From Enclave to Urban Institution: The University, the City and Land

1. From Enclave to Urban Institution: The University, the City and Land David C. Perry University of Illinois at Chicago and Wim Wiewel University of Baltimore Universities as Urban Developers Washington Consortium of Universities May 24, 2006

2. Rethinking the University and the City FROM “ENCLAVE” - removed from the “turmoil” of the city. A campus for the “academic community” TO “URBAN INSTITUTION” - not simply “in the city, but of the city” - an “engine” or “driver” of contemporary urban development

3. University as Urban Developer • The “campus” isn’t the campus any more…it’s much more • University development is increasingly “mixed use” development - blurring academic and commercial uses, the edge of the old campus, even the meaning of “university building” • Campus master plan as city plan/city plan as master plan • Dramatic shifts in the institutional practices of universities in cities: partners in economic development sites, multi-university real estate projects and programs

4. The University as Urban Developer: Three Topics and Some Conclusions • The “Campus” and the “City”- university-community development practices at the level of: • Neighborhood • Central City • Region • The “Deal” Acquisition, Finance and Development Strategies • The Ethics of the Institution: The Societal Role of the University and Real Estate Practice • Summary Statements: to introduce our key findings

5. The Campus and the City University-Community Development Practices, from Neighborhood, to Central City to Region • Neighborhoods and Universities • Town-Gown conflict - Columbia, Northeastern • Urban renewal and public land clearance - U of C • Community development principles - new practice in universities • Central City Core and Universities • Re-urbanization anchor - U. Wash Tacoma • Cluster development - Auraria Campus, Denver, Georgia Tech • Urban politics as university practice - Pitt • City, Region and University • Leadership – Georgia State • Negotiation - Victoria (U of Toronto)/McKinsey • Political and financial management of risk - IUPUI

6. The “Deal” Acquisition, Finance and Development Practices • Fiscal practices of acquisition and development • Debt • Revenue • “Endowment” • The partners in the “deal:” university, city and private sector • The deal and the dealmakers • Politics - Temple vs. Penn • Partnerships - DePaul University • Intermediaries - Ohio State/Campus Partners

7. The Ethics of the Institution The Ethics of University Real Estate Development • How closely should the “business” of university real estate practice adhere to the mission of the academy? The farther away from the academic mission, the less successful the deal. • Does the university take on a different obligation as “developer?” A real conflict between market success and public good. • What key lessons do we learn from the expanding role of university as developer? Does this mean the university has become the “engine” of urban growth?

8. …a few summary statements to introduce our key findings • If not “engines” of urban development, universities, at the very least, are sources of increasingly “mixed” use development - blurring the edge, the structure and in some cases the very meaning of “campus.” • It is also clear, that real estate practices are key to the fiscal and programmatic future of higher education - program, endowment and urban context • As such, as universities embed themselves ever more fully in the land economy of the city, they become more visibly important, perhaps even foundational, urban institutions.

9. Questions • How do universities conduct real estate development projects outside traditional campus boundaries? • Motivation • Type of projects • Impact • The process: • Leadership • Internal structure • Partners • Relations with community • Relations with city government • Time lines and obstacles • Financing

10. Motivations, Projects, Impact • Need for space • Academic (research) • Dorms • Entertainment • Improve the neighborhood • Income

11. University of Washington, Tacoma

12. Auraria University Campus

13. University of Illinois, ChicagoSouth Campus

14. University of Illinois, ChicagoSouth Campus

15. University of Illinois, ChicagoSouth Campus

16. Process: • Leadership • Personal commitment from the top • OSU, Penn, Marquette, Georgia State, Pitt vs. Ryerson, Temple, Louisville or • Institutionalize commitment • Victoria, U of C, Denver

17. Process: 2. Internal structure • Small team for partnerships • Strong internal capabilities • Expertise and decision-making ability

18. Process: 3. Partners • Half acted alone • Fully authorized intermediaries Community intermediary will not deflect heat.

