The University As Urban Developer: Case Studies and Analysis : Case Studies and Analysis 9781317454106, 9780765615411

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The University as Urban Developer

Cities and Contemporary Society SeriesEditors: Richard D. Bingham and Larry C. Ledebur, ClevelandStateUniversity Sponsoredby the Maxine GoodmanLevin College of Urban Mfairs ClevelandStateUniversity This new seriesfocuseson key topics and emergingtrends in urban policy. Eachvolume is specially preparedfor academicuse, as well as for specialistsin the field. SUBURBAN SPRAWL Private Decisionsand Public Policy

Wim WiewelandjosephJ Persky,Editors

THE INFRASTRUCTURE OF PLAY Building the Tourist City DennisR. judd, Editor THE ADAPTED CITY Institutional Dynamicsand StructuralChange H. GeorgeFrederickson,Gary A. johnson, and Curtis H. Wood CREDIT TO THE COMMUNITY CommunityReinvestmentand Fair Lending Policy in the United States Dan Immergluck

PARTNERSHIPS FOR SMART GROWTH University-CommunityCollaborationfor BetterPublic Places Wim Wieweland Gerrit-jan Knaap, Editors

REVITAlJZING THE CITY Strategiesto ContainSprawl and Revive the Core Fritz W. Wagner, TimothyE. joder, AnthonyJ Mumphrey,jr., Krishna M. Akundi, and Alan FJ. Artibise THE UNIVERSITY AS URBAN DEVELOPER CaseStudiesandAnalysis David C. Perry and Wim Wiewel

The University as Urban Developer Case Studies and Analysis

David C. Perry and Wim Wiewel editors

LINCOLN INSTITUTE OF

LAND

POLICY

Cambridge,Massachusetts

ROUTLEDGE

Routledge Taylor & Francis Group

LONDON AND NEW YORK

First published2005 by M.E. Sharpe Published2015 by Routledge 2 Park Square,Milton Park, Abingdon, Oxon OXl4 4RN 711 Third Avenue,New York, NY 10017,USA. Routledgeis an imprint ofthe Taylor & Francis Group, an informa business

Copyright © 2005 Taylor & Francis.All rights reserved. No part of this book may be reprintedor reproducedor utilised in any form or by any electronic,mechanical,or othermeans,now known or hereafterinvented,including photocopyingand recording,or in any information storageor retrieval system,without permissionin writing from the publishers. Notices No responsibilityis assumedby the publisherfor any injury and/ordamageto personsor propertyas a matterof productsliability, negligenceor otherwise, or from any use of operationof any methods,products,instructionsor ideas containedin the materialherein. Practitionersand researchersmust always rely on their own experienceand knowledgein evaluatingandusing any information, methods,compounds,or experimentsdescribedherein. In using suchinformationor methodsthey should be mindful of their own safetyandthe safetyof others,including partiesfor whom they have a professionalresponsibility. Productor corporatenamesmay be trademarksor registeredtrademarks,and are usedonly for identification and explanationwithout intent to infringe.

Library of CongressCataloging-in-Publication Data The university as urban developer:casestudiesand analysis/ edited by David C. Perry and WimWiewel. p. cm. - (Cities and contemporarysociety) Includes bibliographicalreferencesand index. ISBN 0-7656-1541-X(cloth: alk. paper) studies. 2. Urban universitiesand I. Community and college-UnitedStates-Case colleges-Environmentalaspects-UnitedStates-Case studies. 3. Community development, Urban-UnitedStates-Case studies. 4. Real estatedevelopment-UnitedStatesCasestudies. 1. Perry, David C. II. Wiewel, Wim. III. Series. LC238.U5462005 378.1'03-dc22

2004026589

ISBN l3: 9780765616418(pbk) ISBN l3: 9780765615411(hbk)

Contents

List of Tables,Figures,and Maps Foreword RosalindGreenstein Preface

ix xi Xlll

PartI Introduction 1. From Campusto City: The University as Developer David C. Perry and Wim Wiewel

3

Part II The Campus and the City: Neighborhood, Downtown,and Citywide Development Section 1. The Campusand Its Neighborhood 2. The University of Pittsburghand the OaklandNeighborhood: From Conflict to Cooperation,or How the 800-Pound Gorilla Learnedto Sit with-and not on-Its Neighbors SabinaDeitrick and Tracy Soska 3.

ColumbiaUniversity's Heights: An Ivory Tower and Its Communities PeterMarcuseand Cuz Potter

4. The University of Chicagoand Its Neighbors: A CaseStudy in CommunityDevelopment Henry S. Webber

25

45

65 v

vi

CONTENTS

Section2. The University and the CentralCity 5. The Urban University as a Vehicle for Inner-City Renewal: The University of Washington,Tacoma Brian Coffeyand Yonn Dierwechter

80

6. Auraria Higher EducationCenterand DenverInner-City Development RobertKronewitter

98

7. The Political StrategiesBehind University-Based Development:Two PhiladelphiaCases ElizabethStrom

116

Section3. The University as a Collaboratorin Urban Development 8. The University as an Enginefor Downtown Renewalin Atlanta LawrenceR. Kelley and Carl V Patton

131

9. University Involvementin Downtown Revitalization: ManagingPolitical and FinancialRisks Scott Cummings,Mark Rosentraub, Mary Domahidy,and Sarah Coffin

147

10. RyersonUniversity andToronto'sDundasSquare Metropolis Project David Amborski

175

Part III University DevelopmentPractices: Acquisition, Finance, Development, and the Deal 11. An Overview of University Real EstateInvestmentPractices Ziona Austrian and Jill S. Norton

193

12. Leasingfor Profit and Control: The Caseof Victoria University at the University of Toronto Larry R. Kurtz

m

13. The Little Fish Swallows the Big Fish: Financingthe DePaulCenterin Chicago KennethMcHugh

238

CONTENTS

vii

14. No SuchThing as VacantLand: NortheasternUniversity and DavenportCommons Allegra Calder, Gabriel Grant, and Holly Hart Muson

253

15. CampusPartnersand The Ohio StateUniversity: A CaseStudy in EnlightenedSelf-Interest David Dixon and PeterJ. Roche

268

Part IV LessonsLearned 16. Private Choicesand Public Obligations:The Ethics of University Real EstateDevelopment RachelWeber, Nik Theodore,and CharlesHoch

285

17. Ivory Towers No More: AcademicBricks and Sticks Wim Wieweland David C. Perry

300

About the Editors and Contributors About the Lincoln Institute of Land Policy Index

317 321 323

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List of Tables, Figures, and Maps

Tables

2.1 PlanningGroupsin the 1990s 2.2 University of Pittsburghand OaklandCommunityPlans in the 1990s 5.1 Spendingaroundthe University of Washington,Tacoma Campus,2002 9.1 Sourcesof Fundsfor SelectedDowntown IndianapolisEconomic Development Projects 9.2 University of Louisville DevelopmentProjects: BelknapCampusand Health SciencesCampus 9.3 Investmentsin the CentralCorridor of St. Louis by SaintLouis University, WashingtonUniversity, and Other Investors 10.1 Metropolis TheatreProject,Toronto 10.2 RyersonUniversity Benefits,July 1997 11.1 CaseStudiesin University Real EstateInvestmentPractices 13.1 SummaryStatusofthe DePaulCenter,1989

36 37 88 154 162

169 183 184 195 251

Figures

3.1 The AudubonBallroom, c. 1985 3.2 AudubonBallroom and Mary WoodwardLasker Medical ResearchBuilding, April 2002 5.1 Tacoma,Washington,and the University of Washington, TacomaCampus 5.2 University of Washington,TacomaandAdjacent Developments,1990-2002

54 55 83 85 ix

x

LIST OF TABLES, FIGURES, AND MAPS

5.3 LeadershipPerceptions,University of Washington,Tacoma, and CentralCity Development 5.4 Downtown versusthe Neighborhoods,Tacoma 6.1 North ClassroomWork Session 6.2 Auraria Parkway,Denver 6.3 Ninth StreetPark Sketch,Denver 11.1 Analytical Framework

90 94 102 108 110 197

Maps 2.1 OaklandNeighborhoodand Major University of Pittsburgh Real EstateProjects 3.1 ColumbiaUniversity and SelectedAffiliates' Properties in NorthernManhattan 4.1 The University of Chicagoand Its Neighbors 6.1 Auraria Higher EducationCenterCampusPlan, 1995 6.2 SpeerBoulevardBisectsthe Auraria Campus 7.1 TempleUniversity Main Campus 7.2 University of PennsylvaniaCampus 8.1 GeorgiaStateUniversity Campus 9.1 Indianapolis-IndianaUniversity-PurdueUniversity at Indianapolisand the IndianaUniversity Schoolof Medicine 9.2 Louisville 9.3 St. Louis CentralCorridor 10.1 RyersonCampus 10.2 DundasSquare 12.1 Victoria University 13.1 DePaulUniversity 14.1 Northeastern'sCampus 15.1 Ohio StateUniversity District

28 46 67 107 109 117 118 132 152 158 166 176 179 223 239 255 269

Foreword

Factorieshave left the cities. Regional departmentstoreshave been replaced by national chains. Local banks have been bought by regional banksthat have, in turn, beenboughtby nationalbanks.The suburbsare growing faster than the cities and are increasingtheir political clout. Urban universities,however,rarely abandontheir cities. Thus it is no wonder that thoseof us interestedin the developmentand redevelopmentof our nation's cities are very interestedin the real estateactivities of colleges and universities. Universities, whether they are public or private, internationally acclaimed researchinstitutions or the primary training grounds for the metropolitan area, face a complicatedset of constraintsand expectations. Universities serve the public (e.g., by training teachersor brain surgeons,or informing the views of future citizens,or creatingand passing on our culture) and yet they can also put a strain on city services and the goodwill of their immediateneighbors.Can they do whatever they want? Must they always constraintheir actions to meet the wants of thoseon their doorstep?Can we legitimate their presencein the city only if we can put a dollar value on every contribution?Thesequestions are meant to illustrate some of the competingdemandsthat the nation puts on its universities. The casespresentedin this volume are a part of a larger set of activities in The City, Land andThe University Programat the Lincoln Institute. As a whole theseactivities are viewing land developmentfrom 360 degrees.We are interestedin the university'sexpansionbeyondits borders, and we want to understandthat actionwithin the contextof the university's missionand culture. In addition we areinterestedin the immediateneighbors, their dreamsfor their neighborhood,and how they might coexist with a more powerful institutional neighbor.And we are interestedin the ways that city governmentcan articulatea developmentpath that requires contributionsfrom and delivers benefitsto all the city's residents. xi

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FOREWORD

The intellectual leadershipfor this project came from two friends and colleagues,David Perry andWim Wiewel. They areamongthe reasonsthat I am glad that knowledgeproductionis a social endeavor. RosalindGreenstein Cochairman,Departmentof Planningand Development Lincoln Institute of Land Policy Cambridge,Massachusetts

