OFFICE OF THE PRESIDENT
Photo of UK students walking

Housing Development Plan

News Release


Frequently Asked Questions About the
Housing Development Plan

 

1) What is the current condition of housing on UK’s campus?

UK has 22 undergraduate residence halls that house 5,145 students and 861 apartments housing graduate students and families. The average age of the residence halls is 44 years and the average age of the apartments is 48 years. The deferred maintenance on our facilities exceeds $205 million. The current housing facilities have a Facilities Condition Index of over 85percent (ratio of maintenance vs. replacement value).

In addition, the current room configuration is obsolete and does not meet the programming requirements for today’s administrators and students. Over 80 percent of the rooms are "traditional" configuration, which is a small double occupied room on each side of the hallway with common bath/showers down the hall.

 

2) What has prompted UK to consider privately financed development?

It is prudent to review every option with the goal of serving the best interest of the students and acting in a way that is financially prudent. To that end, it is prudent to look at all our positions for financing the construction of new residence halls.

The University’s objective is to improve the student’s residential experience at the lowest cost to the student in the shortest turn-around time.

Another reason to examine the prudence of privately financed development is, generally, private developers can deliver an asset to the University on a much shorter timeline. Our objective is to deliver better housing to students as soon as possible. Also, the developer’s debt would potentially appear on their balance sheets, thereby, freeing up debt capacity for academic buildings.

 

3) Has this been done elsewhere?

Public/Private partnerships have been around for a number of years and have been used by various universities to construct housing, dining, some academic spaces, and other types of spaces.

 

4) How long will the process take to replace housing? When will the first building be constructed?

The process will begin in October 2011, by the University issuing a Request for Proposal (RFP) document to potential developers. The project specifications will be included in the RFP and developers will submit proposals for the first project in November. Our timeline for opening the first development is August 2013. The expected timeline for the entire project is projected to be between five and seven years.

 

5) What process does the University have to follow to pursue a private strategy?

The University currently has $52 million in lease authority. This amount will provide a phase 1 launch of the concept. The University will have to obtain additional project authority from the state for all future phases of the proposal. After the selection of the developer, a timeline for future development will need to be established and the developer will need to secure and provide the financing. A key component is to select a developer that brings significant levels of private equity financing to the plans.

 

6) What is meant by a ground lease? Why is the proposed ground lease so long?

A ground lease is a common method of conveyance of land to a third party (in this case a developer) for their use. Generally, there is a very detailed agreement between the University and the developer on the use of the land, what type of building they can construct, the number of beds and common/academic space. Due to the large investment of capital, the type of asset and the method of financing, it will take many years for the developer to amortize their investment. We are expecting a ground lease of 50 to 70 years. At the end of the ground lease, the assets may be purchased by the University, the ground lease may be extended, or a new developer may be selected.

 

7) What criteria will be used in selecting a developer?

A developer will be selected on their ability to finance a project of this magnitude; previous history of development of large-scale projects; history of development and history in managing student housing.

 

8) Who is on the selection committee?

Kumble Subbaswamy, Provost
Angie Martin, Vice President for Budget and Treasurer
Sergio Melgar, Vice President Health Affairs/CFO UK Health Care
Robert Mock, Vice President for Student Affairs

Other members to be named:

  • A Dean
  • Student
  • Staff

 

9) What impact will this have on student housing cost going forward?

Obviously, the award and ground lease will dictate cost. The University will set housing rates according the local student housing market.

 

10) UK is also proposing leasing existing buildings to the developer. Why?

The University has a large deferred maintenance on existing buildings and we would be asking the developer to infuse sufficient capital in these buildings to properly maintain them until they can be replaced.

 

11) What is the likely building replacement schedule?

The first project will be to build approximately 600 beds for an Honors residence hall on the Haggin field located along University Drive. Future building sites are projected to include projects on North Campus to replace Blazer, Boyd, Jewell and Holmes Hall. Projects on Central Campus would include replacement of the Kirwan/Blanding complex. In the next phase, Graduate and Family housing would be consolidated on south campus near Commonwealth Stadium and the Arboretum.

Each of these projects also would include additional beds for expansion of the number of beds to between 7,500 and 9,000 total beds.

 

12) Under the privatized approach, are current employees impacted?

No. Our goal is not to negatively impact current employees. Current employees under the privatized approach, if we go that route, would remain in their current positions and may over future years have an option to transfer to other comparable University positions within Facilities as Phase II goes forward.

 

13) What types of amenities are planned for the buildings?

The developer that is selected would meet with University officials as needed to meet specific needs for each building constructed. They will also meet with student groups as needed to determine the benefits of specific amenities. Common amenities will include lobbies, kitchens, laundry facilities, and possibly high-tech classrooms. Each facility may serve unique needs and amenities may be customized as facilities are designed.

 

14) How involved will the Board of Trustees be in the process?

If this route of financing is recommended, the Board of Trustees will be informed in October as to the progress and would be asked approve the overall plan and selection of the developer at the December 2011 meeting. As the projects develops, regular briefings to the Board by the President will occur.

 

15) Will students and faculty be involved in the planning process for the new buildings?

Yes. The University and developer will include the University community in the design of each building. Open forums will be scheduled throughout the design process to inform the community and to receive input.

 

16) Will UK need specific project authorization from state officials?

UK has specific authority for up to $52 million for Phase 1. UK will seek the additional authority for all the remaining phases from the legislature during the 2012 regular session. Such authority is usually a line item contained in the overall state budget.

 

17) Will adjacent neighborhoods have opportunities for review and comment on the proposals for redevelopment adjacent to their homes?

The University and the developer will host open forums -- as part of an ongoing dialogue -- with the public and neighborhood associations as each building is in design for information exchange and ideas.

 

18) Will the University look at mandating a live-on requirement for all freshmen and sophomores?

The Developer’s objective to fill the approximate 9,000 beds will require the University to strongly consider required on-campus housing for freshmen. We currently have many sophomores as well that want to live on campus, but we simply don’t have the capacity to house them. Research strongly indicates that students who live on campus tend to do better academically and graduate sooner. Many Kentucky institutions already have similar requirements. UK currently houses about 88% of all freshmen along with some returning students.

 

19) Will this project include Greek Housing?

Yes, specific projects could be authorized according to the demand from various Greek organizations.

 

Updated April 3, 2013 by Chuck Ham