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Baby Boomers, Back to Campus

What would it be like to retire on a college campus? More older adults are about to find out.
University Business, Feb 2008

WHEN THEY WERE YOUNG THEY WENT to college campuses in droves. They are the baby boomers-the generation born between 1946 and 1964-and they total 82.8 million, according to U.S. Census data. This is the most educated generation in American history, the generation for which higher education was the ticket out of the blue collar and industrial lass and into better jobs and bigger homes. In fact, they were often the first in their families to get a college education.

Real estate developers and higher ed administrators now are banking on the hope that this age group, now ages 43 to 61, wants to come back to campus-only this time they won't be rushing fraternities or leading protest marches.

They will have plenty of comfortable living space, great rooms for entertaining, special studios onsite for art and writing projects, conference rooms for taking classes, and field trips to nearby museums. Special on-campus communities designed just for them will make this easy.

This is not going to be your father's retirement lifestyle.

There already are significant changes taking shape in the senior housing and assisted living markets that will help spur the campus and senior adult connection, observes Andrew Carle, director of a program on these subjects at <b>George Mason University</b> (Va.). "I've conducted interviews with boomers. When they retire they don't want to go to a golf course or some place on the side of a mountain. They want a place that is active, intellectually stimulating, and intergenerational. Think about it. I just described a college campus."

This generation tends to be more urban than rural, he adds. Boomers have what are described as "hungry minds," and they plan to read, debate, and do creative projects for years to come.

Administrators at a growing number of higher ed institutions are hip to the aging demographic trends and are planning accordingly.

There already are an estimated 22 such retirement communities linked to colleges and universities that have opened either right on campuses or near to them. Some of these communities, such as Lasell Village at <b>Lasell College</b> (Mass.), opened in 2000, and Capstone Village, affiliated with the <b>University of Alabama</b> and opened in 2005, are home to people even older than the boomers, who may need assisted living and health care services.

Others, like the planned Veridian Village at <b>Hampshire College</b> in Massachusetts' Pioneer Valley, or University Commons, located in Ann Arbor near the <b>University of Michigan,</b> are for younger, independent 50-somethings.

The trend to build adult communities on college campuses is seen as a win-win for older alumni and supporters of higher education and universities and colleges, says Gerard Badler, managing director of Campus Continuum, a company that helps develop and market university-branded adult communities.

"From the university's perspective, many are looking to attract seniors who want to use facilities and attend classes," he notes.

The stream of adults and even older retirees coming to campus may help solve other problems looming on the horizon for higher education. As the millennial, or echo-boom, generation graduates and leaves campus, the group will not be followed by a population of equal size. Currently the millennial generation is the second largest segment of the American population, second only to the baby boomers, who by 2011 will be the fastest growing segment of the population in all 50 states, according to futurist and author Andrew Zolli.

Bringing baby boomers back to campus makes perfect sense for keeping a community vital. This is part of the draw for Hampshire College, whose Veridian Village should be completed in 2010, according to the marketing materials. "Hampshire is a young college," explains President Ralph Hexter. The college's first students enrolled in 1965, becoming part of the area's Five College group that also includes <b>Smith College, Mount Holyoke College, the University of Massachusetts, Amherst,</b> and <b>Amherst College.</b> "We do not have as big an endowment as our neighbors," Hexter adds. Nor is Hampshire's alumni pool as large, given its relative youth compared to the older institutions that surround it.

'When [boomers] retire they don't want to go to a golf course or some place on the side of a mountain. They want a place that is active, intellectually stimulating, and intergenerational.' -Andrew Carle, George Mason University

But what Hampshire does have is land-850 acres. It will lease a portion of this land to Beacon Communities, the developer of Veridian Village, to generate annual income.

Veridian Village, which is costing $65 million to build, will use 18 acres for the housing and related buildings. Another 32 acres will be put under a conservation restriction. Because Hampshire is a progressive, liberal arts college, and the market targeted for Veridian Village is socially conscious boomers, the new facility and its environs will be green and sustainable. Many of the construction materials are made from recycled products; windows and appliances will carry the Energy Star endorsement; all buildings will be constructed to be energy efficient; there will be onsite farming to provide food and reduce waste; and a greenhouse will be built, in part so that residents interested in the environment can participate in related continuing education.

If it all sounds idyllic, it is meant to.

But eager campus developers beware: There is much that can go wrong in planning a campus retirement community. It pays to learn from the case studies already on the books, warns Carle.

Today Carle holds Lasell College up as a positive model in this area, but he notes that the college had some rocky beginnings with its adult community. "Through hard work and sweat they saved themselves," he adds. Early on, Lasell teamed with a developer that was struggling financially, says Carle. Administrators didn't know this.

The college ended up holding the bag when the developer went bankrupt. The institution managed to extricate itself from the original financial agreement and took over the management of the adult community.

Zoning issues proved to be another stumbling block. In the 1980s, Lasell administrators targeted a parcel of 13 acres to be used for something related, such as private housing. "We were interested in older adult housing; we thought this would be the best use," says Paula Panchuck, dean of Lasell Village. The city of Newton initially denied approval.

