14. Consider permanent modular construction. Having a project finished on time can go a long way toward saving money. With permanent modular construction, the building is pieced together off-site under controlled conditions, with no restrictions on design, layout, mechanical systems, or other architectural design feature choices, explains Glenn A. Court, vice president of building development at Triumph Modular. The controlled manufacturing environment means no scheduling overruns and minimized downtime due to subcontractor delays or inclement weather. As the building is constructed, site development is already underway.
15. Ditch your construction manager. Rather than delay renovating Babcock Hall, a 75-year-old residence hall, leaders at The College of Wooster (Ohio) kept the construction manager role in-house. Around $200,000 in fees was saved by having trusted contractors work closely with an in-house design team. Catching up on deferred maintenance was the bulk of the project, but improvements included a new kitchen in the dining area, individual thermostats in student rooms, and motion sensor lights in public spaces.
16. Celebrate an opening—even for a building that lacks finishing touches. California State University, Fresno, officials got the bad news just as a $105 million library expansion and renovation project was nearing completion: The $8 million earmarked for furnishings and other equipment would not arrive, thanks to a state budget shortfall. Just before the spring 2009 semester began, students were notified that the building would open a month late—and with only about one-fifth of its furnishings (and most of these borrowed or rented). Although permanent furniture didn’t begin arriving until May, there was still much to celebrate, including an electronic book shelving system and the fact that the finished building makes it the largest CSU system library.
Funding: Methods and Messaging
17. Partner with a private developer. These firms can provide guidance in initiating and navigating the financing process. One such firm is Ambling University Development Group, which has helped secure bonds for 41 campus projects in the last decade. Utilizing a college’s tax-exempt status, the firm establishes a single-purpose LLC to serve as the project owner as well as to ground lease the required property from the institution for the term of the financing. Tax-exempt bonds are issued for the total cost of the project, which is solely guaranteed by Ambling, then paid back by rental, dining, and/or parking revenues from the project over a 30-year term. The separate LLC means that associated debt does not encumber the institution. Once the bonds are fully repaid, the ground lease expires and the land plus all improvements revert to ownership by the institution. Ambling recently partnered with Southern Polytechnic State University of Atlanta to develop a $45 million housing and dining complex, to be completed by next fall.
18. Use off-balance-sheet financing. It isn’t new, but it is working for the University at Buffalo to fund the South Ellicott Housing project. UB Foundation assets are being used as collateral to borrow money. Revenue from room rents pays the debt service on the loan.
A Connecticut College program to raise $53 million for facilities over seven years has kept donors motivated by focusing on the most visible projects, including a new fitness center.
19. Don’t give up hope on stimulus funds. The American Recovery and Reinvestment Act of 2009 provided hundreds of millions of dollars to education facilities for building enhancement, new construction, and more. Initially, “shovel-ready” projects—pre-existing proposals in search of funding—took precedence, and many of the submission deadlines have now passed. But there is money still available for building and infrastructure improvements, says Judy Marks, associate director of the National Clearinghouse for Education Facilities. Funding from the Treasury Department’s Build America Bonds program (see www.irs.gov/irb/2009-16_irb and click on “Notice 2009-26”) can be used for a wide range of projects, she says, including construction and modernization of higher education facilities. Additional dollars available for distribution are through Qualified Energy Conservation Bonds (see www.irs.gov/irb/2009-16_irb and click on “Notice 2009-29”). These bonds are awarded for capital expenditures that reduce energy consumption in campus buildings. Finally, there is still money available through the $2.4 billion Clean Renewable Energy Bond program (see www.irs.gov/pub/irs-drop/n-09-33.pdf). The program allows state higher education facilities to apply for bonds to finance qualified renewable energy projects.
