Public-Private Partnerships for Colleges and Universities

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VASCUPP

2013 Convention

Virginia Beach, Virginia

Houston, TX

Hancock Geriatric Treatment Center at Loudoun County Government Center

Eastern State Hospital, Williamsburg, VA

Leesburg, VA

John D. Keegan, P.E.

– Vice President

Gilbane Development Company

September 25, 2013

Rhode Island School of Design

Providence, RI

Centenary College, Founders Hall

Hackettstown, NJ

Adult Mental Health Treatment Center at

Eastern State Hospital, Williamsburg, VA

Something to keep in mind about PPPs…

A “vision” – the seed of any PPP – is nothing unless it’s…

Supported

– There needs to be a “champion” behind the PPP!

Articulated

– Precisely what is that you want/need to achieve and why?

Shared

– Equally understood and embraced by both/all partners.

Sustained

– “Durable” enough to survive, even if/as stakeholders change.

What are some common misconceptions about PPPs?

Not a replacement for traditional procurement methods.

Simply

“another tool in the tool box”

that encourages creativity, helping define problem statements and craft corresponding business solutions (beyond just “bricks and mortar”).

Need not exist only when private-sector financing is involved.

Consider as means of overcoming common project constraints:

Time

– Achieve faster delivery (can be 25% to 50% sooner), critical for meeting internally or externally-driven deadlines.

Dollars

– Reduce cost through efficiencies gained by turnkey/streamlined delivery.

Staff

– Overcome human resource constraints (privatizing “noncore” operations, if need be).

Risk

– Outsource to achieve appropriate allocation/balance of risk among project partners.

What if private-sector financing is involved?

 If private-sector financing

is

involved, candidate project must:

Have

dedicated revenue stream

associated with it;

Involve some sort of

in-kind exchange

, such as surplus land for private development;

Provide opportunity for

tax-increment financing

(or similar); and/or,

Provide opportunity to

“monetize” existing assets

(for example, sale-leaseback transactions).

of public sector partner

How can you benefit from PPPs?

Balance program objectives with resource realities, promoting

creative solutions through bundled delivery

.

 Increase

flexibility and speed of delivery

, overcoming constraints borne of traditional procurement process.

 Take more strategic approach toward debt management and planning of capital projects, mitigating construction/operating cost escalation and

preserving borrowing capacity for core facilities

.

CASE STUDY

PPEA

George Mason University

– Manassas, Virginia

Upper Level Student Housing

Scope = Design / Build / Furnish / Finance:

 152-bed, 105,000 SF on-campus apartment-style housing and retail.

Ground lease from University to 501(c)(3)

Foundation and building lease vice-versa.

 Tax-exempt and taxable debt issued through Prince William County Industrial

Development Authority.

 Retail leasing, financing, fit-out, and management by Gilbane Development Co.

CASE STUDY

PPEA

George Mason University

– Manassas, Virginia

Life Sciences Lab Building

Scope = Design / Build / Furnish / Finance:

75,000 SF on-campus life sciences lab building.

Ground lease from University to 501(c)(3)

Foundation and building lease vice-versa.

Tax-exempt and taxable debt issued through

Prince William County Industrial Development

Authority.

“Incubator Space” on 3 rd

Floor.

CASE STUDY

PPEA

Hancock Geriatric Treatment Center

– Williamsburg, Virginia

Scope = Design / Build / Furnish / Interim Finance:

Driver: Reduce delivery timeline from ~8 to ~2 years to meet CMMS requirements.

150-bed, 115,000 SF psychiatric intermediate care facility specializing in geriatric patients.

Replaces five buildings with one.

Incorporates latest advances in evidence-based design for psychiatric facilities.

 Winner of NCPPP’s Innovation Award.

Featured in

Behavioral Healthcare

magazine.

CASE STUDY

PPEA

Adult Mental Health Treatment Center

– Williamsburg, Virginia

Scope = Design / Build / Furnish / Interim Finance:

Driver: Consolidate campus from ~400 to ~80 acres to create surplus acreage ($) to benefit patient initiatives.

150-bed, 188,000 SF psychiatric intermediate care facility specializing in adult patients.

Replaces nine buildings with one.

 Embraces “House, Neighborhood, Downtown” patient treatment model.

Featured in

Behavioral Healthcare

magazine.

CASE STUDY

PPEA

Virginia Center for Behavioral Rehabilitation

– Burkeville, Virginia

Scope = Design / Build / Furnish / Interim Finance:

Driver: Satisfy requirements of civil commitment legislation.

Phase 1 = 100 beds, 100,000 SF.

Phase 2 = 200 beds, 80,000 SF.

30-month turnkey delivery of both phases (8 months early).

Few facilities of this type exist, even at national level.

Started with development feasibility study.