Preface

The University as Urban Developer: CaseStudiesandAnalysisis the product of a multiyear collaborativeproject of training, professionaldevelopment, and researchdesignedto contributeto our understandingof the role of the university in urbanreal estatedevelopment.Early on in the collaboration betweenthe editors and the Lincoln Institute of Land Policy, we learnedthat there is neither a rich professionalpedagogy,nor a core body of urban research,nor a well-developedprofessionalpracticefocusedon the real estate developmentpracticesof universitiesand the impactssuchpracticeshaveon the long-termdevelopmentof cities. One of the elementsof our approachhasbeenthe developmentof a Universitiesas DevelopersWorkshop,organizedas a joint project of the Great Cities Institute at the University of Illinois at Chicagoand the Lincoln Institute, basedin Cambridge,Massachusetts.The results of three such workshopswith top-leveluniversityland anddevelopmentofficers haveconfirmed the mixed stateof professionalandacademicunderstandingof urbanuniversity developmentpracticesand the substantialneedfor publishedwork in theseareas. Obviously anotherelementof our collaborationis this book. Universitybasedland developmentis clearly a significantelementof urbanformationcollegesand universitiesare becomingincreasinglyactive in acquiring and developingproperty, adding not only land and buildings but also commercial venturesto their assetbase. There are multiple strategies,goals, and forms of practice, as well as varied implications of such university activity for the institutions themselvesand for their communitiesand cities. We certainly hope we have addressedsome of theseconditions of university/city developmentin this book, addingto the availablelevels of professionalcommunication,development,and scholarly research.We also hope the studies includedherewill help scholarsand administratorsalike to registerand better understandthe significanceof the university presencein urban development and enhancethe stateof developmentpractice. xiii

xiv

PREFACE

Continuedactive attendanceat our national workshopshas shown that there is keen interest in the topic and a real need for organized,extended study. Participantshave arguedthat thereis no central sourceof knowledge on the subject.This book is our attemptto meet theseneeds.As such this collection servesto initiate an intellectual and professionalliterature. Such an undertakingis not an easy one, and we have,benefitedgreatly from the work and supportof our colleaguesat the GreatCities Institute and from our long-standingand deepcollaborationwith our colleaguesat the Lincoln Institute. To everyoneat both instituteswe are profoundly grateful. Most important,we want to acknowledgeour collaborationwith Rosalind Greensteinof the Lincoln Institute. Shehasbeenour intellectualpartnerand programofficer. With her we haveproducedan emerging workshopcurriculum as well as this book. The bookhas benefitedas well from the research supportof Lynn StevensandBarbaraSherryat the GreatCities Institute, and researchassistantsJohn O'Neil, Lynn Peemuller,Claire Gron, and Kristen Kepnick. We learnedmuch from the advice and feedbackof Scott Levitan, Alice Boyer, Henry Webber, Elizabeth Sisam, Thomas Lussenhop,Alicia Berg, and David Dixon. The assistanceof Allegra Calder, RajeshPradhan, and Lisa Cloutier at the Lincoln Institute was very importantto the project, andthe editorial assistanceof Ann LeRoyer,also at the Lincoln Institute,has made the book far better. We are extremely grateful for the guidanceand support of Richard Bingham and especiallyof our editor at M.E. Sharpe, Harry Briggs. David also wants to thank Judith Kossy, who has beensupportiveof the efforts of time, distance,and distraction that combine to make family life while working on such an enterprisefar less interestingthan it should be. Wim thanksthe GeorgetownUniversity Library, which graciouslyprovided spacewhile he was writing the final chapter;and most of all Alice Boyer whoseinvolvementin this project hasbeenlife-changing. David C. Perry GreatCities Institute University of Illinois at Chicago

WimWiewel University of Baltimore

Part I Introduction

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1 From Campus to City The University as Developer Davjd C. Perry and Wjm WjeweJ

"Higher education,including the researchcomplex. .. has becomethe mostcritical singlefeature of modemsociety."

-Talcott Parsons,as quotedin StefanMuthesius, The Postwar University: Utopianist Campusand College, 2000 The University, Its Mission, and the City Few would quarrel with the value of the university to society, and many would evenjoin Talcott Parsonsin his claim of the singular social importanceof institutionsof highereducation.The universityhaslong beenone of Westerncivilization's key institutions.Along with local government,the firm, and the church, among others, universities contribute in multiple ways to modernurbansociety(Van der Wusten1998).The university is a significant sourceof receivedknowledgeor wisdom, the primary site for the debate over changein the intellectualorder, and an incubatorof revolutionsin scienceand technology.Justas important,the university is considereda center of culture, aestheticdirection, and the moral forces shapingthe "civilized" society.Universitiesalsocontributein importantwaysto the economichealth and physicallandscapeof cities, servingas all but permanentfixtures of the urbaneconomyand built environment. Suchcontributionsto social formation, however,havenot left the university in an unambiguousposition relative to its urban environment.Almost from the beginning,the relationshipbetweenthe university andits surroundings has been as conflictive as it has beenimportant-capturedmost commonly in the timeworn phraseof "town-gown" relations. In part this is understandable,since the university as a site of knowledgehas often seen 3

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itself as somethingof an enclave,removedenoughfrom the immediacyand demandsof modemlife to producetheknowledgeandinformationwith which to better understandsociety and the scienceand technical inventions that ultimately transformit. For somethis meantthat the purposeof the modem researchuniversity was to createa communityof scholarsremovedfrom the "turmoil" of the city and free "from the distractionsof modemcivilization" (Graham1898,asquotedin Bender1998, 18). For othersthis meantan unresponsive,disconnected,and alienatedinstitution with a decidedlyantiurban bias. Especiallyin the United States,therehasbeenan impulseto build campus environments(evenin cities) with "an affinity with the purified, safeand calm life of the suburbs"(Bender1998, 18). This impulse has beentemperedin return by a new, more modem, and equally historically groundedtradition that views the university in quite different terms: as a productof its relationshipwith the city and its urban surroundings,with a strongbelief "in a university of, not simply in, the city. But that does not imply that it ought to be or can be the samething as a city" (Bender1998, 18). This call for a clarified understandingof the "university of the city" takeson a host of meanings.In a very real way the fundamental intellectual mission of the university cannotbe understoodoutsideits context. To subscribeto the view that the universityis purely an "ivory tower" or "wholly self-contained"is bothwrong andunrealisticbecausethe lion's share of the truth a university seeksto transmit, the knowledgeit concernsitself with, is not of its making. It comesfrom outsidethe campus-fromother institutionsandotherscholars.Eventhe knowledgeproducedby a university's scholarsis "not for their contemplationexclusively.... What is essentialin a university-knowledge-must be drawnfrom andofferedto students,teachers and investigatorsin otherpartsof the world. Intellectually, no university can be wholly self-contained"(Shils 1988, 210). At the sametime, while the prevailing model of university development hashistorically beenthe pastoralcampus,university land developmentcannot be conductedin a "wholly self-contained"way anymorethan the educational missioncan.The urbanuniversity is an urbaninstitution-notonly in termsof the transmissionof knowledge,but in many otherways as well. The "university of the city" (Bender 1998; Cisneros1995) with a "land grant mission" (McDowell 2001; Crooks 1982) serving as an "engaged"institution (Kellogg Commission 1999; Harkavy and Puckett 1994; Maurrasse 2001) with "urbangoals" (Klotsche1966;Nash 1973;U.S. CongressHouse Committeeon Banking, Financeand Urban Affairs 1992; U.S. Congress HouseCommitteeon Educationand Labor 1977; Grobman1988) is a recurring themeof academicleadershipand literature, especiallyin the late twentieth century.

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER

5

This searchfor knowledge(and engagement),the productionof knowledge, and the training of society occurs in large, complex, physically expanding, and economically important environments.The researchgroup Initiative for a CompetitiveInner City (ICIC) reportsthat in 1996therewere well over 1,900 universitiesand collegesin the core of U.S. cities (2002, 7), and their combinedbudgetscomprisedmore than 68 percentof the more than$200billion spentannuallyby universitiesnationwide(NCES 2002, ch. 3,3). The total in 1999-2000constantdollars was $216.3billion. Put another way, as of 1996 urbanuniversitieswere spendingabout $136 billion on salaries, goods,and services,which is more than nine times what the federalgovernmentspendsin cities on job and economicdevelopment(ICIC 2002, 7). Universitiesconsistentlyrank amongthe top employersin metropolitanareas and,in somecases,they are a city's top employer.Universitiesalso areamong the largestand most permanentsourcesof land and building ownershipin the city~indeedlargest it is estimatedthat, using original purchaseprice as a referent, urbancollegesanduniversitiesat presentown over $100billion in fixed assets (currentmarketvalue would be severaltimes higher) (ICIC 2002, 8). While the overall impact of universitieson regional developmentis becoming betterunderstood,their impact on central cities "remainsrelatively unexplored"(ICIC 2002, 6) andthe role of the universityin real estatedevelopmentis equallyunderexplored(Pinck 1993; ICIC 2002;VerMeulen 1980; Wolfe 1986). Nowhereis the complex,often conflicted natureof the university as an urbaninstitution more evident than in its real estatedevelopment practices.The claims of campusdevelopmentand expansionare often practiced as, or at least perceivedto be, decisionsmadein relative institutional isolation,mirroring the pastoraltraditionsof campusandivory tower (Bender 1988; Muthesius2000; Dober 1991, 2000). University developersacquire land and build structuresthat contributeto a campus,responsiveto the core mission or the demandsof the "ways of knowledge," the disciplines, the sciences,and the new modesof discoverythey requireand the technologies they fuel (McDowell 2001). Universities find their main constituenciesin their faculty, their students,and increasinglytheir alumni and donors.Their first developmentresponsesare thosethat meet the requirementssuch constituentshave for the campus-whatattractsgood studentsand faculty and retainsthem and what donorswill support(Dober 2000; Webber,chapter4 in this volume). Against such internal logic of developmentis an equally evidentexternal logic. Becauseuniversitiesare amongthe largestlandownersand employers in cities, as well as major consumersof private goods and public services, they have a host of external constituents.Both indirectly, in light of the institution'seducationalmission,but quite directly anddramatically,in terms

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of the university's physical location, economicrelations, and political demands,theseconstituenciesoften asserteverybit the samelevel of claimson the university as they do on the firm, the church, or public agenciesin the city. Thereforethe role of the urban university is an importantand complex one-mixingthe institutional demandsof both academyand city. The political, economic,intellectual, and ethical elementsthat make up the challengesand opportunitiesof real estatedevelopmentcompriseone of the university'smostimportantareasof institutionalpractice.This bookserves as an initial explorationof such practice,offering a rich array of casesthat provide an opportunity to understandsignificant elementsof university administration, finance, communityrelations,and development,and also contribute to our understandingof urbaninstitutions more generally,placing an emphasison the undeniable importance of the roles universitiesplay in the growth and developmentof the city. To write the cases,we have assembled scholars,academicleaders,universitydevelopmentexperts,practitioners,real estatedevelopmentspecialists,and community leaderswho usetheir varied experienceand scholarshipto describea host of university practices,community responses,and policy initiatives that comprisemuch of contemporary university real estatedevelopment.Taken togethertheir approachhere is both contextualand evaluative,serving as one of the first efforts to treat university real estatedevelopmentas "a new area of academicas well as appliedinquiry" (Wiewel and Perry, chapter17 in this volume). The book setsout to contributeto this new areaof academicand professional study in four ways. First, we seek to add to the general academic conversationon the placeof the universityin the city, from the perspectiveof what motivatesthe university to enterthe urbanreal estatedevelopmentprocess.More precisely,doesthe particulareducationalmission of the university andits obligationsto students,faculty, andresearchers, andthe scholarship they seek, combineto require different or higher standardsof institutional proceduresand ethics in real estatedeals? Second,a major part of the book concentrateson how the university, through its land and building policies, embedsitself in (somecritics might say"ignores") the largerurbandevelopmentprocess.Put anotherway, university real estatedevelopmenthas come to be perceivedas an important part of the communitydevelopmentprocess.Thus a substantialpart of this book is committedto a discussionof the ways university real estatepractices engagesuch processesat key levels of urban spatial development, including the neighborhoodsthat surroundthe university, the development of the urbancore or downtownbusinessdistrict, and largercitywide developmentstrategiesof which university-cityreal estatecollaborationis meant to be a part.

