Authored by: Lizetta Fennessy
“In late October, I attended the P3 Higher Education Summit for the third year in a row. I continue to be impressed with the quality of the information and the great people focused on helping colleges and universities find new and creative ways to build facilities designed to meet student needs. Haley & Aldrich is working on P3 projects on both coasts and is focused on helping both the developer and the campus find the most effective solutions to geotechnical and environmental issues impacting development. I learned a lot of P3 basics when I first attended in 2017, and in 2018, I saw the momentum continuing to build. This October I noticed both developers and campuses being more transparent about their goals and objectives. Here’s what I learned this year:
Fundamental P3 drivers continue
The more things change, the more they stay the same. The reduced availability of capital, both at public and private institutions, drives the need to find alternative methods to achieve facilities goals. Those goals may be about catching up on deferred maintenance or keeping up in the facilities arms race. Demographic trends point to a smaller student body in the future, which foster worries of a “flight to quality” and pressure to compete for students. “All of the typical drivers for P3s still make it an attractive option for many colleges and universities,” said Jay Pearlman, Senior Vice President for Advisory Services at The Scion Group. “Speed to market and reduced impact on debt capacity are still important considerations. But today, as more and more institutions contemplate their first ever student housing, we see schools electing to go P3 to fill an expertise gap. It may be that they lack a significant program management team or they need help building a residential life program. Working with a development partner provides away to access these specialties in order to increase the success of a program.”
P3 developments support student access and engagement
Often, P3 developments are considered a means to a financial end. But they can be much more than that. If you follow trends in higher education, you’ll frequently hear about the student debt crisis, college readiness, and the plight of many first-generation students. In addition, students and faculty face affordable housing challenges in many locations, particularly in areas like the Bay Area or Boston where housing prices are skyrocketing. It’s a perfect storm where more students are taking on debt to attend college, more likely to commute to reduce their cost, and realizing they’re not fully ready or engaged. If that student doesn’t graduate, they’re at risk of missing out on key educational opportunities while also facing loans that will be very difficult to repay. And yet, as Maria Anguiano, Senior Vice President of Strategy at Arizona State University, said at the conference, “The knowledge economy requires knowledgeable workers.”
Colleges and universities recognize that they need to allocate additional resources to ensure student success, which means even fewer resources for the facilities that support student success. P3 developments can be an alternate method to provide facilities such as student centers, dining halls, and athletic facilities that support student engagement and help students succeed while on campus.”
Read the full article on Blog.HaleyAldrich.com.