From Enclave to Urban Institution:

The University, the City and Land

David C. PerryUniversity of Illinois at Chicago

and

Wim WiewelUniversity of Baltimore

Universities as Urban DevelopersWashington Consortium of Universities

May 24, 2006

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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

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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

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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

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The Campus and the City

• 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

University-Community Development Practices, from Neighborhood, to Central City to Region

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The “Deal”

• 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

Acquisition, Finance and Development Practices

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The Ethics of the Institution

• 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?

The Ethics of University Real Estate Development

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…a few summary statements to introduce our key findings

1. 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.”

2. It is also clear, that real estate practices are key to the fiscal and programmatic future of higher education - program, endowment and urban context

3. 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.

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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

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Motivations, Projects, Impact

1. Need for space• Academic (research)

• Dorms

• Entertainment

2. Improve the neighborhood

3. Income

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University of Washington, Tacoma

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Auraria University Campus

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University of Illinois, ChicagoSouth Campus

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University of Illinois, ChicagoSouth Campus

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University of Illinois, ChicagoSouth Campus

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Process:

1. Leadership• Personal commitment from the top

- OSU, Penn, Marquette, Georgia State, Pitt vs. Ryerson, Temple, Louisville

or

• Institutionalize commitment- Victoria, U of C, Denver

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Process:

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

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Process:

3. Partners• Half acted alone• Fully authorized intermediaries

Community intermediary will not deflect heat.

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Process:

3. Partners – Private developers• Ground lease, developer at risk• Joint venture• For-fee

Vary along risk-reward continuum

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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

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Ohio State University

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Northeastern University Davenport Commons

  

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Northeastern University Davenport Commons

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University of Pittsburgh

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Process:

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

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Process:

6. The long and winding road• Longer than usual because of:

• Unclear conceptualization• Unclear development entity• Multiple constituencies• Exit not an option

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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

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DePaul UniversityLoop Campus

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Multi-University Real-Estate Projects

Institution name Project nameReason for development

University of Arizona, Phoenix & Arizona State University, West

ASU Satellite Campus Need for space

South West Texan University Temple College at Taylor, & Austin Community College

Round Rock Higher Education Center

Community Development

Berklee College of Music, New England Conservatory, and Boston Conservatory

Hynes Convention Center

Need for Space

Berklee College of Music, the Boston Conservatory, Emerson College, Massachusetts College of Art, and the School of the Museum of Fine Arts

Boston Arts Academy Charter High School

Community Development

Boston Hebrew and Andover/ Newton Theological School

Newton Campus Need for Space

Drexel University & University of Pennsylvania Biotech Park Need for Space

Emmanuel College & Harvard University Merck Research Building

Need for Space

Louisiana State University & Tulane University Bio-Innovation Center Need for Space

DePaul University, Roosevelt University, and Columbia College.

University Center Need for Space

University of Arizona (Phoenix) & University of Minnesota

Mount Graham Telescope Project

Need for Space

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Boston Arts Academy High School

• 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.

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Bio-Innovation Center

• 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.

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University Center

• 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

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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

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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