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER 7

A third purposeof this collection is to drill more deeplyinto the practices of university real estatedevelopment,using as a startingpoint the particular issuesof real estateacquisition and developmentthat universities face as they undertakedifferent types of land and building deals.The chapterswritof ten to addressthesetopics are meantto provide fine-grainedassessments decisionmaking, financing, and communityrelationspractices.While each of thesesets of practicesis important, if there is a "first practice" among themit is finance,andthereforespecialattentionis paid to the differentmechanismsuniversitiesuseto fund their real estatetransactions. A fourth goal is to establisha critical or evaluativetradition within which to build a long-standingand reflective understandingof the university as developer.Thereforethe book closeswith chaptersthat set guidelines for institutional and practice-based evaluationof university real estatedevelopment. We usethe rich combinationof analysisand experiencedemonstrated by the contributorsto this collection to provide a synthesisof bestpractices and lessonslearned.The final chaptersare meantto be more than capstones to this collection. We hopethey will serveas an early assessment of a previously understudiedareaanda bridgeto future academicanalysisandprofessional understandingof universitiesas developers. The Campus and the City: Neighborhood, Downtown, and Citywide Development If thereis somesemblanceof academicandprofessionaltradition to be found in pastuniversity developmentpractices,it is most likely in the scholarship andpracticeof campusdesignandplanning.And if thereis a singleterm that seemsto capturethe logic of university developmentpractice, it was and remainsthe term "campus,"the Latin word for field. "Campusbecamecommon as an expressionfor an ensembleof buildings for higher education. Thus campusindicates primarily location. The term underlinesthe selfcontainedness of the institution and thus its separateness" (Muthesius2000, was derived from the perceived 24). The sourceof this self-containedness of natureof the intellectualmissionof the institution and the "separateness" the campusworking to ensurethe academic"community" or enclavein the serviceof that mission. HistorianThomasBendertakesthesenotionsof university as campusfurther. He suggeststhat in the all but universaladherenceto the developmental principle of the campus,Americanuniversities,eventhe urbanones,cameto embodythe tradition of "Anglo Americanpastoralism"-where the academic mission is carried out in and aroundthe "green" or the quad: a setting that links faculty andstudentsto their respectivedisciplinarybuildingsanddorms,

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but keepsthem unlinked and away from the city (Bender 1988). Thus the campusandits planning,arguesPaulTurner(1984),is the thoroughlyAmerican tradition of university architectureand design, albeit a decidedly antiurban one (as referencedby Bender1988). During the era of educationalreform following World War II, the tradition of campusplanningas the ideal form of university urbandevelopmentbecame somethingof a "science."Ironically what startedas essentiallya figment of American antiurbanismbecamethe paradigmfor postwar urban university development.Richard Dober, in his seminal 1963 book CampusPlanning, describeshow university campusesare built through "logical building increments," or academic,housing, or administrativeunits, laid out in large relatively flat settingsandof a scaleto facilitate pedestrian-auto linkage.Above all this new campus,arguesDober, must be "green-providingrelief from the communallife of the institution and removal from the stressof the general conditionsof modernsociety" (Dober 1963,as quotedin Muthesius2000,26). Writing more recently Dober (2000, xvi) continuesto describethe ideal landscapeof university developmentas a "greencarpetupon which buildings are placed,or ... articulatedas a device to extenda building designconcept into openspace,with a garnishfor an architecturalfeast."As suchthe campus greenremains,for university plannerslike Dober, a centralfeatureof university land development.It servesas a signatureelementin the strategiesto make collegesand universitiesbetterable to "attract and retain faculty and students, advanceeducationalprogram and researchprograms,energizefund-raising appeals... demonstrateenvironmentalconceptsand ethics... and strengthen the campusas a communitydesignasset"(Dober 2000, xviii). It follows, therefore,that university development,informed by suchideals, could easily exacerbatehistoric town-gown conflicts, often running at odds with the broaderurban and communitydevelopmentagendasof the city. This is certainlyborneout in the first severalchaptersof this collection,which show how the developmentrequirementsof the modernurbancampusare no longer servedby a developmentalcelebrationof traditional American pastoralism. The notion of campusis changingand the ways it is plannedand built reflect new needsof the communities-bothacademicand urban-thatstudy, work, or live in and otherwiseuseuniversity-ownedbuildings and land. There are many reasonsfor these changes.First, the campustradition, built as it has beenon a model of the university separatefrom its surroundings, createdthe potentialfor long-term,seriousconflict betweenthe university andits neighbors.It is not uncommonto hearcommunitiesangrily critique universitiesfor their imperious,unresponsivedevelopmentpolicies and intrusive real estateimpacts.Second,university capital requirementsincreasingly dictate that real estate developmentprojects be mixed-use in

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER 9

nature-blurringthe edgeof the old campusand the purposesof new buildings, creatingprojectsthat are part academicand part commercial,andmaking the traditional notion of the campusmore a thing of the past. Third, university developmentprojectstoday are often projectsof community and city redevelopmentas well as educationalprojects.As a result it is not uncommonfor citywide planning, design, and developmentgoals to become key elementsof university developmentplans. In short,universityreal estatepracticesmay be driven by internalgoalsof campusdesign,academicprogramneeds,andendowment,but therearevery few projects, on campusor off, that do not registeran impact on the city. Therefore,the chaptersin Part II explorethe ways successfuluniversity real estatepracticeshavecometo dependon the quality of relationshipsthe institution must maintain: with its n~ighborhood n~ighborhood (seechapters2-4); in the central businessdistrict or inner city (see chapters5-7); and through targeted models of university-city-statecollaborationmeant to have a downtown, citywide, or even regional impact (see chapters8-10). The casesin these chapterscover a full rangeof urbanuniversitiesin North America, detailing the experiencesof public and private institutions, researchuniversities of long-standingelite status,and new public-privateuniversity collaborations with a communitymission.The chaptersalso describethe ways new university real estatedevelopmentprojectsare embeddedin regional development strategies,cultural andsportsstrategies,andnew blendsof researchandcommunity service.

The Campusand Its Neighborhood The fIrst threechaptersin PartII are casestudiesof the fundamentaltension betweenthe university as campusand its neighboringsurroundingsas community. Eachcaseoffers a clearhistory of the waysuniversitieshavecometo fInd that successfulreal estatedevelopmentrequiresresponsivecollaboration with their residentialand commercialneighbors.Eachchapteralso exploresthe historical connectionsbetweenuniversity real estatedevelopment and urbanrenewaland public land clearance.Each caseservesas evidence of how broader,national trendsin the organizationand applicationof community developmentprinciples are fInding their way into the universitycommunityreal estatedevelopmentrelationship. The realizationthat successfulreal estatedevelopmentrequirescollaborative communitydevelopmentdid not comeeasily to major urbanresearch universities.In chapter2 SabinaDeitrick and Tracy Soskadescribea fourdecadestrugglebetweenthe University of Pittsburghandits immediateOakland neighborhoodasa periodthatforeveralteredthe university'sdependence

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on traditional campusplanning and corollary practices,including unilateral decision making regardingland developmentand campusexpansion.The casedescribeshow the university's mobilization of resources,powers of eminentdomain, and insularity of traditional campusplanning goals were challenged,first by protestinggrassrootsorganizationsand then by the formal creationof new communitydevelopmentorganizationsin the neighborhood. Deitrick and Soskadescribethe transformationof both university and community as eachmoved from "reactive modesduring the period of conflict and confrontation"to a new eraof university-communitycollaboration, often mediatedwith the help of city hall leadershipor state planners.Put anotherway, the authorssuggestthat this caseof community-baseduniversity real estateexpansionis the story of "how an 800-poundgorilla learned to sit with-and not on-its neighbors." The importanceof university-communitypartnershipsin the development processis also at the heart of PeterMarcuse'sand Cuz Potter's study of Columbia University in chapter3. Columbia, like the University of Pittsburgh, is truly an 800-poundgorilla when it comesto comparingits landholdings to that of its neighbors.Columbiais the third largestlandownerin all of New York City and, in many respects,as a landownerand investor, report Marcuseand Potter, it "has actedno differently than any other landowner; it has investedin real estatefor its financial return." But it is also different from other urban landownersin that it is one of the largest,most prestigiousinstitutions of learning, in the city and in the nation, and at the sametime it is located near the vibrant African American community in Harlem and the Dominican community in WashingtonHeights. Through a study of the university'sAudubonBiomedicalScienceandTechnologyCenter, Marcuseand Potter provide a clear picture of how another800-pound gorilla was madeto sit with and not on its neighbors. The requirementsof biotechnologyand sciencemadethe developmentof the Audubon Centera necessityfor the researchuniversity, and yet Columbia at first could not and later would not build the Audubon facility without respondingto the demandsof major political and communityoppositionrequiring that the renovatedfacility meetthe needsof scienceand community. In telling this story of modem university land development,Marcuseand Potter draw out three threadsthat affect not only Columbia but also other universitiesas they seekto blend campuswith community: 1. its concernwith meetingits own institutional needsby first housing its studentsandfaculty andthenproviding spacefor university-related economicactivities;

FROM CAMPUS TO CIlY: THE UNIVERSIlY AS DEVELOPER 11

2. the involvementof thosestudents(and somefaculty) in issuesdealing with the university'srole in the community; and 3. the reactionsofthe surroundingpoorercommunitiesto the universities' activities. In chapter4 Henry Webber offers a review of fifty years of universitycommunity developmenthistory in his casestudy of the University of Chicago.Over time, Webberexplains,the universityhasbecome"deeplyinvolved in efforts to improve communitiessurroundingits campus."The reasonfor suchefforts, early on, could be chalkedup to enlightenedself-interestas the neighborhoodssurroundingthe university declined, in somecasesprecipitously, and the very attractivenessof the university to faculty and students was threatened.Theseefforts, he suggests,"have generallybeensuccessful, but not without controversyor great cost." University forays into the community developmentprocessin the 1950sand 1960swere,like thoseof many university developmentefforts, appendedto the demolition and land clearing tenetsof urban renewal. Like other urban renewalefforts theseactions were met with stiff, vocal community resistance.By the 1990s the urban economyhadchangedanda somewhatchasteneduniversityemployeda very different, more engagedstrategyin the context of "Chicago'sgrowing attractiveness,the increasingrole of city governmentin neighborhoodplanning, and improved commercial and residential real estatemarkets [that] allowed the university to work with partnerneighborhoodsto improve communitieswithout costly andinstitutionally difficult real estate interventions." Therefore,Webberreports,university developmenttoday is highly influencedby the communitydevelopmentmovementand features a comprehensivesetof initiatives designedto makeneighborhoodsattractive to potentialresidentsby ensuringgoodschools,safestreets,goodtransportationandattractivehousingchoices... While real estateinitiatives are part of a comprehensivestrategyof supportinghigh-quality communities, they do not dominate.

