Jim Tucker, Senior Fellow, AGB Institutional Strategies
To address the challenges of the current higher education environment, many institutions are embracing public-private partnerships (P3) to unlock the value of their campus properties, generate revenue, and create attractive campus facilities. Public-private partnerships benefit all stakeholders: the public sector benefits from the unique resources and networking capabilities of institutions, while the private sector contains the expertise needed to facilitate the use of those resources.
Many colleges and universities see P3s as a prime method to accomplish the construction of new student housing facilities with retail spaces on the first and second floors. Others utilize P3s to renovate or revamp existing housing facilities. P3s, if done correctly, produce facilities that generate revenue for the institution and draw students into the campus. Ensuring P3 success involves:
- Recognizing that development projects are real-estate deals and need to be financeable.
- Using your board or board finance committee to level the playing field during negotiations with the developer’s financing team.
- Building relationships and keeping an open mind!
Institutions that embark upon public-private partnerships should identify their goals upfront, know their potential partners, and be sure that those partners are a good match for what they want to accomplish. While not a panacea for the fiscal woes confronting many colleges and universities, such partnerships can be viable options to help increase resources and improve educational offerings.