American Campus Communities and ISU Partner on $59.6M Student Apartment Project
- May 02, 2011
Normal, Ill.–American Campus Communities Inc. and Illinois State University, in a public-private partnership endeavor, will officially commence development of Cardinal Court on campus in Normal, Ill., with a groundbreaking ceremony on May 3. The $59.6 million project will yield an 896-bed apartment-style housing community.
Cardinal Court will occupy a 14.5-acre site on Gregory St. that had been home to a 1950s-era housing complex that had grown far too outdated to accommodate students’ modern needs. “We were hoping for something that would function as a student apartment building, but also provide some of the same attention students get at traditional residence halls like staff living onsite and special programs,” Jay Groves, director of media relations and assistant to the president at ISU, tells MHN. “We want to create student housing that would be characteristic of a very, very high-quality university.”
Designed by the architectural firm of Solomon, Cordwell and Buenz, Cardinal Court will feature five four-story residential buildings containing a total of 228 two-, three- and four-bedroom apartments for sophomores, juniors and seniors attending ISU. The fully furnished units will have the high-tech infrastructure students require today, including high-speed Internet access and cable television. Serving as the literal centerpiece of the property will be the 16,400 square-foot community center, encircled by the residential structures. The facility, in addition to providing an administrative and visitor center, will offer a fitness center, a theater, a café, meeting rooms and a lounge with a gaming area. Outside, the property will feature volleyball and basketball courts, seating areas and 677 surface parking spaces.
“Colleges and universities are looking to upgrade their obsolete housing stock by replacing it with modern apartments that are more similar to what today’s college students grew up with at home,” Gina Cowart, ACC vice president of investor relations and corporate marketing, tells MHN. “This means more privacy and more independent living combined with more amenities where they can study together or socialize with friends.”
In addressing the issue of outmoded, on-campus student housing, Bill Bayless, president and CEO of ISU, did not want to answer a contemporary problem with an antiquated solution, a determination that ultimately gave rise to the university’s very first public-private housing initiative. After receiving a bevy of responses to its Request for Proposals, ISU found that ACC was the right partner.
ACC orchestrated financing for Cardinal Court through a fixed-rate bond issuance by Collegiate Housing Foundation, a non-profit organization that owns the project and leases the ground from ISU under a 40-year agreement. Upon expiration of the ground lease, the apartment complex will come under the school’s ownership. “This public-private partnership is a great way to be at the national forefront of creating student-housing solutions without creating additional debt for the university or for the State of Illinois,” Groves says.
More and more colleges and universities across the country began to pursue public-private partnerships for the development of campus housing as the nation went on a downward financial spiral. “Endowments shrank all across the county,” notes Cowart. “Colleges and universities also saw funding from state budgets cut further.” However, while funding declined, enrollment did not. From the fall of 2008 to the fall of 2010, national college enrollment increased from approximately 19.1 million to 20.6 million, according to the National Center for Education Statistics.
And as the country eases out of the recession, the trend of turning to public-private partnerships for campus housing projects continues. “Now more than ever, public and private institutions are looking at alternate means of delivering student housing instead of using their own balance sheet,” Cowart continues. “In some cases that may mean joint ventures with companies like American Campus using our own equity like we have at Arizona State University, or it may mean third-party development via a 501(c)(3) 100 percent project-based debt like Illinois State University.”
ISU staff will manage Cardinal Court, which is scheduled to accept its first occupants in August 2012. “They will go like hotcakes,” Groves predicts. “We’ve upgraded five residence halls, and once the first one was done in 2005, students flocked to it. We expect Cardinal Court to lease up in about three minutes.”