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The Mighty Multiuse Facility

IHEs are building impressive mixed-use facilities to attract new students, benefit the community, and generate extra revenue.
University Business, Oct 2004

Boasting 85 acres of available land and a sunny, southern California location, California State University, Dominguez Hills (CSUDH) had every reason to believe that building a $150 million, 125-acre multiuse facility would draw crowds. The facility, known as the Home Depot Center, which features Olympic-level soccer and tennis stadiums, an enclosed velodrome, a track and field complex, baseball and softball fields, and new parking facilities, has done just that. Attracting more than 750,000 people to the university since its completion last June, the center is generating money and prestige for the university.

"We've reached a level of success that has surprised everyone," says George Pardon, vice president of administration and finance for the university. "The center has given us national visibility and name recognition. It has brought celebrities and politicians who before wouldn't return my calls."

But, CSUDH couldn't have done this alone. The center's success is a result of a public/private partnership between the university and the Anschutz Entertainment Group, who also owns other sports facilities including the Los Angeles Staples Center. The Anschutz Group privately funded this project. "This partnership works because we didn't want to have any debt service from our perspective," Pardon says. "We've had the available land to do it for awhile. But we were waiting for the right business partner--one that would help us on a number of fronts such as advancement, facility upgrades, and enhance the university overall."

" We have always been considered
kind of an enclave. Our president
wanted us to get rid of this perception
and open our doors to the community."
-George Hanbury, Nova Southeastern University

Of course there's also an important economic benefit to the center. The university is guaranteed a percentage of ticket and parking sales set at a rate that ensures that university generates at least $200,000 per year. This amount is subject to change based upon increases in the consumer price index. Since its construction, the campus has received approximately $450,000 for its share of revenues. "$450,000 is a comfortable figure for us. If we can maintain that or in that range, we will be happy," Pardon says. In addition, the developer agreed to give the university an additional $250,000 per year for the first four years. It has already received $500,000, which means that the university has brought in close to $1 million in its first year of operation.

From hosting the annual commencement ceremony to rock concerts and volleyball tournaments, the center is truly a multiuse facility. Popular events have included the JP Morgan Chase 2004 Open Women's Tennis Tournament, which brought the virtually unassailable Williams sisters to campus, and the popular Dave Matthews Band. The velodrome hosted the Junior Track World Championships this year, while the soccer stadium is the official home of the Los Angeles Galaxy MLS soccer team and high school football championships.

The center's success is also contingent on the community's support of and involvement in the center. While most area residents see the center as a positive addition to the community, some have expressed concern over the increased car traffic, pollution, and noise--the unfortunate by-products of a bustling center. Some residents even tried to stop the project and filed lawsuits. "Learning how to share a campus is frustrating. It's an operational complexity," says Pardon. Because the university is surrounded on three sides by residential communities, it must be mindful of what types of events it holds and when it holds them. "We can't do ad hoc events on a weeknight anymore; nor can we invite a band like Metallica to play," he says.

Overall, the center has been embraced by the community, especially in the business sector. In many ways the center has stimulated economic growth for the community. Not only has it created more than 2,300 new jobs, but it has also produced $375,000 in new annual tax money directly to the city of Carson, the university's hometown. It also has encouraged additional retail development, which can be seen by the construction of several new restaurants, two new hotels, and the demand for more.

Lastly, the center has boosted undergraduate enrollment and student pride. The university saw a substantial increase in enrollment immediately after the venue was constructed. But, then, like the 22 other California State Universities, it was forced to take a five-percent enrollment cut earlier this year. "It was bad timing. We were right at the point where we believed the visibility of the project was going to move us forward quickly," Pardon says. Nonetheless, Pardon still expects to see increased interest in the university.

Nova Southeastern University (Fla.), a private nonprofit institution, also has recognized the value and moneymaking potential of a multiuse facility. NSU plans to construct an Academical Village, a term coined by Thomas Jefferson who envisioned this as a community where scholars and students live and work together. "We are expanding his concept to the 21st century," says George Hanbury, executive vice president for administration at the university. Chock full of commercial developments, the $350 million investment, will add up to two million square feet of research, office, retail, and residential space. While the project is being mostly funded by private developers, the university has bought 50 percent of a 30-acre shopping mall, which will be torn down and transformed into part of the development.