The University andthe Central City Just as university real estatedevelopmentpracticesemergedas ingredients in the changingpatternsof urbanrenewalandcommunitydevelopmentplanning, they alsobecamekey featuresof inner city andcentralbusinessdistrict (CBD) development.The decline of central cities during the last half of the twentiethcenturywasespeciallypronouncedin CBDs andthe decliningresidential areasand derelict industrial zonesclosely linked to them. In chapter5

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Brian Coffey andYonn Dierwechterdescribethe developmentof an entirely new campusfor the University of Washingtonat Tacoma,locatedon a 4.6-acre "economically depressed,high-crime district that included a large homeless populationand severalvacantor underutilizedbuildings." The new campusis surroundedby warehouses,low-incomehousing,and port facilities. In telling thestory of the building of a new campusentirely in this setting, Coffey and Dierwechtergive us a new model of campusdesign where the major principles are not thoseof a traditional campusof greensand quadrangle, "hermeticallysealedoff from its surroundings,"but a clusterof educationalfacilities that "mix in seamlesslywith commercial,retail, andservice functions.For example,universitybuildingshouserestaurants,taverns,bookstores,and relatedoutlets. Expansionplans call for continuedallocation of spaceto be leasedto businessestablishments."The caseof the University of Washingtonat Tacomais one where a decidedly different approachto the campusmeetsthe functional needsof a new university and becomesa "major reasonfor the reurbanizationof the inner city." Urbanreal estatedevelopment approachedfrom this substantiallymore contextual vantagepoint becomesa practicethat includesconsiderationof the following factors: the university'simpact on historic preservation;the role of the university in promoting economicrenewal; land use issuesand concernsrelatedto the developmentof the site; and the perceivedrole the university plays in community development,particularly as relatedto social welfare andequity. If there is a casethat clearly builds upon and amplifies the findings of Coffey and Dierwechter,it is the Auraria Higher EducationCenterin Denver. In chapter6 RobertKronewitter,oneof the masterplannersof this unique highereducationsite, describesa development collaboration that locatesfour very different institutions of higher education,from community college to graduateresearchinstitutions, in a new multifunction campuslocatedin a deterioratedhistoric site, all rationalizedthrough urban renewal.The result is a multi-institutional campusthat blends historicpreservationwith largescalecapitalinfrastructureinvestmentto meetthe educationalneedsof 33,000 studentsand serveas "a functional and visual contributionto the revitalization of the DenverCBD." Kronewitterreportsthat this type of university real estatedevelopmentrequirespublic-privatepartnershipsamongcommercial, tourism and educationleadership,with the buildings of the campusagain serving a mixture of academicand community uses. If the campusplanningprocessin Tacomaemphasizeda real estatedevelopmentthat stretchedthe conceptof what a university campuswould look like, the Auraria campuscompletely changesthe notion of whose campus

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER 13

the university developerswere building. The campusplan becomes,in Kronewitter'sassessment, a part of Denver'surbanmasterplan. With buildings and land sharedby four institutions,the Auraria Higher EducationCenter becomesboth a physical manifestationof what is new in inner-city developmentand a physical manifestationof new linkagesin higher education as well. In eachof the precedingchapters,indeedin all the chaptersso far, thereis a clear message:university real estatedevelopmentis a political process. Without a goodunderstandingof local politics andwhat it requires,development will be far more difficult if not impossibleto carry forward. Elizabeth Strom approachesthis topic of the politics of university real estatedevelopment comparativelyin chapter7. She studies "the experiencesof the University of Pennsylvaniaand Temple University, two large institutions situatedjust outside Philadelphia'scentral businessdistrict, which have becomeincreasinglycommittedto urban developmentand community revitalization activities." The chapterstartswith the assumptionthat "the institutional healthof an urbanuniversity is inextricably boundto the healthof its surroundingcommunity" andcomparesthe differences,successes, andchallengesto be found in andbetweenthe community-universitypolitics of Temple,the public university, and Penn,the private university. Strom finds that Penn'svariety of community-basedinitiatives, ranging from buying from local vendors to highly visible studentlearningcontractswith communitygroupsandschools, makesit "easierfor the institution to achieveits own goals, including campus expansion,"citing specifically the university's relations with the city council when buying large tracts of inner-city land. Temple ignored, at its peril, the interestsof electedofficials and concernsof the statedelegation, making the obviouslink to both local and statepolitics even more a part of the university'sdevelopmentprocess.Throughthis comparativeassessment, Strom illuminatesclear leadershipchannelsin politics that must be adhered to; suchcommunicationstructuresare nevermore apparentthan in the politics of real estate.In light of the needto mobilize political supportfor a real estateproject, Strom also reports that while universities often have goals similar to private developers,their nonprofit statusrequiresa more nuanced list of strategiesto accomplishthe developmentobjective. The University as a Collaborator in Urban Development A commonthemerunning throughchapters2-7 is that university real estate developmentrequirescollaborationwith and betweena full array of public and private actors.The next three chaptersbuild on Strom'spolitical study,

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offering an assessment of the politics and practicesof negotiation,the characteristicsof leadership,and the institutional conditionsof political and financial managementof risk that comprisesuccessfuluniversity real estate development. More than most functions of university development,successfullargescalereal estateinitiatives require stronginstitutional commitmentand benefit from the full attentionof seniorinstitutional leadership.This certainly is born out in a studyof GeorgiaStateUniversity in chapter8. LawrenceKelley and Carl Patton explore the university's developmentstrategyfor building and renovating a substantialnumber of university buildings as part of a several-billion-dollarrenewal effort in downtown Atlanta. The authorsdescribehow a city without a downtownmasterplan benefitedfrom a university that took over the downtown planning processand became,through its own real estateredevelopmentefforts, the leadinstitution in the overall central city redevelopmentprocess.The casecenterson the work of a new "plannerpresident"at GeorgiaStatewho usedthe claim that the "university should be a part of the communityand not apartfrom it" as the guiding principle for the university'sfirst strategicmasterplan. Kelley and Pattonsuggestthat the plan identified a full agendaof university and urban renewalissuesthat required, for its execution,a rich constellationof university, private, and state governmentalpartnerswho "built support,utilized two private foundations to float bond issues,leveragedprivate funds, and developedthe expertiseto rebuild (the university) and downtownAtlanta." Kelley and Pattondescribe suchdevelopmentas a productof many factors: politically active university leadership,focusedstrategicplanning,andthe mobilizationof fiscal resources throughinnovativepublic and private investmentmechanisms.Of the three, they argue,university leadershipcomesfirst. Leadershipalso plays an important role in the comparativetale of three cities (Indianapolis,Louisville, and St. Louis) and their universitiesfound in chapter9, by ScottCummingsand his colleagues.They highlight the central role university real estatedevelopmentcan play in building and expanding campusinfrastructure,and in rebuilding cities themselves.They compare the experiencesof three universities(Indiana University-PurdueUniversity at Indianapolis,the University of Louisville, and SaintLouis University) and find themto be importantexamplesof how universitiesuselarge-scaleurban land clearanceprogramsand citywide goals of redevelopmentto advance their own real estatedevelopmentagendas. In telling the stories of theseinstitutions of higher educationand their cities, the authorscharta comparativepattern"of public-privatepartnerships in which the universitieswerecritical intermediaries."The chapterdescribes how university leadersare able to imbed their institutional development

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER

15

agendasinto large citywide redevelopmentagendasbasedon the arts, entertainment, sportsfacilities, and tourism. In eachof thesecities, educational administratorsemergeas "major political playersin the urbanregimesand coalitions promoting redevelopment."Cummingset al. describeprocesses that require innovative university developmentarrangementsand publicprivate partnershipswith a citywide rangeof actorsincluding private investors, federal agencies,and municipal and stategovernments.As a result the authorsfind universityreal estatedevelopmentto be a complexprocesswhere "both political and financial risks ... must be strategicallymanagedwhen universitiesbecomeplayersin larger developmentagendas." However, university real estatedevelopmentstrategiesthat are closely linked to larger urban developmentagendasrequire more than leadership, planning,and the managementof risk. They also requireskillful negotiation betweenpublic and private partnersto carry out the mix of academiccommercialprojectsthat are making up larger and larger parts of university development.In his casestudy of RyersonUniversity's attempt to build a mixed commercial-universitybuilding on universitylandin Toronto'sDundas Square,David Amborski, in chapter10, examinesnegotiationsbetweenthe university, the private developer,and the City of Toronto. In the processuniversity real estatepractitionersencountercomplex,often conflicting requirementsof private commercialdevelopmentand of the university that mustbe reconciledif a deal, both financial and programmatic,is to be struck. Such negotiationsgo to the heart of how to plan, build, and ultimately manage mixed-useuniversity buildings.Amborski'scasestudy is a good exampleof how the resolutionof university goalsand missionwith the proprietarygoals in the building of new campus-citystructureshas becomean important ingredientin good real estatepractice.

University DevelopmentPractices:Acquisition, Finance, Development,and the Deal To understandthe role of the university as developer,it is importantto investigate the issuesthat affect a university'sacquisitionand developmentpractices and how these issuesmanifest themselvesin day-to-day activities, accordingto Ziona Austrian andJill Norton. This importantassertionestablishes one of the key elementsof the larger researchagendafor urban real estatedevelopmentand setsthe topic for Part III. In these chapters the contributors attemptto examinethe microlevelpracticesof university real estate development:What arethe issuesthat drive university acquisitionanddevelopmentpractices?How are thesepracticesmanifestin day-to-dayactivities, both inside the university and externally, as the institution engagesthe city?

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Threegeneralareasof practicein universitiesare of concernin this set of five chapters.Austrian and Norton first provide an overview of the complexity of acquisitionand developmentpracticesand the multiplicity of institutionallevelsand communitycontextswithin which they occur.The next two chaptersfocus on what someconsiderto be the real meatof the acquisition and developmentprocess:financing the deal. The last two chaptersaddress the question,"Who's in on the deal?" They explore the ways universities must createnew partnershipswith the private sector,city, and communityto make a developmentwork, as well as the needto createwhole new publicprivate entities or developmentagencies. Using such criteria as public-privatestatus,enrollment size, geographic location, andthe characteristicsof surroundingneighborhoods,Austrian and Norton, in chapter11, studiedfive universitiesusing a national survey that provided a more fine-grained assessmentof both the independentfactors that influence university real estatedevelopmentand the impact that such factors have on particular higher educationreal estate practices.The key independentfactors they find are university leadership,the land developmentmotivationsof the institution, andthe physicalandpolicy environments in which the university finds itself. The authorsarguethat thesefactors help shapekey real estatepracticesof decision making,financing, and community relations,alongwith assessingthe typesof real estateprojectsuniversity developersundertake. Understandingthe different mechanismsuniversitiesuse to finance their real estatetransactionsis especiallyimportant, and the next two chapters offer clear casesof how different institutions (public and private) have approachedmajor downtown mixed-usedevelopmentprojects. Larry Kurtz's account,in chapter12, of the leasingpracticesof the University of Toronto's affiliate Victoria University is an instructive descriptionof the benefits of employingleasefinance strategiesas mechanismsfor building both university facilities and university endowment,as well as contributingto the economic developmentof surroundingurban residential and commercial communities.Most of the casestudiesin previouschaptershave dealt with the large-scalereal estatedealsconductedby ratherlargeinstitutionsof higher education.Throughhis analysisof threedifferent real estateinitiatives, Kurtz seeksto answera host of financequestionsand show how small universities can participatein urbanreal estatedevelopment. Kurtz raisesthe following questions:How does a small arts/theological university come to be a major landownerand commerciallandlord in the middle of Canada'sbiggestcity, Toronto?What doesit take to tum university propertyinto endowmentreal estate?And what impact doesthe university as developerhaveon its surroundingcommunity?The answersarefound

