The campus is partnering with the UC Office of the President to develop the project under the systemwide Public Private Partnership (P3) initiative. The method of the P3 project delivery UC Santa Cruz has chosen will allow the university to maintain a high level of influence on the student experience. It will also allow the university to receive maximum financial benefits while at the same time reducing the project risk and financial exposure. The chart to the right helps illustrate the challenges and benefits of each approach.
After a lengthy 6-month solicitation and interview process, we have chosen Capstone Development Partners (CDP), a proven developer focused exclusively on ‘on-campus university development’. Capstone understands and is sensitive to the project goals, history, culture and environment. Capstone is working closely and collaboratively with Collegiate Housing Foundation (CHF), our not-for-profit (NFP) partner selected by the Office of the President.
Proposed courtyard and walkways within Family Student Housing units at the Hagar site
We plan to permanently finance SHW with tax-exempt bonds issued on behalf of Collegiate Housing Foundation, which is an independent not-for-profit entity (501c3).
This is a financing structure already proven successful within the UC System. Through a ground lease between the UC Board of Regents and CHF, CHF will own, construct, manage and maintain any improvements, utilizing only rent revenue collected by UC Santa Cruz from student residents to fund project operations and pay debt service. CHF will contract directly with Capstone Development Partners, LLC and Capstone Management Partners, LLC (CMP) for the development and facilities maintenance / management of the project.
Tax-exempt bond financing offers a low cost of capital and thus the opportunity to achieve affordable per-bed rents in the long-term, and allows the university to have a greater voice in the setting of rental rates than would be possible in a privately financed (developer-owned and financed) project.
Proposed view from Heller Street heading towards Empire Grade