Gary Paetau, AIA, is senior vice president of development and leader of the Education Group at Carter, a leading full-service real estate firm, headquartered in Atlanta. He specializes in program and project management services as the owner's representative for educational institutions. Since joining Carter in 1993, he has been involved in the development of more than five million sf of educational facilities worth more than $1 billion. He holds a BS in architecture from the University of Illinois at Urbana-Champaign.
BD+C: How are universities coping with the recession?
Gary Paetau: Private institutions have seen significant impacts to their endowments, so they're starting to cut back significantly. For example, at Emory University, we were able to begin a housing project but other
projects are being reevaluated.
For publicly supported universities, the funding seems to be still pretty good. Georgia just passed its budget with $250 million in university construction projects. Most of the public institutions we work with are moving forward with some new projects, due to the state funding they're receiving.
BD+C: Your firm does a lot of public-private partnerships. How do these work?
GP: First, it has to be a revenue-producing project, where the university can charge fees—a parking garage, student housing, a recreation center. Typically, a 30-year bond is issued and a special-purpose LLC is set up by the institution's foundation. The LLC owns the project and receives "rent" from the institution. The rent is used to pay off the debt over 30 years, then the debt-free facility is gifted to the institution upon completion. At Valdosta State University in Georgia, we've helped them with public-private partnerships for a range of projects, including student housing, parking, healthcare facilities, and the student union. Most of these projects perform very well from a financial perspective.
BD+C: There's a lot of activity in student housing in urban campuses, isn't there?
GP: Very much so. Institutions want to provide housing on campus, to strengthen the community, keep students on campus on weekends, and develop more positive programs for students. University officials tell us that students are more attracted to schools with housing than just a commuter campus. At Augusta State, Abraham Baldwin Agricultural College, Georgia State, they're requesting student housing, and parents like the idea that there's a more secure alternative available.
BD+C: What about student involvement in projects?
GP: That varies from institution to institution. In most of the public-private venture projects, we've solicited student feedback.
Students make decisions about whether to go to an institution in large part based on the facilities. Take Agnes Scott College, a women's college in Decatur, Ga. Twelve years ago, they were struggling with enrollment numbers. With a well-defined strategic and master plan, they agreed to use a portion of their endowment for facilities—a library addition, a new campus center, renovation of dining hall, expansion of a planetarium, renovation of academic bldgs, $125 million of work. Since then, they have doubled in size and have been identified as one of the top 50 liberal arts colleges in the U.S.
BD+C: Are these new facilities too elaborate?
GP: We only have ourselves to blame for that! A lot of these kids had their own bedrooms at home, maybe a private bath, so their expectations are high. We do a lot of "4-2s," a four-bedroom, two-bath facility, and even some 2-2s, with private baths. They also have a common space living room with kitchen, and study areas on each floor, so the students interact more.
BD+C: What other issues are you seeing on campuses?
GP: Many schools are being forced to reduce their facilities staffs. As we design buildings, we have to be sensitive as to how many people are going to be needed to maintain the building. For example, with floor material, are they going to have to put a wax coat down every week, or can they just damp mop it?
BD+C: What about the greening of campuses?
GP: There's a movement toward more LEED-certified projects on campus, being led by students and administrators. Carter has been involved in more than 20 LEED projects, including a residence hall for Emory, where we are installing energy-use calculators on each floor, and there's competition between floors on lowering energy usage.
BD+C: What's in the future for university campuses?
GP: We feel there are opportunities along the edges of campuses. We're looking to develop properties, in partnership with universities or on our own, that can strengthen the institutions—hotels, office space, mixed use, even academic space. Georgia Tech did this with a major mixed-use development across the interstate from the main campus—a bookstore, the College of Management, a hotel, a conference center, and continuing education center—that has been very successful for Tech.