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER 17

in Kurtz's detaileddescriptionof the leasefinance practicesthat allowed his small urban university to employ a land developmentstrategythat was one part "acquisitive, expansionistinstinct" and one part "control of development" that turnedinto a "quasi-sacredtrust" of institutionalendowment.Kurtz gives ampleevidenceof the benefitsthat can accrueto an institution whenit beginsits real estateefforts with the assumptionthat leasingratherthan selling its propertyholdings is a preferredlong-time developmentstrategy. In chapter13 KennethMcHugh extendsour concernfor the study of the midsizeurbanuniversity as well as large researchinstitutions, with his case study of developmentpolicy at DePaulUniversity in Chicago.The chapteris a study of financial practicesmeant to addresscomplex preservationand mixed-userehabilitationprojects.McHugh describesthe acquisitionand rehabilitation processconductedby DePaul, in partnershipwith the City of Chicago, which produceda model mixed-usedevelopmenteffort between the university, the city, and the commercialsector. The complex array of university-city fiscal strategiesdescribedin the caseare at onceuniqueand, yet, in their innovative mix of financial obligations and public incentives, instructive of the new ways acquisitionand developmentpracticescan benefit from addressingthe concernsof new markets of educationand commerce.The resultis the redevelopmentof oneof the largesthistoric buildings in the heart of downtown Chicago. Now known as the DePaul Center, the projecthashelpedtransforman importantbuilding and sectionof Chicago's downtownLoop areaandalso helpedelevateDePaul,accordingto McHugh, "from the 'little schoolunderthe El tracks'to its positionasthe largestCatholic and ninth largestprivate university in the nation." Addressingthe successful implementation of financial mechanismsin successfuluniversity-communitydealmaking,Allegra Calder,GabrielGrant, and Holly Muson, in chapter14, concentrateon "who's in on the deal (and why)." Their study of Boston's NortheasternUniversity and a mixed-use housingprojectat the DavenportCommonsfor studentsand neighborsidentifies the stakeholderswho needto be in the real estatecollaboration,if it is to succeed.The casesuggeststhat recognizingandtrying to satisfy different, evenapparentlycompeting,interestsmay not sink a project; ratherit may be caseall interthe only way to accomplishit. In the Northeastern-Davenport estswere able to claim success:"The university addednearly 600 bedsto its strainedinventory; the city successfullydisposedof long-underusedparcels of land in a mannerthat helpedthe city's affordablehousingproblem; and the local residentswon a numberof concessions,including homeownership rather than rental units, a lower overall density, and greatertransparency with respectto the university'smasterplan." Calder,Grant, and Muson conclude with the observationthat "the fact that all involved were able to claim

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somelevel of victory allowed the project to be built and will makeit easier for Northeasternto pursuefuture developmentin the area." David Dixon and PeterRoche, in chapter 15, also discusscreating the climate to "do the deal." Their casestudy of The Ohio State University's CampusPartnersorganizationexploresthis specialdevelopmentagencycreated to facilitate the university'sparticipationin community real estatedevelopment. CampusPartnersis organizedto carry out significant land acquisitionand financial, political, and administrativepracticesfor the university in order to redevelopthe neighborhoodnext to the campus.Quite often universitieshave neitherthe authority nor the staff expertiseto attend to the full rangeof mattersrelating to real estatedevelopmentandexpansion off the campus.This was certainly the caseat OSU, which determinedthat it would be advantageous to engagein large-scaleprojectsof mixed-usedevelopmentandneighborhoodhousingrevitalization.This initiative cancertainly be viewed as a prime exampleof how a nationally recognizeduniversity can becomeactively involved in "stemmingthe tide" of urban decline through community revitalization. Dixon and Roche report, however, that the real estatedevelopmentprojectsat OSU were really more examplesof "enlightened self-interest," where the university's recognizedneedsfor a "crimefree," "vital" communitythat would "enhancethe quality of studentlife" and help "attracttop studentsandfaculty" representedthe real drivers of development. For the university to effectively enterthe communitydevelopmentprocess,it neededto establishits own community developmentcorporation, CampusPartners.Today this quasi-universityagencyis designedto carry out the tasks of day-to-daydevelopment,constructionmanagement,marketing, and operationalactivities of complexuniversity real estateinitiatives.

LessonsLearned In their review of the fourteencasestudiesin this collection,Wim Wiewel and David Perry conclude,in chapter17, that university real estatedevelopment constitutesa new academictopic anda new areaof appliedresearch.Therefore it is very importantto provide both conceptualand caseanalyses,as well as a summaryor overview that setssomeparametersfor evaluation.This last part of the book beginsthe academicconversationaboutguidelinesfor institutional and practice-based evaluationof university real estatedevelopment. The conflictive placeof the universityin the city, especiallyas it relatesto land developmentpractices,requiresan assessment of the ethics or institutional responsibilitiesof the university. The precedingcasestudiesfocused almost exclusively on the practicesof those who conduct the university's real estatebusiness.The issueof how closely doesor can this businesshew

FROM CAMPUS TO CITY: THE UNIVERSITY AS DEVELOPER 19

to the larger missionof the university, to servethe requirementsof teaching and research,and the broaderpublic interest,is worthy of consideration.In part this goesto the heartof the debateover just how engageda university shouldor can be with its surroundingcity and still maintain,both physically andprogrammatically,the independence requiredfor theproductionof know1edge.Is the tensionbetweenacademicmissionand the proprietaryimpulses of real estatedevelopmentresolvedwhen a university takesthe path of enlightenedself-interest? Even a casualreadingof the casesin this volume gives rise to a host of other questions:How much real estateshould a university own and develop?Is therean upperlimit? Doesthe role of the university as developer changewhen the project is consideredpart of the educationalinfrastructure? Does the university take on a different set of obligations when the project is strictly an income-generatingpart of its endowmentportfolio? Finally, are there conditionswhen real estatedevelopmentceasesto be a worthy institutional function? As RachelWeber,Nik Theodore,andCharlesHoch suggestin chapter16, university officials "must addressthe ethical ambiguitiesand challengesencounteredwhen their universitiesact as developers."They evaluatethe case studieswith an essaymeantto describewhy and how "ethics matterin university real estatedeals."Suchethicsare not abstractions-theyare toughly honedinstitutional parametersthat cometo guide (or sometimesnot playa role in) universityreal estatedevelopment.For example,in chapter15 Dixon andRochedescribean institutional ethic of enlightenedself-interest.Weber, Theodore,and Hoch suggestthat the "practical ethics" of university real estatedevelopmentare "situational,negotiatedby deliberationamongshifting stakeholdersinside and outsidethe university." The normsthat must obtain in each situation can be summarizedin the following ways: Does the dealfit the basicpurposesofthe universityandthoseit serves?Doesthe deal offer good marketvalue for the university as a competitorin the real estate market?Does the deal treat the relevantpartiesfairly? Further, the authors suggestthat any transactionin such a situationalsetting must be guidedby conditionsof reciprocity, that is, a balanceof costsand benefitsin the transactionbetweenthe parties,andtransparency,wherethe communicationchannels betweenthe partiesare open,clear, and well-serviced. Wiewel and Perry review the rich analysisand experiencecoming from the manyvantagepoints of the previouschaptersandprovidethe readerwith a syntheticessayof bestpracticesandlessonslearned.They find that universities are highly proactive, internally motivatedinstitutions that have, over time, joined with a broadrangeof partnersandintermediariesanduseda full and sophisticatedarray of financial planning and developmentpracticesto

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accomplishtheir developmentalends.The real estatedevelopmentprojects that universitiesseekto developtoday appearalmostlimitless, althoughthe main reasonsuniversity developerslook to acquireland and build on it remain the expandingdemandsintegral to their core mission.But, as the cases here show, a substantialshareof urban university projectsnow are mixeduse developmentefforts that physically blur the edge and structureof the campus.Wiewel and Perry offer a summativebridge to more work in both the academicanalysisand professionalunderstandingof universitiesas developers.As such, the chapteris an early assessment of the stateof knowledgeand practicein this important, albeit nascent,academicfield. References Bender,Thomas,ed. 1988. The universityand the city: From medievalorigins to the present.New York: Oxford University Press. Bender,Thomas, 1998. Scholarship,local life, and the necessityof worldliness. In The urban universityand its identity: Roots,locations, roles, ed. HermanVan der Wusten,pp. 17-28. Dordrecht,Netherlandsand Boston: Kluwer AcademicPublishers. Cisneros,Henry. 1995. The universityand the urban challenge.Washington,DC: U.S. Departmentof HousingandUrbanDevelopment,andRockville, MD: HUD USER. Crooks, James.1982. The AUU and the mission of the urban university. Urbanism Pastand Present7(2): 34-39. Dober,RichardP. 1963. Campusplanning.New York: Societyof CollegeandUniversity Planners. ---.1991.Campusdesign.New York: JohnWiley. ---.2000.Campuslandscape:Functions,forms,features. New York: JohnWiley. Grobman,Arnold Brams. 1988. Urban state universities: An unfinishednational agenda.New York: Praeger. Harkavy,Ira, andJohnL. Puckett.1994.Lessonsfrom Hull Housefor the contemporary urbanuniversity. Social ServiceReview68(3): 299-321. Initiative for a CompetitiveInner City (ICIC). 2002. Leveragingcollegesand universities/orurban economicdevelopment:An action agenda.Boston: CEOsfor Cities. Kellogg Commissionon the Futureof Stateand Land-GrantUniversities. 1999. Returning to our roots: The engagedinstitution. New York: NationalAssociationof StateUniversitiesand Land-GrantColleges. Klotsche, J. Martin. 1966. The urban university and the future of our cities. New York: Harper& Row. Maurrasse,David J. 2001. Beyondthe campus:How collegesand universitiesform partnershipswith their communities.New York: Routledge. McDowell, GeorgeR. 2001. Land-grantuniversitiesand extensioninto the 21stcentury: Renegotiatingor abandoninga social contract. Ames: Iowa StateUniversity Press. Muthesius,Stefan. 2000. The postwar university: Utopianist campusand college. New Haven:Yale University Press.

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Nash, George. 1973. The university and the city: Eight casesof involvement.New York: McGraw-Hill. National Centerfor EducationStatistics(NCES). 2002. Digestofeducationalstatistics. Washington,DC: U.S. Departmentof Education(http://nces.ed.gov). Pinck, Dan. 1993. (Re)emergingroles for developers:Universitiesas partners.Real EstateFinance 10(2): 62-64. Shils, Edward. 1988. Theuniversity, the city, and the world: Chicagoand the University of Chicago.In The universityandthe city: From medievalorigins to thepresent, ed. ThomasBender,pp. 210-30.New York: Oxford University Press. Turner, Paul Venable. 1984. Campus:An Americanplanning tradition. New York: ArchitecturalHistory Foundation. U.S. Congress.HouseCommitteeon Banking, Financeand UrbanAffairs. Subcommitteeon Policy ResearchandInsurance.1992.The Role of UrbanUniversitiesin Economicand Community Development:Hearing Before the Subcommitteeon Policy Researchand Insuranceof the Committeeon Banking,Financeand Urban Affairs, Houseof Representatives, OneHundredSecondCongress,First Session, October28, 1991.Washington,DC: U.S. GovernmentPrinting Office. U.S. Congress.House Committee on Education and Labor. Subcommitteeon Postsecondary Education.1979. The Urban Grant University Act of 1977: Hearings Before the Subcommitteeon Postsecondary Educationof the Committeeon Educationand Labor, Houseof Representatives, Ninety-Fifth Congress,Second Session,on H.R. 7328. Washington,DC: U.S. GovernmentPrinting Office. Van der Wusten,Herman,ed. 1998. The urban universityand its identity: Roots, locations, roles. Dodrecht,Netherlands,andBoston: Kluwer AcademicPublishers. VerMeulen, Michael. 1980. The university as landlord. Institutional Investor 14(5): 119-122. Wolfe, RobertJ. 1986.When a university becomesa developer.RealEstateFinance ]ournaI2(1): 56-61.

