1. PUBLIC PRIVATE PARTNERSHIPS
January 23, 2014

2. AGENDA
Experience in the Room
P3 Defined
Case Study
Pros
Cons
University Objectives
Financing Models
Promising Practices & Advice
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3. ACUHO-I – 3

4. 20%
20%
20%
20%
20%
MY OPINION OF P3 UNIVERSITY HOUSING
IS:
1. Excellent
2. Good
3. Neutral
4. Poor
5. Bad
January 23, 2014
1
2
3
4
5

5. I HAVE WORKED WITH A HOUSING P3:
50%
50%
1. Yes
2. No
1
January 23, 2014
2

6. IF “YES” MY HOUSING OPERATION
REPORTS THROUGH:
33%
33%
33%
1. Business/Finance
2. Student Affairs
3. Other
1
January 23, 2014
2
3

7. 20%
20%
20%
20%
20%
MY EXPERIENCE WITH P3 UNIVERSITY
HOUSING HAS BEEN:
1. Excellent
2. Good
3. Neutral
4. Poor
5. Bad
January 23, 2014
1
2
3
4
5

8. MY PARTICIPATION/ROLE IN THE
PROJECT BEGAN:
1. Pre-selection
2. During RFP
process
3. After Selection
4. V- not sure how
to phrase…
January 23, 2014
25%
1
25%
2
25%
3
25%
4

9. MY PARTICIPATION/ROLE:
33%
33%
33%
1. Selection
2. ……………..
3. Make it work
1
January 23, 2014
2
3

10. ACUHO-I – 10

11. WHAT
A public private partnership
(PPP, P3) is a government
(public) service or private
business venture which is
funded and operated through a
partnership of government
(public) and one or more
private sector companies.
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12. CASE STUDY
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13. CASE STUDY
Key Facts:
• Presidential Initiative
• Debt capacity constrained
• Sophomore Residency Req
• Occupancy- 100% on, Off-not full
• Athletic Director- unsatisfied on/looking off
• Current housing stock
• RH 1900+
• Suite 200…10%
• Apt O
Why Privatize?
 Market Based approach/product type
 Renovate/Replace
 Expand Suites
 Offer new apartments
 Combination
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14. CASE STUDY
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15. DEFINED
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16. WHERE
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17. P3=LOSS OF PROJECT
CONTROL
50%
50%
1. True
2. False
1
January 23, 2014
2

18. INSIDER INFO
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19. WHEN THE CONTRACT IS SIGNED THE
STUDENT/DEVELOPER RELATIONSHIP IS
OVER- WHEN THE CONTRACT IS SIGNED
THE UNIVERSITY/STUDENT
RELATIONSHIP BEGINS.
50%
50%
1. True
2. False
1
January 23, 2014
2

20. INSIDER INFO
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21. P3=LOWER
CONSTRUCTION
QUALITY
50%
50%
1. True
2. False
1
January 23, 2014
2

22. INSIDER INFO
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23. PRODUCT EVOLUTION
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24. ACUHO-I – 24

25. PROCESS - PROCUREMENT
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26. PRE-PROCUREMENT
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27. MOTIVATION
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28. DIVERSE UNIVERSITY OBJECTIVES
Lack of $
Preservation of debt capacity
Lower development cost
Lack of expertise
Faster delivery
Operational savings/efficiency
Potential revenue
Reduced liability
Expand land holdings
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29. WHY
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30. ACUHO-I – 30

31. WHAT DEVELOPERS NEED FROM INSTITUTIONS
Strong institutional leadership
Information to effectively evaluate options
Institutional strategic plan
Campus master plan
Capital improvement plan
Strategic housing plan
Housing facilities analysis
Res Life outcomes/assessment methods
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32. ACUHO-I – 32

33. FINANCIAL GOALS
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34. HOW TO DECIDE
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35. UNIVERSITY OBJECTIVES
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36. PROJECT FEASIBILITY
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37. TRANSACTION STRUCTURE & FINANCING ALTERNATIVES
General Obligation Bonds
• University ownership & risk
• Lowest cost of capital
• Direct debt of University
• Developer is service
provider
Taxable Project-Based Debt
• Developer takes construction
risk
• University and developer
share cash flow
• Long-term management
agreement
Tax-Exempt, Project-Based Bonds
• Use of a 501(c)3 foundation
• Cash flow to University
• Debt/credit impacts
Developer Equity
• Developer ownership & risk
• Ground rent to
University/Foundation
• Property tax implications
• Ownership/control vs. risk
assumption
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38. CHO ROLE
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39. Finance
Officers
•Key decision makers
Auxiliary
Services
•Access /Filter
•Informational resource
Student
Affairs
•Decision Maker
•Informational resource
• Access
Housing
Officer
•Client Relations
•Industry Credibility
Facilities
•Filter/Info/Evaluate
•Relationships/Credibility
Planning
Officers
•Info/Initial Docs
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40. ACUHO-I – 40

41. BONUS ADVICE
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42. 1 CAMPUS --- 1 DEVELOPER PERSPECTIVE
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43. CAMPUS/DEVELOPER PERSPECTIVE
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44. INITIAL OUTLINE- SEE NOTES- INFO ONLY-NOT FOR PRESENTATION
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