Campus Partners, The Ohio State University. An Exercise in Enlightened Self Interest

Transcription

1 Campus Partners, The Ohio State University An Exercise in Enlightened Self Interest

2 OSU- Setting & Context Nation s largest land grant institution/urban campus 52,000 student-columbus campus 10,000 students in dorms 13,000 student in University Neighborhoods East Campus- historic entrance, diverse urban neighborhood fabric. Access to I-71 through troubled neighborhood. West Campus-focus of expansion; affluent suburban neighbors. Increasingly identified as campus entrance.

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4 Policy Foundation Dr. Gordon Gee, OSU Pres. & Chair Kellogg Commission, NASULGC an engaged university must puts its critical resources to work on the problems the communities it serves face Institutional image Enlightened self interest Heritage of public service 1996 Finding: Prospective students & their parents, especially high-ability students, are deciding not to attend Ohio State due to a setting that is perceived as disintegrating & unsafe

5 Campus Partner s History Founded 1995 by Dr. Gordon Gee w. support of Columbus Mayor Lushutka Planning, collaboration and small-bore programming through 1999 Campus Collaborative essential to academic support Campus Partners key element: OSU Academic Plan

6 Business Plan Transformation New Leadership (Terry Foegler, President/CEO) Refocus on transformational initiatives Rationalize business strategy Focus on role as catalyst Build internal mgt/fin l capacity, incl $30m capital Bold development concept, nexus of campus and neighborhood (South Campus Gateway)

7 Campus Partners Org l Capacity 501(c)3 corp. & Ohio 1728 corporation 11 Member Board 6 appointed by OSU 5 at large (resident/student/city) City member (Dir. of Dev.) key link Staffed by University employees Originally included two OSU Trustees

8 Campus Partners Org l Structure Campus Partners Board of Directors OSU Oversight Committee President & Chief Executive Officer Campus Collaborative Dir., Community Relations Senior Vice President, Real Estate & Community Development Business Manager Project Manager(s)

9 Business Plan-Mission Bold vision-university neighborhoods as diverse, enriched, sustainable city within a city Transformational strategies bold, inclusive, multidimensional rooted in market discipline First and foremost catalyst; avoid redundancy Expand stakeholder base Influence long term quality & character of real estate through site assemblage/redevelopment Become financially self sustaining over time

10 Market for Revitalization Opportunities 110k people live/work/learn 3.5m visitors $400m buying power Research & medical facilities OSU as economic base; strong political leadership Strengthening market to South (to CBD) and North Challenges 60% students/95%faculty live beyond OSU neighborhoods 80% retail leakage Transitory residents: 12% homeownership + students Low quality resid l/retail dev Concentrated poverty & crime in EZ neighborhood

11 Business Strategy Phase 1 South Campus Gateway spur High St. revitalization Reconstruct 11th Ave: Signature Street, I-71 to campus Improve Housing Student Core (north of 11th Ave) Revitalize Weinland Park (south of 11th Ave.) Extend OSU engagement as employer, teacher, researcher and learner

12 South Campus Gateway Objectives Anchor nexus of Campus, Student Core & Empowerment Zone neighborhoods Provide high quality goods, services & employment; revitalize High St. as Main Street Illustrate economic viability-high quality development Provide safe, well managed entertainment center as alternative to off campus keg parties Establish new gateway to OSU campus

13 South Campus Gateway Center 500,000+ sq. ft mixed use center, including: 225,000 sq. ft. retail Barnes & Noble anchor Cinema/bars/rest. anchor young urban lifestyle center Specialty grocer 88,000 sq. ft office 184 apartments (graduate school) 1,200 space garage

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26 Sources of Funding Gateway OSU patient capital OSU tax exempt bonds New Markets Tax Credits ($47m) Tax Increment Financing (garage) State/City infrastructure grants ($13.5m)

27 Lessons Learned: Gateway Untested market requires leadership & patient capital Conflict: developer & institutional interests Retail development requires critical mass Student shopping patterns pose unique challenge for comparison goods retailers Extraordinary transactional & asset mgt complexity Need to balance institutional accountability & entrepreneurial decision making

28 Next Step: Weinland Park Eliminate barriers to reinvestment: Crime Unsustainable concentrations of poverty Unethical asset mgt practice Redevelop distressed Sec. 8 portfolio (Broad St) Expand engagement in neighborhood education & childhood development Improve crime prevention & security

29 Broad St. Portfolio: A Profile 1,939 unit scattered site Section 8 rental 300+ bldg., 4 cities, 3 states (OH/KY/GA). 17 owners (LP s), 300+ limited partners HAP agreements expire, All properties secured by HUD insured mortgages 41% Ohio units in OSU University neighborhoods

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31 Broad St Portfolio (CPO) 5% 21% 10% 4% 8% 11% 41% Wein/Harr W/Univ Mt Vernon/Long Franklin Pk Old Town East Franklinton South of Main Livingston South

32 Broad Street Resident Profile Broad Street as housing of last resort: Median income approx. $5-7k 948 households headed by single female, age 19-24, w. children!! Median contribution to rent <$100/mo. <10% residents could afford LIHTC unit 85-90%+ annual turnover in local schools

33 Broad Street Goals/Values Revitalize without involuntary displacement Preserve/relocate contract authority to deconcentrate poverty Improve substandard living conditions Invest significant $ in resident services & security

34 Broad Street Accomplishments Campus Partners Acq. Mgt Co.+17 GP s Negotiated mortgage restructuring (HUD) Five Congressional earmarks: res. services, security, income mix Conveyed to OCCH Ohio Capital (OCCH) Raised $100m+ for redevelopment Closed & implemented on restructuring plan Implement nationally recognized resident empowerment plan

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37 Weinland Park Education Foundation for Lasting Renewal New construction- Schoenbaum Family Center Redevelopment- Weinland Park Elementary School & Park Pending, Weinland Park workforce development strategy

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40 Brownfield Redevelopment: CCF 20 acre Brownfield site in Bankruptcy Court Spans eastern edge Weinland Park- 5 th -11th Ave CP acquired site control, worked w City to secure demolition & remediation funds Transfer site control to City Subsequent transfer to private developer for units workforce development

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43 Campus Partners The Future Phase 2 Business Plan under Review Tentative approval-$50m additional OSU capital for site assemblage & development Operating support continues, pending generation of fee revenue Foundations offer to supplement capital for comprehensive community development

44 Campus Partners, Next Generation High Street Revitalization East Campus Gateway (15th & High) Kroger Redevelopment (7th & High) Expanding South Campus Gateway Weinland Park Columbus Coated Fabrics Reuse (500+ units) Response to Sub-Prime Lending crisis Workforce, Resident leadership, crime prevention 11th Avenue Redevelopment/Student Housing?

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46 Campus Partners Future Challenges Replacing Key Staff/Management Retaining connections to OSU Leadership Balancing bold impact w. fiscal limits Moving to financial self sufficiency Achieving critical mass/influencing market

47 Lessons Learned Focus on long term, comprehensive initiatives Invest in community based planning; avoid analysis paralysis Implement transformational projects, achieve tipping point, allow market to perform. Be resolute on vision, flexible on role Invest in highest quality board/staff leadership High public purpose goals require patient capital.

48 Indices of Success Improved OSU image, peers, neighbors & students; improved entrance Leveraged investments in student housing core Leveraged investment by key retailer (Kroger) OSU Trustee approval of add l $50m investment Significant support by local RE community

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