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Part II The Campus and the City: Neighborhood, Downtown, and Citywide Development

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Section 1 - - - - The Campus and Its Neighborhood - - - -

2 The University of Pittsburgh and the Oaldand Neighborhood From Conflict to Cooperation, or How the 800-Pound Gorilla Learned to Sit withand not on-Its Neighbors Sabina Deitrick and Tracy Soska

In the summerof 2002, two separatebut interrelatedeventsoccurredin the Oaklandneighborhoodthat surroundsthe University of Pittsburgh.The first was a retrospectiveexhibition, "Designing Oakland," which showeda century of plansand planningin the neighborhoodknown as Pittsburgh'straditional cultural center(CarnegieMuseumof Art 2002).The visitor's attention was drawn to severalmodels,largely centeredon andconceivedby planners for the University of Pittsburgh.ChancellorEdwardLitchfield's plan of 1958 portrayedan expandeduniversity with new buildings extendingwell into Oakland'sresidentialneighborhoods.Championedas "a new era for Oakland," the plan reflectedthe university's desire to become"a great university" (Breachler1958, 2). The second,bolder proposalfor Oakland,known as the PantherHollow project,includedan entire skyscraperlaid on end and a technologypark of hanging gardens,the "fust city of the 21st century" (Faust1963, 7). Thesevisions for university expansionslatedseveralareas borderingthe campusfor clearanceandredevelopment(Breachler1958;Pittsburgh RegionalPlanningAssociation1961). The third campusplan was less imaginativein scopebut no less expansive. Designedby the Pittsburgharchitecturalfirm DeeterRitchey Sippel, the University MasterPlanof 1968 extendedPitt's campusin two directions, sprawling up the hill from the upper campusand extendingdeep into the heart of Oaklandon the southwestside next to ForbesField, then home of the PittsburghPiratesbaseballteam. 25

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Though architecturallydifferent, the Litchfield plan of 1958 and Deeter Ritchey Sippel masterplan of 1968 envisionedsimilar changesfor the university and the neighborhood: • a University of Pittsburghboth spatially and academicallylarger than the original institution, with new buildings groupedby academicdiscipline and activities; • more studentresidencesto housethe growing studentpopulation; • demolition and redevelopmentof severalOakland residential areas, including the ForbesField area, which would becomeavailable for redevelopmentwhen the Piratesmovedto their new homeneardowntown; and • views of the nearby Oakland neighborhoodsas spacesfor university expansion,treatingthe community"like barrenground" (Phillips 2002). This was the university as the 800-poundgorilla. The secondeventoccurredjust a few blocks away from the Oaklandexhibit. The university openeda new building on the southernpart of campus called SennottSquare,housing "multipurposes"including academicand nonacademicfunctions for both university and commercialuses.This opening culminateda cycle of planning, community resistance,and organizing that coincidedwith the planson display at the museum.The building's location, called the "two-block area," had been"a battlegroundfor universitycommunitysparringthat spannedthe tenuresof four chancellors"(Hart 2000, 11). Reflecting on that history and the evolution of university-community relationsoverthe period,ChancellorMark Nordenbergproclaimedat Sennott Square'sdedicationthat the project representsa "tangible reflection of our new eraof partnershipandprogresswithin our community"(Sammons2002, 2). This was the university that learnedto sit with its neighbors. This casestudy analyzesthe planning and real estatedevelopmentprocessesof the University of Pittsburghfrom the 1960sonward and its relationship with its Oakland neighborhood.Relationsbetweenthe institution and the community evolved over this period, as both underwenta seriesof changesreflecting different erasand institutional shifts. Two key themesinfluencedthesechanges.First, in 1966 the university becamea quasi-public institution. This "public-ization" begana gradual processthat changedits role and identity from private to public actor in the city and region. Second, the externalcontext of community planning was changingin the 1960s,as cities and communitiesbattled bulldozersand urban renewal. TheOakland community was undergoingits own mobilization toward organizationaland political changeslike many placesin America at that time. The university's

THE UNIVERSITY OF PITTSBURGH 27

early plans,showcasedin "DesigningOakland,"led to conflict andthenconfrontation. Over time the community and university moved through an uneasyand unevenprocesstoward cooperationand collaboration.The Sennott Squarededicationrepresentedthe culminationof the changesin the university in an era of cooperation,a shift from what ThomasBendercalls "the university in the city" to a "university of the city" (Bender2002, 150).

Context:The OaklandNeighborhood Oaklandand the University of Pittsburgh(Pitt) were no strangersto grand plans.In the nineteenthcentury,former residentMary Schenleydonated300 acresto establisha park, and the city addedmoreland centeredon a plazain the Schenleyname(Coyneet al. 1974).Andrew CarnegieselectedOakland for his library, museum,and lecturehall in the late 1890sand for his technical school a few yearslater. At the tum of the twentieth century,local businessmanFrank Nicola conceivedof Oaklandas Pittsburgh'sCity Beautiful Civic Centerandattractedthe University of Pittsburghin 1908 with its plans for an "Acropolis on the Hill" (Breachler1958; Lowry 2002). By 1920Oakland laid claim to the region'scultural andcivic center(Lubove 1995).A few years later the university beganconstructionon the forty-two-story gothic Cathedralof Learning,dubbedthe world's tallest educationbuilding. The Oaklandneighborhoodexpandedwith thesedevelopmentsas many residentsworked in the nearbyeducationaland cultural institutionsor sports stadiums.By 1950 some22,000peoplelived in Oakland,with 8,452 in the core area next to the university. Gradually this concentrationof activities beganto weakenas the city plannedto build a new sportsstadiumnearthe downtown and move the Piratesbaseballteamfrom their Oaklandhome at ForbesField. The city also embarkedon plansfor a new cultural district in the heartof the CBD (Hart 2000). Oakland'seconomicbasewas changing, as wasits former residentialbaseof primarily family homeownersandlongterm renters.While over 80 percentof Oakland'spopulationlived in their residencefor more thanfive yearsin 1950,the figure droppedto just over 50 percentby 1960 (Dolan 1993). The trend toward more short-termresidents and rental propertieswas underway, and by 2000 centralOakland'spopulation fell to 5,281 as many residentsmoved to the suburbs.The university's plans would acceleratethis trend. Pitt's plans in the 1960s beganthe first period of conflict betweenthe institution and the neighborhood.The fanciful hanginggardensand technology park were neverrealized,and only a few buildings in the 1958 comprehensiveplan were built: LawrenceHall, Litchfield Towers dormitory, and Hillman Library (seeMap 2.1). The university was facing financial distress,

28

DEITRICK AND SOSKA

Map 2.1

Oakland Neighborhood and Major University of Pittsburgh Real Estate Projects

Neighborhood and

2 -Wesley W. Posvar 2 -Wesley W. Posvar Hall (Forbes Quad) 3 -David Lawrence Hall 4 - Cathedral of Learning 5 -Holiday Inn Univ. Center 6 -Bouquel Gardens 7 -Peterson Event Center 8 -Falk School 9 - Carneg ie Lbrary 10 -Sutherland Hall 11 - Fraternity Housing ComCom Sailors 12 - Soldiers & Sailors Pa 13 -Soldiers Soldiers Site Soldiers

Oakland Neighborhood

Source:Map was preparedby Andrew Aurand, graduatestudent,GraduateSchoolof Public and InternationalAffairs, University of Pittsburgh.

and the chancellorwas forced to resign.The Commonwealthof Pennsylvania hadto stepin to absorbPitt as a "state-related"institution, aboutthe sametime it took over TempleUniversity in Philadelphia(seechapter7 in this volume).

Conflict and Confrontation The changein university status from private to quasi public changedthe institution after 1966.UnderChancellorLitchfield theuniversityhadplanned

THE UNIVERSITY OF PITTSBURGH 29

to expandthe physical campusand increaseenrollmentsto 22,000 (PRPA 1961);public-izationacceleratedboth processes.Enrollmentsdoubledin six yearsand the numberof full-time studentsexceededpreviousprojections. Public-izationmeanta new role for the statein the institution, with executive and legislativebodiesinvolved throughfinances,governance,reporting, and appropriations.Someof thesechangeswere felt immediately,while the impact of others becameevident later in the developmentprocess.Tuition droppedby over two-thirds, and the public contributionroseto 50 percentof the university's operatingbudget by 1971 (Kobosky 1974). Through the GeneralStateAuthority (GSA), the stateplannedover $100 million in campus constructionprojects and could act on behalf of the university to use eminentdomain to acquirethe land. In 1967 the GSA purchasedland near ForbesField, a two-block areaboundedby ForbesAvenue, BouquetStreet, and OaklandAvenue (Hart 2000; Roling 2002).1 The new chancellorunveiled the University Master Plan of 1968; it was less expensiveand less expansivethan ChancellorLitchfield's 1958 plan, but targetedthe sameparts of Oaklandfor campusexpansion(Roling 2002; Shaw 1973).The key areasfor expansionplans were the two-block area,as the eminentdomain areanearForbesField cameto be known, and an area nearthe campusin a north Oaklandneighborhood. The university proceededusing the traditional approachto planning of that time: finalizing a plan internally, focusing on formal organizations,and ignoring grassrootsandnoninstitutionalinterests(Shaw1973;Kobosky 1974). The university unveiled its masterplan to the Oakland Chamberof Commerce,the city's planningdepartment,and Model Cities, none of which expressedseriousreservationswith the plan. The university then requested funding from the statebut was blindsidedby what occurrednext-Oakland residentswere extremelyupsetby both the masterplan and their exclusion from the process. Parts of the University Master Plan of 1968 proceededwithout incident, including new buildings on Pitt's existing campus,bUt plans for other areas createdconflicts in the community. For examplethe campusexpansionplans called for new studenthousingfor the larger enrollment,roughly 1,500 students,to be housedin a new Hillside dormitory locatedin the uppercampus (Spatter1992).The project was to take part of the private Falk School'splayground(ironically, a privateschooloperatedby the university'sSchoolof Education), located in a congestedarea that included nearby residentsand the Veteran'sHospital, which had alreadyencroachedon the neighborhoodwith its own expansion.The university informed the Falk School'sdirector of its plansin 1970,andthe schoolprincipal, schoolsupporters,andresidentsquickly beganto organizeand complainto the university (Shaw 1973; Roling 2002).

