Education leaders have OK’d a first-ever partnership by the University of Utah with private developers to build a 1,455-bed student housing complex near the Jon M. Huntsman Center.
Friday’s unanimous approval by the Utah Board of Higher Education pushes forward major and ambitious U. goals of lifting enrollment and adding up to 5,000 residential units to its Salt Lake City campus within the next five to six years.
The U. will team up by leasing the land, while a Texas company called American Campus Communities will build, manage and maintain the new six-story residence hall, to be located south of Kahlert Village.
The dormitory is set to open by fall 2026.
(University of Utah) Rendering of a new 1,455-bed residence hall proposed at the University of Utah, to be built near Kahlert Village as part of a public-private partnership with a private developer, American Campus Communities, based in Texas.
The public-private partnership also appears to further U. President Taylor Randall’s vision for transitioning the state’s flagship university away from a car-centric commuter campus to a more residential model, suffused with what school officials now refer to as “college town magic.”
Part of that, Randall told students recently, will involve creating more of a 24-7 college experience on campus.
The $155 million deal, officials said, is structured to limit the U.’s financial exposure in building much-needed housing, letting it preserve budget resources and bonding capacity for future construction.
Its lease on the land will also give it a new income stream, according to a report by the Utah System of Higher Education.
Nate Talley, the system’s chief financial officer, said Friday that allowing a private developer to deliver the housing was a way “to engage the best of the best to do what they do best” — while letting the U. “focus on other priorities in a way that results in higher quality and lower costs over time.”
New approach to housing
(University of Utah) Rendering of a new 1,455-bed residence hall proposed at the University of Utah, to be built near Kahlert Village as part of a public-private partnership with a private developer, American Campus Communities, based in Texas.
Under the deal, the U. will offer a 55-year lease on the 2.9-acre property near Kahlert as well as chip in around $12 million, mostly to complete a host of facilities and manage programs offered on the dormitory’s first floor.
American Campus Communities, a subsidiary of hedge fund and asset manager Blackstone Inc., will put up roughly $136 million and will own and run the hall’s upper floors for those five-plus decades.
About another $3 million from the U. will go toward prepping the site, which was formerly devoted to surface parking.
U. Chief Real Estate Officer John Creer said American Campus Communities will be responsible for owning, maintaining and continuing to invest in the residence hall “with no obligation to the university.”
“In other words,” Creer told higher-education officials, “if in 20 years the roof falls in, it’s their obligation to replace it at their cost.”
(Francisco Kjolseth | The Salt Lake Tribune) University of Utah President Taylor Randall arrives for commencement ceremonies at the Huntsman Center on Thursday, May 2, 2024.
The U. isn’t obliged to guarantee the hall is occupied, and its public-private contract forbids the owner from ceasing operations, or “going dark.”
After the ground lease expires, building ownership will revert to the university. And if its partner moved to sell the hall before that, the U. would have first rights to buy it.
While managed by American Campus Communities, rooms in the new residence hall will be offered as part of the U.’s overall housing stock, made available through the school’s housing portal and application process.
Students, Creer said, “will not know the difference between privately owned or university-owned.”
Gaming hub, bouldering wall — and more
(Rick Egan | The Salt Lake Tribune) Kahlert Village student housing at the University of Utah, on Monday, Aug. 5, 2024.
Creer and others have said the new building will also help address a lack of on- and off-campus housing units and long waitlists as the school, city and state continue to endure a housing shortage.
The deal promises to advance bigger U. objectives, officials said, of boosting enrollment to 40,000 students from about 35,000 or more this year and letting all first-year students experience residential life on campus.
U. studies indicate that on-campus housing has potential to improve students’ experiences and raise graduation rates.
The new hall’s bed capacity is on par with that of Kahlert Village, first opened in 2020, which is currently the U.’s largest residential enclave with the addition of a fourth wing in late 2023.
Renderings of the new residences provided by the U. depict a futuristic metal-clad cluster of new buildings supported by terraced green courtyards and walkways, all immediately adjacent to TRAX light rail.
Its interior design will reportedly play off visual motifs and textures inspired by the Wasatch Front’s canyons.
A U. announcement of the partnership said the hall will have a mix of single and double rooms along with semi- and full suites, with a total of 349,342 square feet for use mostly by first- and second-year students.
Its ground floor spaces, meanwhile, could become something of a campus attraction.
Plans call for 17,000 square feet devoted to a gaming hub and dining and fitness facilities, with amenities to include a 135-seat cafe, an indoor bouldering wall, outdoor patio, bike parking and repair, and ski and snowboard equipment storage — all themed, the U. said, to highlight the natural beauty of the dormitory’s surroundings.
Construction starts this month
(University of Utah) Rendering of a new 1,455-bed residence hall proposed at the University of Utah, to be built near Kahlert Village as part of a public-private partnership with a private developer, American Campus Communities, based in Texas.
Though not uncommon at colleges and universities nationwide, the public-private approach will be a U. first. The approach won approval from the university’s board of trustees in early September.
The deal requires the Utah Board of Higher Education to sign off, partly because it involves land owned by the university. Contracts for the transaction also require scrutiny by the board and the Utah attorney general.
Board members seemed to greet the deal positively Friday — with some saying its public-private approach might be adopted on future U. projects as well as at other Utah schools.
In 2022, the U. embarked on a 99-year collaboration with The Church of Jesus Christ of Latter-day Saints and the Clark and Christine Ivory Trust to build Ivory University House, a 552-unit community at the southwest corner of South Campus Drive and Mario Capecchi Drive.
Under that philanthropic deal, the church is leasing the land, while Ivory donated $24 million in a kind of annuity to back the transaction and another $6 million in seed money for student support. Revenues from the housing will go toward subsidizing costs for lower-income residents.
American Campus Communities is among the nation’s largest developers, owners and managers of student housing, with nearly 115 public-private partnerships at 65 colleges and universities under its belt since its founding in 1993.
The firm is privately held after its acquisition for $12.8 billion by a real estate arm of Blackstone in 2022
Officials said Utah-based MHTN Architects and Okland Construction, the firms that also designed and built Kahlert, are key partners in the U.’s new residence hall as well.
Construction on the new dorm is to begin this month.
