Anchor Institutions Conference 10/9/07: Putting the Deal Together
Putting the Deal Together for Anchor Institutions Understanding their Roles and Constraints Presented by Joan J. Millane, Principal Millane Partners, L.L.C. 19 West Barre Street, Suite 400, Baltimore, Maryland 21201-2465 Direct: (410) 294-7037 Office: (410) 727-2866 Fax: (410) 727-1664 firstname.lastname@example.org www.millanepartners.com Anchor Institutions Conference Breakout 2a October 9, 2007 ● Penn Institute for Urban Research Millane Partners Real Estate Results
Institutions Partnering with Private Sector (PPP)
Institution thinks there is a need and believes the market place can meet the need
Market study- Determine Market Demand and Rents
Site is determined, hopefully via Institution’s master plan
Generally on land contiguous to the Institution
Institution engages and oversees Developer
Developer engages and oversees GC, Architect, Engineers
Developer programs, budgets, designs, constructs
Institution must oversee developer, manage contract, interface with Institution’s constituents to protect integrity of master plan, compatibility with nearby architecture, utilities, security, roads, parking
Limited State Resources- Institutions seeking -new revenue streams (from underutilized land), -lower costs (not built to 100 year standards), - shorter time frames (Institution engages developer who in turn engages GC, Architect, Engineer).
Consulting Services- Institution’s employees are fully engaged; third parties can develop the project and not have to be employed long term.
Economic Development- To reinvigorate nearby deteriorating and unsafe neighborhoods so as to not detract from Institution’s reputation or to make surrounding areas safer, more pedestrian- friendly.
These are complex, and time consuming, especially when you and your staff are already working a full time job.
You must have a Senior Manager who has the political will and credibility to champion the transaction.
You need one responsible point person, reporting to the Senior Manager, who must include all stakeholders in the planning very early in the process.
The transaction should be program-driven, supporting the Institution’s mission and in line with the Master Plan.
Select a Developer that has experience working with other similar-type institutions.
Developers can get control of land on behalf of the Institution which can be purchased as part of development budget, The Institution then takes title simultaneously with financing and ground leases it to the Developer.
It is a much more complex negotiation when developer has his own money in the deal, unlike student housing which is 100% tax exempt bond funded.
No need to recreate the wheel. Many of your Colleagues have done these and can and will give you their RFP’s, Ground Leases, Development Agreements and Tenant Leases to use as models and can recommend legal and financial advisors.
Joan J. Millane, Principal, Millane Partners, LLC has a broad range of experience in the field educational, research and governmental project delivery. She was formerly responsible for the asset management divisions for both the Resolution Trust Corporation and the Carlyle Group in Washington, DC, and more recently Executive Director of Johns Hopkins Real Estate and Assistant Vice President for Asset Management at the University of Maryland.
Currently, Ms. Millane owns a consulting firm which assists private sector, government and higher education entities to implement their real estate and financing transactions, particularly for public private partnering, purchases, sales, and leasing of housing, research parks and mixed use projects, negotiating the real estate and financing documents to win win conclusions while protecting the interests of the institution for today and for future administrations.
On behalf of the Johns Hopkins University, Joanie structured a public-private development for potentially 750,000 square feet of laboratory, classroom, office and conference space at the 35-acre Johns Hopkins Montgomery County Campus. The transaction’s first 115,000 square foot office, classroom, research building opened August 2004 at no cost to the University. Representing the university’s interests, Ms. Millane was also responsible for structuring the first two University of Maryland public-private student housing transactions for over 1,800 beds, negotiating the ground leases and the financing documents with private sector developers and is currently working with the University to develop more.
Joanie has served as faculty, teaching public private real estate and financing concepts for various national organizations such as the Association of University Research Parks (AURP), the Urban Land Institute (ULI), the Lincoln Institute for Land Policy, the National Association of College and University Business Officers (NACUBO), and the Society for College and University Planning (SCUP) and is an elected member of Lambda Alpha, a national land use and preservation honor society. Ms. Millane received her undergraduate degree from Cornell University and an MBA from the Wharton School at the University of Pennsylvania. Please learn more at www.millanepartners.com.
Joan J. Millane, Principal Millane Partners, L.L.C. 19 West Barre Street, Suite 400, Baltimore, Maryland 21201-2465 Direct: (410) 294-7037 Office: (410) 727-2866 Fax: (410) 727-1664 [email_address] www.millanepartners.com