The Texas A&M University System added a $360 million student housing project to a growing list of public-private partnerships Thursday with the unveiling of the 3,400-bed Park West development.
By leaving it up to private developers to foot the bill for constructing and managing the project, university and system officials said during the announcement at Rudder Tower that Park West, which will be ready for move-in by the 2017 fall semester, is projected to generate $600 million in revenue over the next 30 years to re-invest in the flagship school's academic and research missions. Texas A&M President Michael Young said Park West's location on a 55-acre plot between George Bush Drive, Penberthy Road, Luther Street and Marion Pugh Drive will enhance the student experience.
"As we see the university grow, as we see it become more of a destination school, the capacity to get our kids on campus creates that wonderful sense of community that's so important to see them grow intellectually and develop their skills and go out into the world and do the things that Aggies have been doing for well over 100 years is very important," Young said. "This project has very serious implications in that regard."
Park West is the system's fifth and largest public-private development, joining the White Creek Apartments, U Centre at Northgate, Easterwood Airport and Century Square projects. Officials said the five together could generate nearly $1 billion over each project's lifetime, with Park West accounting for most of that revenue.
The system is able to pursue the Park West development through a combination of nonprofit and public agreements. The 55 acres, which Vice Chancellor for Business Affairs Phillip Ray says will always belong to the system, will be ground-leased for 30 years to National Campus and Community Development-College Station (NCCD), a 501(c)(3) nonprofit organization.
NCCD will then partner with Irving-based Servitas to develop the property as well as manage it. Bonds to pay for construction were issued by New Hope Cultural Educational Facilities Finance Corp. and taken to market by Raymond James Financial.
NCCD will pay $18.5 million to the university up front as well as a projected $20 million share of revenues annually through the duration of the lease. Once the lease has expired in 2047, facilities will revert back to the system. Texas A&M Utilities will cover infrastructure costs, Ray said, at no cost to the city of College Station.
Sharp said the Park West project might have been an important selling point when A&M recruited Young from the University of Washington earlier this year because it would give him the money he needs to pursue his goals for the flagship campus.
"As he develops his strategic plan for the university, with the $18.5 million that was just deposited in our account last week and with partners like this, it adds a dimension to this university's future that, quite frankly, doesn't exist for a lot of universities," Sharp said. "We think that we have the right mechanism to put into the right hands to really do some great things for the university."
Construction on Park West is set to begin next month and will take up 48 acres of the 55-acre plot. The remaining seven acres is expected to become retail space in the future. Ray said the entrance of Park West will come off of George Bush Drive and there are no plans to demolish the Louis Pearce Pavilion, but eventually the facility could be converted into a campus information center.
Matt Myllykangas, vice president for development for Servitas, said monthly rent at one of the spaces in Park West, which includes a variety of studio, apartment and garden-style units, will run between $600 and $1,000 with one- to four-bedroom options.
The development layout consists of one eight-story, number 8-shaped complex with a rooftop pool that Myllykangas considers the "high-energy" area of the development with views of Kyle Field. Two five-story C-shaped complexes with swimming pools at each center will serve as quieter lounge areas. Two rows of three-story town homes will line the east and west sides of the development.
Michael Short, chief operating officer of Servitas said the complex should not have trouble attracting students, especially with enrollment growth averaging 1,331 more students on average annually since 2005.
"We get to turn a pasture into a vibrant community that Aggies can enjoy for years to come, and we couldn't be more excited to get started," Short said.
Bonds to pay for construction: https://www.moodys.com/research/Moodys-assigns-Baa3-to-356M-New-Hope-Cultural-Education-Fac--PR_328972