CASE STUDY

8½ Canal – Richmond, Virginia

Scope = Design / Build / Furnish /

Finance / Own / Operate:

 540-bed, 160-unit, 285,000 SF apartment-style student housing.

Referral agreement from VCU.

Fully-furnished apartments

(including flat screen TVs) plus lounges, fitness center, courtyards,

200-car garage, etc.

 Every bedroom has private bathroom.

 15-month delivery from land closing to student occupancy.

VCU’s needs met without committing its own capital.

www.8onehalfcanal.com

CASE STUDY

1200 West Marshall

– Richmond, Virginia

Scope = Design / Build / Furnish /

Finance / Own / Operate:

 406-bed, 136-unit, 260,000 SF apartment-style student housing.

Referral agreement from VCU.

Fully-furnished apartments

(including flat screen TVs) plus lounges, fitness center, courtyards,

200-car garage, etc.

 Every bedroom has private bathroom.

 Includes adaptive reuse of historic building and partial tax abatement.

VCU’s needs met without committing its own capital.

www.1200westmarshall.com

CASE STUDY

College Town

– University of Rochester

Scope = Design / Build / Finance /

Own / Operate:

 Mixeduse development at “front door” to University of Rochester.

110,000 SF of street-level retail and restaurants (including Barnes &

Noble and Constantino's Market),

50,000 SF of Class A office space,

155,000 SF of residential space,

136-room Hilton Garden Inn, and

1,600-space parking garage.

Support university’s mission, strengthen surrounding neighborhoods, increase tax revenue, and create jobs.

U of R’s needs met without committing its own capital.

www.collegetownrochester.com

CASE STUDY

Garrett College

– McHenry, Maryland

Scope = Design / Build / Furnish / Finance:

Development feasibility study (dovetailed with findings of independent market study).

126-bed apartment-style residence hall (delivered 11 months from agreement to occupancy).

100 on-campus parking spaces.

Co-developer agreements regarding off-campus sewer and water extensions to site.

Ground lease from College to 501(c)(3) Foundation and building lease vice-versa.

Tax-exempt debt issued through Maryland Economic Development Corporation (MEDCO).

CASE STUDY

Garrett College

– McHenry, Maryland

CASE STUDY

Centenary College

– Hackettstown, New Jersey

Scope = Design / Build / Furnish / Interim Finance:

Two 126-bed apartment-style residence halls.

44,000 SF renovated/expanded recreation center.

Significant off-campus road/park infrastructure (development proffers).

439 parking spaces (4,000 LF of 4’ diameter underground storm water detention).

 Real estate consulting services in negotiating conditional permitted use ordinance.

Predevelopment services for 70,000 SF student center and 26,000 SF “virtual lab.”

Bennett-Smith Hall

Lackland Center

Reeves Center

Founders Hall

CASE STUDY

Centenary College

– Hackettstown, New Jersey

Original

New / Proposed

CASE STUDY

Rhode Island School of Design

– Providence, Rhode Island

Scope = Operating (Master) Lease with Purchase Option:

1031 exchange of Fairfax, Virginia asset

Acquisition of B of A (formerly Fleet Bank) assets:

1912

– 12 stories, 350,000 SF (historic)

1973

– 28 stories, 370,000 SF

Common lobby and HVAC/sprinkler systems

Adaptive reuse of 1912 building for RISD:

Retire 100-year ground lease

Integrate shared access and utility easements

Consolidate office uses into 1973 building

Create living-learning center:

Library and museum: Floors 1 & 2

Student housing: Floors 3 - 11

Student union (food service): Floor 12

20-year operating lease (options to 50 years)

Distinct windows for purchase options:

Converted taxable to tax-exempt debt

CASE STUDY

Loudoun County Government Center

– Leesburg, Virginia

Scope = Design / Build / Furnish / Finance:

158,000 SF, five-story government center including administrative headquarters and

418-car garage.

Scattered operations consolidated in two locations and capitalized using tax-exempt bonds, creating ~$1 million in annual savings (~$22 million over lease term).

County outsourced financing, design, development and construction risk, realizing significant savings.

Project-specific 501(c)(3) ownership entity established by Gilbane.

Site master planned to accommodate future expansion.

VASCUPP

2013 Convention

Virginia Beach, Virginia

Houston, TX

Hancock Geriatric Treatment Center at Loudoun County Government Center

Eastern State Hospital, Williamsburg, VA

Leesburg, VA

John D. Keegan, P.E.

– Vice President

Gilbane Development Company [email protected]

www.gilbaneco.com/development (703) 752-8588

Rhode Island School of Design

Providence, RI

Centenary College, Founders Hall

Hackettstown, NJ

Adult Mental Health Treatment Center at

Eastern State Hospital, Williamsburg, VA

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