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The secondareaof conflict was aroundForbesField, the two-block area extendinginto the community. The masterplan called for a four-phasedevelopment,part of it a contractedversion of the Litchfield plan with a new law schoolanda quadrangleof professionalschools.The impositionof eminent domain,the acquisitionof property,the lack of relocationof residents, and the destructionof ForbesField provided the sparksfor neighborhood residentsandactivists.Communityoppositionat the grassrootslevel emerged and organizedas the confrontationwith the university intensified. In many areasacrossthe country, community efforts to battle eminentdomain and redevelopment resulted in new community development corporations(CDCs) in affectedneighborhoods,andOaklandfollowed this path(Gittell andWilder 1999). Opponentsto the Hillside dormitory project cametogetherin a seriesof meetings inSeptember1970, forming People'sOakland.As students,professors,architects,lawyers, and othersjoined the Hillside residentsin fighting theuniversity'sexpansionplans,thefocusof the groupexpandedto include of Oakland(Coyne the future of ForbesField and the feareddisappearance et al. 1974; Hart 2000; Phillips 2002).The leadersof People'sOaklandsummarizedtheir approachas finding "small technicalities"that createdelays and can kill a project (Phillips 2002). The community was helped by political changesin Pittsburgh. Peter Flaherty defeatedthe Democratic machine candidatefor mayor in the primary and won the generalelection in 1969 (Lorant 1978). His campaign platform emphasizeda redirectionfor Pittsburghtoward its neighborhoods and away from the nonresidentialprojects of the famed PittsburghRenaissance (Lubove 1995). Dubbed"a new folk hero" by the New York Times(Lorant 1978, 62),Mayor Flahertychangedthe planning departmentto reflect his focus on neighborhoodinvolvementand issues (Lurcott and Downing 1987). Plannersfrom the city aided community activists in Oakland(Kobosky 2002; Phillips 2002). Flahertyalso battled the expansionof other nonprofit organizations,as the city feared losing more taxableproperties. Using political channelsand creating delaysadvancedthe community's agenda.In January1971 People'sOaklandfiled an objectionwith the planning commissionto the university'sconditionaluse applicationon the Hillside dormitory project. The planningcomlnissiondelayedapprovalof Pitt's plans until the city, community, and university discussedand agreedon the plans.The communityalsoproposedalternativereuseplansfor ForbesField, which Pitt rejected.People'sOaklandlobbied stateofficials in Harrisburgto stop the university'sdemolition of ForbesField (Hart 2000; Phillips 2002). Supportfrom then governorMilton Shapp,anotherindependentDemocrat,

THE UNIVERSITY OF PITISBURGH 31

and a lack of statedevelopmentmoniescausedthe stateto suspendfunding for Pitt's constructionprojectsuntil the university could work with the community on a new plan. The community'stactics worked. The university abandonedits master plan, including plans for the contestedtwo-block areaand the Hillside dormitory, and agreedto relocatebuildings to other sites.It enteredinto a joint planningprocesswith the communityand the city, mediatedby a GSA official and describedas "a new era of cooperation"(Dunlop 1973). The state was interestedin approvalof a joint plan, having investedsignificant funds in the master planandfacing rising constructioncosts.The communityagreed to end its battle to saveForbesField but persistedin defining the borderof Pitt's new constructionto be BouquetStreet-theeasternedgeof the twoblock areaheld by the GSA. Furthermorethe university agreedto "the developmentof new commercialspaceand 'people-oriented'spacein the Forbes Field area" (Shaw 1973,24). Early outcomeswere achieved:the Law Schooland professionalschools buildings were locatedto new sites;Pitt agreedto pay the city an amountfor city services(insteadof paymentsin lieu of taxes); and People'sOakland createda new community planning organization,OaklandDirections, Inc. (ODI), as a permanentjoint planningprocessin Oakland,with community, university, and city planningrepresentatives in leadershipand activist roles (Kobosky 1974; Phillips 2002). om securedpublic and private funding for the process,which centeredon a numberof issuesincluding the two-block areastill ownedby the statebut now freed from university expansionpressureby the reducedForbesField-areaexpansion.In 1972the university and community settledon a new plan for the area,which was to include 17,000 squarefeet of spacefor the communityand35,000squarefeet for the university (Coyne et al. 1974, 8). The university was to maintain the buildings, which would also include the local office of the GSA. Over the period of conflict and confrontation,the university underestimatedthe political strengthof the community and the changedpolitics of both city and stateofficials. A 1973 analysisof the processconcludedthat "[t]he University ... proceededwithout effectiveorganizationandplanning, thus compiling a recordof what now is seenas comic operaepisodeswhich made the University appearintransigentand uncooperativeand may have assistedthe organizationalefforts of the adversariesto campusexpansion" (Shaw 1973, 10). The university also misunderstoodits own role as a newly public institution. One informant characterizedthe university coming out of its private statusas "grand style with a lot of vision and little practical ability to make thingswork." Throughthe periodof conflict, universitycommunityandpublic

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affairs were handledby the Office of PhysicalPlant, which lackedexpertise in theseareas.While individuals in the institution recognizedthe changed environmentin which the university was working, an early proposalto establish a communitypolicy (1970) was not enacted(Shaw 1973). Sincethe university wasforcedinto joint meetingswith the communityby the city and state,Pitt plannershad to changetheir understandingof what was meantby participatingformally with the community.After abandoningthe 1968 master plan andForbesField project,the universityestablishedan Office of Public Affairs responsiblefor the joint planning processand communications with the community,city and state(Kobosky 1974). The university did expandgreatly over the 1960-80period, increasing from 64 to 110 acres,mostly on the former ForbesField site (Hart 2000). The numberof buildings increasedfrom 23 to 40 over the sameperiod, althoughmost were within the university boundariesand not a threatto Oakland: the Nursing School, Chevron Hall, Crawford Hall, Hillman Library, LearningResearchandDevelopmentCenter,BenedumHall, GraduateSchool of Public Health, andTreesHall. An importantquestionaboutthis processis: sincemostof the university's constructionplans were realized, did the community influence real estate developmentat the university?The evidencefrom sourcesand interviews points to a qualified yes.The activism stoppedthe physicalexpansionof the 1968 masterplan. At the sametime the field of planningitself was changing. Community involvementwas increasinglyrequiredfor major development plansfrom the local level to federal governmentprograms.Politics in older industrialcities andat the statelevel wasalsochangingasindependentDemocrats took power. The community understood politicalchangesbetterthan the university did and made connectionswith city and state governments. The conflict also changedthe community, which beganto developits own planning processfor Oakland. The university viewed itself as detached,in part due to its history as a privateinstitution, andwas not as capablea political playerin a public arena. The university required a much longer time to adapt to its public-ization processthanthe short timeof its legal incorporationinto the Commonwealth system.One former university official felt that if the university had become state-relatedyears earlier, "[p]erhapsthen the University would have been acclimatedto functioning as a public agentand the circumstancesof 1971 would have been avoided" (Kobosky 1974, 66). That inexperienceproved costly for the University Master Planof 1968.Ultimately, though,the delays pushedthe university into a joint planning processwith ODI that produced new developmentplansacceptableto communityand its public partnersand a new processfor future planning.

THE UNIVERSITY OF PnTSBURGH

33

On the Roadto Collaboration,or Crisis In 1980 ODI publishedThe Oakland Plan (Om 1980), a neighborhoodgeneratedplan that offered both a processof communityorganizationand a setof goalsfor the community.It setboundariesfor institutionaldevelopment and portal areasand focusedon revitalization, transportation,and continued joint planning. It createda CDC, the Oakland Planning and Development Corporation(OPDC), to carry out neighborhooddevelopment.During the 1980sthe Oaklandplan guideddevelopment,with the CDC working on residentialdevelopmentandtheuniversityworking on expansionwithin theboundaries establishedby the plan. University-communityrelations finally had calmeddown. Oaklandand other Pittsburghneighborhoodscontinuedto receivestrong supportfrom Pittsburgh'snext mayor,RichardCaligiuri. He promoteda second downtownrenaissance-Renaissance I largely rebuilt the downtownin the neighthe 1950sand early 1960s-anda more grassrootsrenaissance in borhoods(Lubove 1996). This focus brought dollars to the neighborhoods for infrastructureandphysicalimprovementsandseededthe capacityof community organizationsto becomedevelopmentspecialists(Jezierski 1990; Ferman1996). OPDC succeededin this environmentand built more than 200 units of affordablehousingin the 1980s(Phillips 2002). It securedfunds from national foundationsand other private and public sources,and found a developmentpartnerin an Oakland-based privatedeveloper.NationalDevelopment Corp. wasidentified with Pittsburgh'spolitical leadershipandhadcompleted large developmentsin the region. It becamea major developmentforce in Oaklandthroughpartneringwith OPDC to completevarious neighborhood priorities, building housing, improving the neighborhood'swesternportal, and working with the university (Barnes1991). During the 1980sa crisis eruptedin the region'ssteelindustryasthe city's industrial basecollapsed.More than 100,000jobs were lost between1980 and 1986, many in the hard-hit steel towns in the industrial Mon Valley (Deitrick 1999).The university turnedits attentionto this crisis and focused on regional job loss and economicrestructuring(University of Pittsburgh 1983).Pittsburgh'seconomicbasewas shifting to services,particularly technology, health,andeducation(Mitchell-Weaver1992).Its traditionalpublicprivate growth partnership,famed for the two Renaissanceprojects, representeda corporateplanningmodelfocusedlargely on real estatedevelopment (Ferman 1996; Sbragia 1990). As a major regional employer and researchinstitution, Pitt becamepart of an urbanregenerationagendastressing economicrestructuring(Sbragia 1990). Both Pitt, with biotechnology

34

DEITRICK AND SOSKA

and healthresearch,and CarnegieMellon University, with softwareand robotics, were centralto a new, state-financedeconomicdevelopmentproject, the PittsburghTechnologyCenter(PTC) (Allegheny Conference1984; City of Pittsburgh1985).Partof the university'sattentionto real estatemattersin the 1980scenteredon the PTC, locatedon the site of a former steelplant. In Oaklandthe university'srole was more limited during this period. It assistedOPDC in settingup a developmentloan fund to help completehousing andotherprojectsandacquiredkey boundarypropertiesto bankfor future use (Yeager2002). The university worked with National Developmenton several projects,including the Soldiersand SailorsMemorial Hall undergroundparking lot, SutherlandHall dormitory, andthe PTC (Barnes1991).Whenthe university was concernedwith the lack of hotel spacein Oakland, National Developmentbuilt the Holiday InnlUniversity Centerand later the Oakland! ForbesAvenueHamptonHotel, anothercomponentof the westernportal improvement(Barnes1991;Yeager2002). Though sharinga developmentpartner, the universityandthe CDC neversecureda partnershipto develophousing in Oakland,somethingthat somespeculatemight havehelpedto slow Central Oakland'scontinuedslide to absenteepropertyownership(Phillips 2002). Despitethe joint planning process,Oaklandwas not always involved in university real estateplans. As the 1980scameto a close, Oakland'stense community-institutionrelationshipflared once again as the university, the medical complex, and National Developmenteyed the historic buildings of Oakland'sCity Beautiful period for new expansion.2 Cooperation and Collaboration, After a Rocky Start By 1990 the accordbetweenthe university and the communityto engagein joint planning had weakened.Establishedleadersin both groups whofirst battled then brokeredrelationshipswith each other over two decadeshad movedon or steppeddown. ODI had becomelessactive with organizational and communitychanges,and a new chancellorlackedexperiencewith what had precededhim. The university had no formal mechanismsor seniorofficials in placefor working with the community, and relationswith both city and neighborhoodwere handledon an ad hoc basis.As the joint planning processstalled, so did the processof public-ization of the institution at the community level. As one university official noted, "in 1991 it wasn't that thoseties [university-community]had beensevered,but thoseties had atrophied" (McManus 2002). Central Oaklandhad also changed.The trend toward more rental propertiesthat beganin the 1950sacceleratedin the 1970s and 1980s. Studentrentersand absenteelandlords dominatedthe housing market,and housingconditionswere deterioratingrapidly. By 1990 only 16 percentof CentralOaklandresidenceswere owner-occupied(Dolan 1993).

