibility of the project.
• Cross-subsiding new projects with revenue from old functionally obsolete projects. This is still the general practice at many universities. This remains a challenge for P3 projects, because each project needs to financially stand on its own. Navigating through these existing conditions requires buy-in from cross-departmental, institutional leadership.
• 24/7 shared facilities. Some institutions still struggle with overcoming the operational hurdles of truly shared facilities that must meet student needs 24/7.  For example, this may mean that a space is a classroom during the day and a student organization space in the evening. This is the way today’s students want to live, and it makes great business sense from a capital and operating cost standpoint, but it is a concept that requires careful scheduling and funding from multiple departments.