Overview of the Arizona State University (ASU) – American Campus Partnership
Arizona State University (ASU) in Tempe has pioneered and been the standard bearer for privatized on-campus housing. Since 2000, it has developed approximately $700 million in new campus housing facilities with approximately 9,500 beds under privatized structures. The developments span the spectrum of project types, including full-service residence halls for the first-year experience, residence hall suites, apartments, townhomes, honors college, upper-division student housing and Greek housing.
ASU has used virtually every type of privatized financial structure, including the 501(c)3 foundation and 63-20 corporation not-for-profit structures, tax-exempt debt with subordinate developer equity, and various developer equity programs. Under the leadership of university President Michael Crow, ASU desired a financial plan that would improve its housing options for students while preserving its balance sheet. The university formed a partnership with ACC with the launch of a pioneering transaction program called American Campus Equity (ACE®).
The first ACE project on the main campus, Vista del Sol, opened in 2008 as apartment-style housing serving upper-division undergraduates and included retail. In the years since, the partnership has evolved with additional product types and extended to a satellite campus. ACC projects include a complete mixed-use honors college with housing, food service and academic faculty space (Barrett Honors College); freshman housing and dining facilities on West Campus; redevelopment of an iconic campus landmark (Manzanita Hall); and expansion of the original undergrad housing (Villas at Vista del Sol). This is all achieved with zero taxpayer dollars.
Manzanita Hall and a blended approach.
In early 2009, ASU approached American Campus with a true dilemma for the university. What to do with Manzanita Hall? Built in 1966 using an advanced post-tensioned concrete structure, the residence hall had served as the first home away from home for thousands of ASU freshman. It had become a beloved campus landmark that had outlasted its original usefulness. While it was always a sound and structurally safe building, the residence hall’s systems were outdated and expensive to maintain. Interior spaces were cramped, dim and uninviting to the modern university student.
ASU’s dilemma: Demolish a campus icon or spend millions to update what were essentially shoebox-sized accommodations.
ASU challenged American Campus to find a way to save Manzanita Hall. The ASU-ACC partnership had just delivered the popular Vista del Sol apartment community and work on Barrett, the Honors College, was advancing smoothly toward a fall opening. Still, Manzanita represented a more difficult challenge. Because of the great expense involved in gutting the 15-story high-rise, upgrading accessibility and life-safety features and replacing all of the building systems, as well as completely redesigning it as a full-service residence hall that would be attractive to modern students, project feasibility was severely challenged.
American Campus went to work on two fronts – redesigning a 45-year-old campus icon in a way that honored the original aesthetic while providing modern accommodations and identifying a customized feasible financial model. The ultimate solution was an approach that balanced the economics of the Manzanita project along with other more viable projects the partnership had considered.
ACC proposed pairing the $50.5 million Manzanita development with the development of a new residence hall at ASU’s growing West Campus ($15 million) in Phoenix, along with a second phase and new product type in the Villas at Vista del Sol ($22 million). Together the triad of projects meets American Campus’ investment requirements for the company’s American Campus Equity (ACE®) and still functions as three distinct ground-lease deals with the university.
This blended approach turned Manzanita from a no-win scenario for ASU to a win-win-win solution for the partnership.
Project planning for the redevelopment began in May 2009 and included a planning summit, design meetings and a sustainability workshop involving ASU leadership and the design and development team. Innovations included improved floor plans allowing for privacy, academic and social spaces for community engagement and enhanced sustainability features that have the project tracking LEED® Silver. The building reopened in Fall 2013 as a modern residence that delivered a contemporary student living-learning environment in the venerable campus landmark.
|Vista del Sol
|Barrett Honors College
|Villas at Vista del Sol
|ASU West – Casa de Oro