The idea for Mississippi State University’s upcoming $67 million apartment-style student housing began on the golf course.
“I was playing golf with the president of University of Kentucky, Eli Capilouto, and they were having issues not unlike what we were having in Mississippi with concerns about needing to upgrade their facilities — particularly their housing facilities,” said Mark Keenum, president of MSU, during a finance committee meeting for the State Institutions of Higher Learning.
The University of Kentucky, Keenum said, was also running into problems with being able to issue bonds to build new residences.
Instead, they brought in a private developer to build a hybrid facility that combines apartment-style housing, retail and restaurants in one facility on campus.
“I was fascinated by it to the point where when I got back to campus I asked our provost at the time and others to send a delegation up to University of Kentucky just to see what all they’re doing up there,” Keenum said.
Because of a provision in state code, public universities do not have to go through an open bidding process when leasing to private companies in a public-private partnership.
In this case, the $67 million project went to Education Realty Trust (EdR), a Memphis-based company specializing in university housing management and development. The company has ties to MSU, with its chief accounting officer having graduated from the university.
Last week, the IHL board approved the agreement between MSU and EDR, making it the first time that a university within the IHL system has utilized a public-private partnership to build a hybrid on campus residence facility.
During the financial committee IHL meeting, this arrangement was hailed as what future arrangements on Mississippi campuses could look like.
“This should be the gold standard and I hope if anybody else does it, [they do] it this well,” said IHL board member Alan Perry.
Don Zant, vice president for finance and chief financial officer at MSU said that going through EDR cost the university about 15 percent less than what it would have cost for the university to construct it.
“So a $67 million dollar project (would) be about a $79 (million) — $80 million project. And the whole point of this process is to avoid this hitting our equity. We do not want to bond this. That’s the reason we went through this process,” Zant said during the finance committee meeting.
The development will go on an empty 35-acre lot, where Aiken Village apartments were located before they fell into disrepair.
It will include 656 residential beds (each coming with its own room and bathroom), 46,000 square feet of retail, restaurants, an outdoor entertainment zone, a daycare center and recreational amenities.
Freshmen will not be allowed to live in this facility, Keenum said.
“We’re seeing more and more of our upperclassmen are wanting to live on the campus, and we’re not able to accommodate them and their needs,” Keenum said. “We just think this will be a real transformational addition to us.”
MSU spokespeople have not said whether the facility is technically classified as a residence hall, but it will have resident assistants and a community director located on site.
“We worked out with our developer, our partner, that all of the student life activities will still be under the authority of Mississippi State University. So a student would have the benefits of apartment life but also, from a parent standpoint, under the direction and oversight directly of the university,” Keenum said.
The university will lease the land to EDR for 40 years with a 10 year option to renew at the end, so the total lease could be up to 50 years, said John Pearce, associate commissioner for finance and administration for IHL. EDR will set the rates for the facility while MSU will receive five percent of all gross revenue.