New Wayne State student housing to drive local Detroit business
Providing adequate and high-quality student housing is an important remit of universities in the competition for students, but one that can come at a pretty high cost.
Already contending with other pressures that also weigh heavy on university budgets, institutions won’t always have the financial firepower to invest in brand new student digs or other infrastructure upgrades and maintenance spend.
This is a US$780 billion problem in the US alone, where at least 60 percent of school facility infrastructure in the country is more than 25 years old.
But a unique financing arrangement is helping Detroit’s premier research institution Wayne State University meet its student housing needs, without adding debt to its balance sheets.
The institution has struck a US$307.5 million partnership deal with property managers Corvias, through which it is not only adding 841 new student beds to its existing portfolio but also generating economic opportunities to drive small business activity in Detroit.
The products of this innovative arrangement include the new Anthony Wayne Drive Apartments launched this week; the demolition of the Helen L. DeRoy Apartments to make way for a green space; and 370 renovated beds to be added to the Chatsworth Residence Hall.
The Anthony Wayne Drive Apartments also features more than 17,000 square feet of new retail space, and the recently opened 9,000-square-foot Campus Health Center.
Corvias’ partnership structure with Wayne State provides a financing solution totaling more than US$907 million in total compensation over the partnership term, including the defeasance of US$102 million in existing debt; US$151 million in initial development and renovation scope with the establishment of long-term reserve accounts in the first 10 years; and US$38.8 million in capital repair and replacement over 40 years to ensure facilities are returned in like-new condition at the end of the programme term.
“We are beyond thrilled that our partnership with Corvias has enabled us to provide quality facilities and resources for our students, while also allowing us to advance financially,” Wayne State University President M. Roy Wilson said at the opening of Anthony Wayne Drive.
That’s a wrap! Today, we cut the ribbon on a new residence hall at @WSU, celebrating a new home for more than 800 future students. #StudentHousing #HigherEd https://t.co/q9pfM2kat7 pic.twitter.com/u3IRh0FHrF
— Corvias (@Corvias) October 9, 2019
Also as part of the deal, Corvias will manage all 2,654 beds on campus. The firm will continue to engage with local and small businesses, with the aim of creating valuable economic opportunities.
These local businesses will develop and fill the retail units within the residential spaces of the student housing facility, providing the university with a revenue stream and at the same time, meeting the needs of student residents.
Such an arrangement isn’t uncommon in student housing projects and is attractive for the benefits it brings to all stakeholders: the students, the college or university, and the community at large.
Corvias expects that 90 percent of retail partners will be local and small businesses during the course of the partnership, with their activities creating job growth and contributing to the region’s economic development.
“Wayne State has always aimed to create a positive economic impact on the greater Detroit community. With Corvias’ investment, we continue to increase job growth and support local and small businesses,” Wilson said.
Already, several retail tenants have set up shop at Anthony Wayne Drive Apartments. These include 1000 Degrees Pizza, Uncle Joe’s Chicken Fingers, Beyond Juice, Tubby’s Sub Shop, Just Baked Cupcakes, Leo’s Coney Island, Warriors Pharmacy, and convenience store 7-Eleven, with a new concept that doesn’t sell alcohol or tobacco.
“Our partnership structure provides Wayne State University with an innovative financing solution that meets student housing and related infrastructure needs in the short-term, while simultaneously improving Wayne State’s financial strength and the sustainability of the program over the long-term,” said Michael De La Rosa, principal at Corvias.