The Village will house 550,000 square feet of multifamily, for-rent apartments, 110,000 square feet of retail shops, a Barnes & Noble bookstore open to the public, restaurants, business offices, government research labs, and a hotel with a conference center and corporate offices.

Attracting retailers to campus was the easy part. "We didn't have to market this project at all," says Hanbury. "They contacted us. Who wouldn't want the opportunity to be incorporated into a vibrant university? It's a way for these retailers to stand out from the rest." The Village will offer 270 acres of non-for-profit facilities and 30 acres of for-profit facilities. "We'll be integrating them together so that it's somewhat seamless," Hanbury says. "We don't want it to seem as if we're commercializing the university to the point of it being negative."

As with every multiuse project, there is a bottom line goal. In NSU's case, it is to boost its endowment. "Even though we're the tenth largest private non-profit in the country, we're not that large in endowment," he says. "By having a returning income on investment our endowment will build so we can assist scholarships and research." Hanbury hopes to see a five to ten percent return on investment from the for-profit side, which includes the retail shops, apartments, and hotel.

The community will also reap some financial benefits. The development is expected to create $12.5 million a year in tax revenues for Broward County, where the university is located. But more important, the community will gain better access to the university and its amenities. "We have always been considered kind of an enclave," says Hanbury. "Our president wanted us to get rid of this perception and open our doors to the community." Hanbury says. So far, the community's response has been very positive. "We've had no opposition from our neighbors. They see it as a economic engine that also offers them a sense of inclusion."

The university also hopes the Village will attract more traditional undergraduate students. Predominantly catering to graduate and first professional students, the university currently has only 5,000 undergraduates. "We are not a traditional school in nature; we're an inverted pyramid. But there's room for us to grow our undergraduate population," he says. "Now, with the construction of the Village, is the perfect opportunity to do that. So if there's a demand, we can satisfy that," Hanbury says.

While many IHEs are just breaking ground on their multiuse facility, Old Dominion University (Va.) is already celebrating the second successful year of its $54 million Ted Constant Convocation Center. Completed in October 2002, the center, which hosts concerts, athletic events, and trade shows, was paid for by the university thanks to a healthy reserve of auxiliary funds and student fees. "It's a facility that serves as a recreational and cultural hub for the entire community. In essence it's a community building project," says Bob Hassmiller, executive director for the National Association of College Auxiliary Services (NACAS).

Past performers have included comedian Chris Rock, newscaster Tom Brokaw, the Harlem Globetrotters, and Sesame Street Live. Its popularity is evidenced by the 109 events that it hosted last year and the 406,000 people who attended them. Forty seven-percent of those attendees came for basketball events, 13 percent for concerts, 14 percent for family shows, and 26 percent for non-ticketed trade shows or major banquets.

Still, the center has yet to make a profit. "It's a break even operation so far, but the goal is eventually to make a profit," says Don Runyon, assistant vice president of auxiliary services at ODU. While Runyon does expect to make a slight profit this year, he says the center is fulfilling other non-financially driven goals.

"Our primary goal was to give us a real legitimate on-campus venue where we could hold events and showcase both the campus and events to the community." Before, the center was a clunky 5,000-seat Field House with an old fashioned gym. Runyon says that students and the local community have embraced the center. In fact, about one third of the center's employees are students. "They're really proud of the center and excited to show it off. They are our best ambassadors," he says.

While there have been some grumbles from neighbors about parking and noise, the center is a hit with the community. "People who have lived here for 20 years and have never been to the school are coming," he says. And students, who before might not have looked twice at ODU, are applying. Enrollment has increased four to five percent each year since the center's completion, Runyon says.

Multiuse facilities are truly enhancing town and gown relationships nationwide. These facilities are improving community relations, boosting enrollment, and making money in the process. Building a massive multiuse facility is a major undertaking, but many schools would say it's worth the investment. "Instead of drawing money away from tuition and fees, schools are becoming entrepreneurial," says David Rood, director of media services for NACAS. "They're spending more to create more for their students."

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