19. Process: 3. Partners – Private developers • Ground lease, developer at risk • Joint venture • For-fee Vary along risk-reward continuum

20. Process: 4. Community relations • History of urban renewal • Progress on ethics; cycles of learning • Role of intermediaries: worth it? • “There is no such thing as vacant land” • History, image, politics matter more than land

21. Ohio State University

22. Northeastern University Davenport Commons

23. Northeastern University Davenport Commons

24. University of Pittsburgh

25. Process: 5. Relations with city government • PILOT • Regulations • Comprehensive and Master Plans • Mixed conflict & cooperation • Relationships matter • Need for more consistent joint planning

26. Process: 6. The long and winding road • Longer than usual because of: • Unclear conceptualization • Unclear development entity • Multiple constituencies • Exit not an option

27. Process: 7. Financing • Methods • Bonds • Certificates of Participation • Capital grants • Private capital and leasing • Debt finance through intermediary • TIF • Loans • Gifts • Operating funds • DePaul case

28. DePaul University Loop Campus

29. Multi-University Real-Estate Projects

30. Institution Names: Berklee College of Music, the Boston Conservatory, Emerson College, Massachusetts College of Art, and the School of the Museum of Fine Arts Synopsis: A consortium of universities developed the first and only arts high school in downtown Boston. History: ProArts is an association of six neighboring Boston art universities that formed a 501.c3. Through this 501.c3, a charter school was conceived, developed, & graduated its first students in 2001 Structure: Renovated vacant building (226,000 sf.) Shared space with another high school Financing: Universities pledged in kind resources Cons: Finding suitable space Initial budget constraints Duel-enrollment programs: feeder school Pros: Community and city buy-in: The BAA only accepts applications from students who live in Boston. BAA is now almost completely self-sufficient thorough donor dollars Key to success: Ability to accept unexpected results. Boston Arts Academy High School

31. Structure: New 130,000 square foot facility Located on Canal Street in downtown New Orleans. Scheduled to open Fall 2007 Financing: $30 million Pros: Supports the commercialization of research developed at the LSU and Tulane health sciences centers. Attracts out-of-state bioscience firms to Louisiana. Cons: Delays in completion Key to success: Continued commitment from the State Institution Names: Louisiana State University & Tulane University Synopsis: The New Orleans Bio-Innovation Center is a technology business incubator created to foster entrepreneurship within the New Orleans bioscience community. To assist companies commercializing biotechnologies from New Orleans-based universities. History: A 501.c3 formed through funding from the LA Department of Economic Development. Bio-Innovation Center

32. Institution Names: DePaul University, Roosevelt University, and Columbia College Synopsis: University Center of Chicago is the largest joint student residence hall in the United States. History: In the late 1990s, DePaul tried to persuade the city of Chicago to let it build a dormitory, but the city, eager to see a grandiose project there that could help revitalize that end of the South Loop, turned down DePaul's request. DePaul approached its neighbors and collectively formed a 501.c3 The city government donated the building's site to the Educational Advancement Fund which is developing the project. University Center was about six years in the making. Structure: 35,000 square feet of retail Dormitory houses 1,700 students. Construction began on June 1, 2001 and officially opened August 16th 2003. Financing: $151 Million through tax exempt bonds All three agreed to cover the rent for their beds upfront for the first year if the property wasn't fully leased. U.S. Equities Student Housing, can offer the apartments and suites to students if not fully leased. Pros: Provides multiple avenues of revenue (conferences, retail, community & student housing) Cons: Risk of diluting Universities’ culture Increases in cost of operation Key to success: Developing a single vision University Center

33. Conclusions • Major projects require strong leadership • Neighborhood improvements successful, but take long time • Most universities “go it alone” • Private developers’ and formal intermediaries’ role needs specification • Community relations amenable to improvement & learning • Relations with government too episodic • Little difference between public & private universities

34. Background • Great Cities Institute. University of Illinois at Chicago and the Great Cities Commitment http://www.uic.edu/cuppa/gci/ • Lincoln Institute of Land Policy and the Great Cities Institute: City, Land and University Project http://www.lincolninst.edu/subcenters/clu/http://www.uic.edu/cuppa/gci/ • Annual workshops: Boston, Toronto, Atlanta, Portland and Chicago • David C. Perry and Wim Wiewel (eds.) The University as Urban Developer: Case Studies and Analysis (M.E. Sharpe, May 2005) dperry@uic.edu and wwiewel@ubalt.edu