Lasell executives regrouped and based a new pitch on the Dover Amendment, a part of general Massachusetts law that exempts religious and educational institutions from certain aspects of zoning law if what they are doing is part of an overall mission. In Lasell's case, administrators argued that Lasell Village would be an extension of the college's academic mission.

Eventually the college took over the Lasell Village project and opened with 162 housing units. Additions in 2003 and 2006 brought the total to 188 units. "It was clear we had happened upon something that is in demand. The typical benchmark is 10 years for an adult community to be completely full," Panchuck says. Residents pay for their units-a price that can range from $250,000 to $750,000. In addition, they pay $3,000 to $5,000 monthly, depending on how large their unit is, to cover housekeeping, maintenance, service calls, and educational materials such as books, art supplies, and studio use.

Lasell Village generates about $500,000 in profit annually for the college, according to Panchuck. Those profits are used to improve facilities care at Lasell Village, for information technology, and to cover other costs. The college and the housing community also enjoy cost sharing and savings on some utility rates, says Panchuck.

While Lasell's story has a happy ending, Carle also holds up <b>Eckerd College</b> in St. Petersburg, Fla., as an example of what can go wrong. In 2001, the college structured an agreement with a land developer that made the college responsible for certain costs. When the developer ran into financial trouble, Eckerd ended up spending $21 million out of a $30 million endowment, according to Carle.

"Everyone thinks they can do what Lasell did. Most would end up like Eckerd," says Carle, casting doubt on the idea that a college can outright own and manage an adult community. He encourages outsourcing instead of outright ownership.

Building an adult community, especially one that might offer health care services, is complex. "I had one facilities executive say to me, 'We built dorms; this is the same thing,'" says Carle. Ironically, that same executive believes in outsourcing food service.

If food service is better in the hands of an expert, so might be an adult community, Carle argues. "This is not like running a country club for retired faculty and staff," warns Carle. It is related to health care and aging issues and services, which bring their own legal liability and responsibility. It is best to share that liability with other companies.

He notes that after 12 years of managing an adult community, <b>Stanford University</b> has outsourced to Classic Residence by Hyatt, a division of the hotel and facilities company, to run what is promoted as a luxury community but which also includes continuing health care services.

Adult communities built on or near higher ed campuses fall into one of two categories, explains Badler, who is currently helping to develop Campus Continuum at <b>Juniata College</b> (Pa.).

There is the continuing care retirement community (CCRC), which includes some type of health care service-perhaps an Alzheimer's unit, assisted living, and other services. The average age for residents is 84, adds Badler. Most adults enter these facilities at 78, after having retired "in place" for some years in their own homes. Units are usually sold to residents via an entrance fee. Residents receive a portion of the fee when they move out, or their beneficiaries receive it when they die.

For example, a retired couple might pay a $295,000 entrance fee to live in a townhouse in an adult community, then receive 90 percent, or $265,500, of that when they leave. The managing company retains the other 10 percent. The residents do not legally own their unit, similar to the setup with cooperatives. On top of this, the couple would probably pay a monthly fee of several thousand dollars for other amenities, such as housecleaning and personal care. In the case of a community built on the grounds of a college, this might include some tuition costs to attend classes either on campus or right at the adult facilities, or to participate in on-campus cultural events.

Eager campus developers beware: There is much that can go wrong in planning a campus retirement community.

The CCRC model is an expensive one to operate, given the costs of providing health care to the aging population. "It also is more difficult to fund," says Badler. "You usually have to have two-thirds of units sold before you can get other financing." Developers usually turn to investment bankers to structure these financing deals.

Lasell Village is the only known example of a CCRC run directly by a higher ed institution, notes Badler. Other IHEs have helped build communities on this model, including <b>Dartmouth College,</b> which has the Kendal at Hanover community; <b>The Pennsylvania State University,</b> which has The Village at Penn State; and the <b>University of Notre Dame</b> (Ind.), with Holy Cross Village at Notre Dame.

Fifty-five-plus is the other common model and the one that Badler predicts will be more prevalent on campuses in the future. It is also easier to fund, requiring usually one-third of units be sold before drawing in other funding. The target group here is much younger-ages 55 to 70-and there are no health care components. These are independent adults in good health who may still be working or launching encore careers. If they require health care services, they will pay for them, or move to another location. They are probably doing all they can to remain young in spirit, which is why developers would be wise to eschew phrases like "senior citizens" and "retirement" when marketing these communities.

"Boomers have never met a stage of life they didn't want to remake in their own image," writes Andrew Zolli, futurist and author. "Their golden years will be no exception. Watch grandma windsurf! Pole vault! Pole dance!"

Fifty-five-plus residents buy their units outright and resell if they want to. Hampshire's Veridian Village will be set up on this model, with residents being allowed to attend classes and being encouraged to attend and even volunteer at Hampshire's National Yiddish Book Center and the Museum of Picture Book Art.

Veridian's model fits into Carle's other secret for success. He encourages IHEs who go into the adult community business to develop "two-directional programming." Bring adults into the campus community and bring young students into the adult village. No older adult wants to be the "stranger on campus"-aimless with no real human connection. The goal is to be vital, flexible, ever young at heart-just like those baby boomers who will soon be driving through the campus gates.

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