Las Vegas Sun

March 18, 2024

‘Howdy, pardner,’ colleges saying to developers wanting to build on campus

In 1955, when state lawmakers gave $200,000 toward UNLV’s first building, the money came with a condition: Southern Nevadans would have to come up with $35,000 to buy land that would become part of the university’s Maryland Parkway campus.

They met the challenge. High school seniors from throughout the Las Vegas Valley knocked on doors, asking for money.

Today, higher education officials are finding that in at least one way, little has changed in the past half-century. They know schools can’t depend on the state to finance all of their capital needs.

With construction costs soaring and Nevada tapping its rainy day fund to pay for basic services, that problem has become all the more acute.

So Southern Nevada’s colleges are inviting private investors to build and finance major campus projects that could yield rewards for both.

Developers could sell homes to faculty or rent dormitories to students. Money from leases or revenue sharing with retail centers on college grounds could help pay for campus improvements.

The goal is the same: By leaning on private businesses, colleges would have greater financial autonomy. And in a state where lawmakers meet every two years to allocate public money, using private dollars would let colleges build more quickly.

The concept is not new. Campuses including Cal Poly Pomona and Georgia State University have been partnering with businesses for years to construct facilities without state money.

And now colleges here are embracing the model.

The partnerships could transform college campuses into miniature cities, with shops and services open to the surrounding community.

But the deals come with risks.

Profit motive a concern

By accepting private financing, colleges would cede partial control of projects to companies more interested in profit than in the public good. Large retail developments could provoke more criticism from surrounding communities than traditional academic complexes.

Still, “the private-public model is the future model for higher education,” says Fred Maryanski, president of Nevada State College in Henderson.

Large swaths of Maryanski’s five-year-old college, whose first building is slated to open in summer, will rise on a foundation of private dollars.

While retaining a core of academic buildings, the school plans to lease some of its 509 acres to builders who would develop up to 1,400 units of housing for faculty, staff and K-12 teachers.

The college could also enter into revenue-sharing agreements with such on-campus businesses as clothing and housewares shops, an office park and a medical clinic where nursing students could work.

Such hybrid campuses are born out of necessity, Maryanski says.

“If we want to have a viable college in this day and age, the college has to be a landlord and an entrepreneur,” Maryanski says. “The state is not prepared, nor did we ever expect it, to give us $2 billion,” the estimated cost of building out the campus to support 25,000 students by 2031.

For developers, colleges offer good real estate deals and a stable customer base.

In Nevada, property tax is generally not assessed on campus land, an added incentive for private entities to build on campuses. The exception is Nevada State College, which gained legislative approval last year to collect property tax from developments on campus to help bankroll future capital improvements.

Developers compete

At UNLV, two developer teams are vying to build and operate a hotel and conference center on the school’s main campus off Flamingo Road. The decision could come down to what each developer will offer UNLV academically.

The new facilities, part of a project called Innovation Village, will provide on-campus work opportunities for students. Scholars will conduct research there on hospitality-related products, services and technology.

“These partnerships are best when each entity brings something unique to the partnership,” Gerry Bomotti, UNLV senior vice president of finance and business, says in an e-mail. “In the case of Innovation Village we have land but we don’t (specialize in) designing or operating a hotel/conference center.”

The UNLV Research Foundation wants to partner with private developers to build a research and technology park that will house laboratories and office and research space on 115 acres of land at Durango Drive and Sunset Road. Though details are pending, the idea is for the center to generate revenue for UNLV.

The College of Southern Nevada, too, has ambitious plans for 35 acres at North Durango Drive and West Elkhorn Road in the northwest part of town.

Officials hope to transform the land into a village with a bookstore, eateries and other shops alongside academic buildings, says Richard Hinckley, the school’s general counsel.

Private partners could be induced to help pay for construction of new facilities and businesses occupying college land could generate revenue for the school, says Patty Charlton Dayar, vice president of finance and budget.

The vision is for amenities to be so attractive that even locals with no affiliation with CSN would patronize the businesses.

It might all sound so simple, so obvious.

But bringing so much commerce onto public property concerns people such as Sherry Rosenthal, an English professor who has taught at CSN for a decade. Rosenthal, who runs a blog critical of current and former college leaders, worries that campuses’ academic ethos could suffer.

“When you have somebody going to the class and then in the span of maybe two, three, four hours going shopping or popping in at Starbucks or going shopping for groceries, there’s a mix of education and everyday life that tends to take people’s minds off the seriousness of education,” she says.

Partnerships face other roadblocks, too.

Neighborhood opposition

CSN put on hold plans for a 361-unit revenue-generating apartment complex on its Henderson campus in the face of infuriated homeowners. Ten percent of the units would have been reserved for CSN faculty.

Some neighbors say they would support academic facilities but view as tenuous the link between the apartment complex and the college’s education mission. On Chimney Rock Drive, a quiet Henderson street adjacent to CSN and lined with single-family homes, signs saying “No Apartments” adorn many yards.

And public-private deals can sour quickly when private partners turn out to be unreliable.

Such was the case when a private dental clinic operator promised to help bankroll UNLV’s fledgling orthodontics program in exchange for the promise that some graduates would work for the company. In 2006 the company reneged on the deal that would have given UNLV $40 million over 30 years, leaving administrators scrambling to fill revenue holes.

Partnerships to support programs are “very different animals” from construction partnerships, says Daniel Klaich, executive vice chancellor of the Nevada System of Higher Education.

Even so, the lesson to take away from the failed orthodontics pact is that public officials need to scrutinize private collaborators before sealing a deal, Klaich says.

“Do your homework, do your due diligence, be very cautious and understand your worst-case scenario,” he says.

If administrators are vigilant, the rewards of public-private partnerships could be great.

Bomotti hopes to see the hotel and conference center open on school grounds in fall 2010.

At Nevada State College, the first faculty housing on campus could be under development two years from now.

And like the state college in Henderson, CSN’s northwest property could soon become a veritable city within a city, a far cry from the enclave-styled campuses of the past and — if Maryanski is right — a model for the college of the future.

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