Presentation on theme: "Rochester Institute of Technology College Town Project James Fisher Assistant VP for Finance & Administration IPED Conference June 28, 2007."— Presentation transcript:
Rochester Institute of Technology College Town Project James Fisher Assistant VP for Finance & Administration IPED Conference June 28, 2007
Brief RIT Profile Founded in 1829 as Rochester Anthenaeum Coeducational, privately endowed university Enrolls over 15,500 full-time & part-time students in eight colleges Career-oriented education & leader in cooperative education since 1912 offering A.S., B.S, M.S, Ph.d Over 100,000 RIT alumni in all 50 states Operating budget of approximately $430M Situated on a 1,300 acre campus in suburban Rochester
College Town Project Genesis Suburban campus location 65% of students housed on campus Over 2,500 students in off-campus apartments Limited transportation & entertainment opportunities Recognition of increasing importance of student experience outside of classroom to competitive position & student retention
First Steps Internal discussions with various constituent groups on campus. Discussions with the Board of Trustees for endorsement of concept. Market study by external group 2001-02 with following objectives: – Create mixed-use development while achieving financial viability –Expand linkages between RIT & community –Offer convenient & value-oriented retail & service offerings –Create a non-institutionalized on-campus development while enhancing wetlands –Meet RIT student housing needs
Conclusions of Study Dissatisfaction with RIT almost always focused on perception of quality of life on campus. Students, faculty & staff expressed overwhelming support for the College Town concept. Accessibility to the campus was identified as a key component.
Conclusions (cont) Study estimated that students, faculty & staff spent approximately $51M annually on consumer items not available on campus, with over $16M potential for capture by College Town retail. Off-campus housing market was thriving with a small vacancy rate. (2.3%) A deficit of approximately 450 apartment beds existed & over 50% of students surveyed indicated preference for living in College Town apartments over other choices.
Conclusions (cont) Top businesses & facilities identified: –Stores: bookstore, clothing & shoe stores –Food: 24-hr diner, deli, pizza, market –Services: bank, post office, copy shop –Entertainment: movie theater, music club, bowling alley, sports bar –Outdoor Public Spaces: outdoor plazas, recreation fields, walkways to RIT
Next Steps Internal Prioritization – other significant capital projects addressed. 2002-2003 Request for Proposal for Mixed-Use Project: –Sent to over 20 developers in March 2004. –Envisioned the use of approximately 90 acres of the campus front door for project. –Intended to retain ownership of l& & provide a ground lease to developer for either 25 or 40 years.
Next Steps (cont) RFP (cont): –Anticipated two-phase project with retail in first phase & no guarantee of second phase. –Desired timeline called for first phase to be completed by January 2007.
Next Steps (cont) Results of RFP: –Two developers identified as finalists, one was a university trustee. –Both proposals identified need for commitment for both phases to be financially viable. –Extensive evaluation of both proposals by cross- university committee of students, faculty & staff. –Trustee firm proposal selected & award made in October 2004.
Path to Development Negotiation Considerations: –Target property offered severe issues with regard to wetland disturbance. Developer estimated it would take one year to obtain all necessary permits. –Trustee relationship added special requirements to demonstrate arms-length transaction. –University had limited experience with commercial retail development. Hired an experienced consulting firm to review proposal & terms in early 2005.
Path to Development Negotiation Progress: –Consultant verified terms to be reasonable relative to the market. –Concern about changes in financial treatment for third-party development & keeping project debt off the university books. –Ground lease draft prepared & delivered to Developer, June 2005.
Path to Development (cont) Change of Direction: –Developer proposed outright purchase of land to address wetland permitting process & university concerns over accounting treatment. Sept. 2005 –Nature of parcel made appraisal extremely difficult. –First appraisal obtained on 90 acre parcel taking into account estimated mitigation costs. Initial purchase offer refused. –Agreement reached with Developer to reduce project parcel to 60 acres to reduce amount of included wetlands.
Path to Development (cont) Developer Negotiation: –Second, mutually agreeable appraiser identified & appraisal done on 60 acre parcel excluding cost of mitigation. February 2006 –Adjustment for mitigation costs & required buffer areas applied & purchase price agreed to by university & Developer. April 2006 –Sale agreement negotiation begins in earnest.
Path to Development (cont) Developer Negotiation (cont): –University desires to retain certain restrictions on use of property that were reflected in ground lease. Requires drafting Restrictive Covenant Agreement. –Additional 15 acres of university land needed for wetland mitigation of disturbed wetlands. Permitting agencies require a formal Conservation Easement be drafted and recorded. –RIT wishes to retain ownership of the mitigation land but desires compensation for the permanent encumbrance required by the Conservation Easement. Requires drafting of a License and Management Agreement.
Path to Development (cont) Developer Negotiation (cont): –Developer makes sale contingent upon university becoming anchor tenant by relocating its bookstore to College Town and transition to a Barnes & Noble managed store. Necessitated successful negotiation of a Management Contract between RIT and Barnes & Noble Collegiate Booksellers. Necessitated successful negotiation of a Lease Agreement between RIT and Developer.
Path to Development (cont) Developer Negotiation (cont): –Due to the location of the development, access to sanitary sewer facilities required lines to be laid across land, parking lots and driveways associated with a university-owned student apartment complex. This necessitated drafting and recording a Sanitary Sewer Easement between the university and the Town.
Path to Development (cont) Developer Negotiation (cont): –University was in the midst of a major capital campaign & President secured the gifting of the entire parcel & improvements from the Trustee at the end of 40 years. The pledge is unenforceable & revocable but the university wishes to ensure that property reverts to RIT. This necessitated the drafting of both a Right of First Refusal Agreement & Option to Purchase Agreement between RIT & Developer.
Path to Development (cont) Meanwhile…the permitting process was stalled with the Army Corp. of Engineers. –First initiated process with both DEC and ACE in October 2004. –First target date for obtaining final permits was October 2005. –Second target date was June 2006. –Third target date was October 2006. –Actual delivery of approved permits was April 2007.
Path to Development (cont) In order to meet construction timelines Developer needed to begin construction immediately upon receipt of wetland permits. A number of the contractual documents were still having minor revisions incorporated. To facilitate progress, a License, Indemnification and Insurance Agreement negotiated and signed between RIT and Developer providing access to the site.
University Process Sale Agreement and Lease Agreement required the following: –Review and recommendation to approve by Board of Trustees Buildings & Grounds Committee. September 2006 & May 2007 –Review and approval of Sale and Lease Resolutions by Board of Trustees Finance Committee. April 2007 & May 2007
Where Are We Now? Developer began construction at site on April 26, 2007. All contractual documents were executed and closing occurred mid-June 2007. Project groundbreaking ceremony occurred on June 22, 2007. Transition of campus bookstore from self- op to Barnes & Noble management will occur on July 1, 2007.
Where Are We Going? Project renamed Park Point and website under development by Developer. Apartment leases planned to begin to be taken in Fall 2007 for September 2008 move-in. Bookstore to be delivered for final fit-out by June 1, 2008. Project to be completed and open by September 2008.