THE UNIVERSITY OF PITISBURGH 35

The decadebeganwith a firestorm: the purchaseand razing of the Syria Mosque,a community treasurelocatedin Oakland'scivic centerarea.The university was effectively in competitionfor the building with itself, as the medical complex (later called UPMC) and the university soughtseparately to acquirethe property.The medicalsideprevailedandits developmentpartner, NationalDevelopment,purchasedthe building. Despitean eleventh-hour attemptto savethe building throughhistoric landmarkstatus,the politically connecteddeveloperobtaineda valid demolition permit two hours before the historic statusnomination.ThoughUPMC purchasedandrazedthe building, the communitytargetedits ire at the university and its secrecy. Two developmentsin 1992put joint planningbackon both the community and institutional agendas,and the attemptto producethe first university plan sincethe University MasterPlan of 1968 was abortedin 1971. First, the Syria Mosqueepisodeforced the university to realizethat it neededto restartits community outreachactivities anddevelopa clearand structuredapproachto communications(McManus 2002). The OaklandAgreementCommitteebecame the first in a seriesof formal and informal groupsto discussOaklandand university relationsand planning (seeTable 2.1). Second,the City of Pittsburgh, weary of reviewing institutions' plans on a project-by-projectbasis,required city institutions to submit for approval a masterspaceplan before any new constructionwould be permitted.Becauseof the requirementfor community participationin planning,the two changesbecameinterwoven(seeTable 2.2). The new chancellor,DennisO'Connor,assignedthe PlantUtilization and PlanningCommittee(PUP) of the university senateto the masterplanning task. PUP producedan initial masterplan in 1994, but the city's Planning Commissionrejectedit becauseit lackeda comprehensivehousingstrategy and transportationmanagementplan. Even without suchagreementon strategic planning, the university was on the move, having increasedstudent housingon campuswith the openingof a new dormitory, SutherlandHall, in 1992andnew buildings in which to relocatefraternitiesfrom North Oakland to the campus.3 This developmentstill was not enough:estimatesof demand for studenthousingfound a 2,200-bedgapbetweensupplyanddemand(Dolan 1993). Oakland residentscontinuedto press their concernsabout student housingand transportationissues.A year later the planningcommissionrevisited the 1994 plan and gave conditional approval,pendingthe developmentofthe housingandtransportationstrategies(Sajna1995;Wilds 2002). The communitywas pushingfor a commitmentto constructmore new student housingover the next four years,and PUP set up a subcommittee,the Community Input into the Master Plan (CIMP), to gain community input into the masterplanningprocess.Through its meetingsin the community, CIMP realized that the community wanted to discussmore than just the masterplan.

1995 Master Plan community input to plan Non-university development 1995 Oakland Housing Proposal 1997 Master Space Plan community input to plan 1997 Master Plan

Oakland's community organizations working with PUP and university

Community organizations and university; City-facilitated (grew from CIMP)

Coalition of Oakland's community organizations (grew out of/replaced CIMP)

Internal university administrative committee

City-led group, community organizations, university, institutions

Forum between university and Oakland organizations focused on university development impacting Oakland

Long-standing but little-used forum from Caligiuri era; community organizations, city, univerSity, Oakland institutions, Allegheny Conference on Community Development (corporate leaders planning group)

Community Input in the Master Plan (CIMP)

Oakland Agreement Committee (OAC)

Oakland Community Council (OCG)

Facilities Planning Committee

Oakland Improvement

The "Eli" Group

Oakland Task Force (OTF)

Became proactive late 1990s; Schenley Plaza and other institutional and noninstitutional developments in Oakland

"Two-block area" student housing and Sennott Square; ongoing university developments

Non-university development strategy (OIC) 1998 Oakland Improvement Strategy-housing, zoning, and public corridors

1994 Master Space Plan 1995 Master Space Plan 1995 Oakland Housing Plan 1995 Transportation Study

University senate subcommittee-faculty, staff, and administration

Plant Utilization and Planning (PUP)

Tasks/outcomes The Oakland Plan (inactive by early 1990s)

Composition

Oakland Directions, Inc. Community groups, city, university, institutions (001)

Planning group

Planning Groups in the 1990s

Table 2.1

36

University of Pittsburgh, City of Pittsburgh, Oakland groups University of Pittsburgh Facilities Planning Committee

1992

1994

1995

1995

1996

1997

1998

1998

1998

1999

Interim Planning Overlay District Proposal

Initial University Master Plan

Oakland Housing Strategy

University Master Housing Plan (revised)

Bigelow Boulevard Closing Proposal

University of Pittsburgh Plan: 1998-2007

Pitt Master Space Plans

University Comprehensive Housing Strategy

Oakland Improvement Strategy

Final Master Space Plan

Rejected by city Planning Commission

Reaction to demolition of Syria Mosque

Comments

University, City of Pittsburgh, Oakland groups

Oakland community partners, institutional partners, funders, and City of Pittsburgh

University with input from Oakland community

University Implementation Committee

Revised 1999-2000 to meet Planning Commission stipulations

Action plan for Oakland, focusing on design and zoning, created Oakland Business Improvement District (OBID)

Updates master plan to include new student housing on two-block area

Revisions of 1995 plan; integrated space and ademic plans

Plans for two-block area include mUltipurpose facility and new student housing

Reopened after six-month trial period

University Plant Utilization and Planning Received conditional Planning Commission approval Committee, university administration

Oakland Agreement Committeeuniversity and Oakland groups

University of Pittsburgh administration

City of Pittsburgh Planning Department and Oakland resident groups

1992

Participants City of Pittsburgh-City Council

Date

Plans/proposals

Oakland Historic Core

University of Pittsburgh and Oakland Community Plans in the 1990s

Table 2.2

37

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DEITRICK AND SOSKA

ThePUP/CIMPprocesscreatedchangein both the universityandthe community. The university beganto realize that the community was more than one or two vocal organizations,and it neededa processto "institutionalize community input" (Jones2003). Likewise the community beganto see a decentralizeduniversity and had to act differently than when dealing with one or two individuals.To bridgethesegaps,university and communityrepresentativesformed the OaklandAgreementCommittee(OAC). Reminiscentof the old ODI, city planningofficials facilitatedthe discussions,centered on housingand transportationissuesabsentfrom the 1994 masterplan. As OAC set out its housingpriorities, the group meldedinto the OaklandCommunity Council (OCC), a more formal organizationwith more community members.The university and OCC continueddiscussionsabout university planning, particularly the studenthousing issue (OAC 1995). Dissatisfied with the paceof the university'splans, somecommunity membersfelt the processwas failing and they left. In 1995 the university was instructedby its Board of Trusteesto begin a ten-yearfacilities plan, a comprehensive review of all capital priorities of the university on its campuseswith short-, medium-, and long-term priorities and their costs spelled out. The provost soughtto insure that the facilities plan was guidedby the university'sacademicplansto ensurea strongrationale for funding and long-termsuccess.The plan, completedby senioradministration,laid out $362million in capitalprojects(Steele1996;University of Pittsburgh1997). In 1996, one year beforethe final report, the committee reviewedthe plan with internal and externalsources.For externalreview the city andOCC providedinput into the plan, especiallyregardingstudenthousing issuesand other issuesfocusedon Oakland. In the university'sFacilitiesPlanapprovedin 1997,the long-disputedtwoblock area would be developed,with a multipurposeacademicbuilding (MPAC), a convocationcenter(later sited elsewhere), and new studenthousing, which becamethe university'schief building priorities in the latter half of the 1990s(University of Pittsburgh1997). Resourcesremainedthe sticking point until the state committed $135 million over five years for Pitt's facility projects(Barnes1998).Combinedwith a capital campaignandother funding reserves,the university now had the resourcesto realize its plans. Community oppositioncontinued,however, as the time frame for development remainedunconfirmed.The university, on the other hand, was singleminded in its commitmentto pressforward and implement its plans. The needto reinvigoratethe university-communityrelationshipbecamean importantpart of the implementationprocess,including maintainingcontinuity of relations and engagingsenior administrationin this dialogue (Golomb 2002; McManus 2002).

THE UNIVERSITY OF PITISBURGH 39

During this periodthe university underwentanotherchangein leadership, asDennisO'ConnorresignedandMark Nordenbergwas appointedchancellor in 1995.4 Nordenbergreceiveda mandatefrom the Board of Trusteesto expandthe university's involvementin regional economicand community development,especiallywith neighborhoodson the university'sborders(University of Pittsburgh1996; Wilds 2002). Promoting communityquality of life in Oaklandbecamean importantpart of the university'stransformation into a public institution. Oakland also remainedon the city's agendaas the city sought another planningprocesswith communityandinstitutionalparticipation.Ratherthan updatingthe 1980 ODI-producedplan, the OCC decidedto focus on three areasraisedby OAC: housing,zoning, and public corridors.With financial supportfrom the institutions and the city, the group producedThe Oakland ImprovementStrategy(FocusCommunications1998). The university took a major role in implementingdimensionsof the strategyby helping to fund a newOaklandBusinessImprovementDistrict (OBID), contributingto OPDC's developmentfund, and sharingthe costswith the city of a building inspector assignedto Oakland(FocusCommunications1998). Just after assumingoffice the new chancelloroversawyet anothercommunity imbroglio. The university proposedclosing Bigelow Boulevard, a main thoroughfarethrough the central campus.The city agreedto the closure,but the communitysaw the closing as anotheruniversityland grab.The university was allowedto closethe boulevardfor a sixty-daytrial period,but it was subsequentlyreopenedby the city. In private, many residentssupportedthe closing as pedestrianfriendly; but publicly they felt that "the University shouldnot be allowed to move forward with what it wanteduntil the communitygot what it wanted," which was studenthousingon campusand improvedtransportationmanagement(McManus 2002). In accordancewith the 1997 facilities plan'spriorities, the university revisedits housingstrategyand finally satisfiedthe community'sdemandsfor immediatehousing construction(University of Pittsburgh 1998a; 1998b). The constructionof the first phaseof new housingreceivedhighestpriority, at a cost of $5.3 million for the initial phasescheduledto open in 1999. BouquetGardens,as the project becameknown, would house500 students in garden-styleapartments.The university finally realizedthat key to completing any projectsin the future would be the passageand constructionof new studenthousing. After the missteps notedabove,the university againrevampedits procedures to work with the community. ChancellorNordenbergappointedEli Shorak,underthe vice chancellorfor businessaffairs, to serveas the point personwith the communityon constructionprojects.A relative "new kid on

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DEITRICK AND SOSKA

the block," Shorakhad no "baggage"with the community,but lackedexperience in community and city planning (Garvey 2002; Shorak 2002). His mandatewas "to get thosebuildings built" (Shorak2002). Thoughinexperienced,he learnedfrom university personnel,communityrepresentatives, and city officials. He spoke directly with and for senior administrationin his relations with the community and the city, and unlike previouscommunity liaisonsShorakwas able to makecommitmentsfor the university. The community had neverhad this level of coordinationwith the university (Shorak 2002; McManus 2002). Community input on the former two-block projects included design changesandparking.The facadesof BouquetGardenswereredesignedto fit the neighborhoodcontext, and studentresidentswere bannedfrom the residentialparkingprogram.Communityneedsfor short-termparkingwerebuilt into the new multipurposebuilding. The Oakland ImprovementStrategy stressedthe needfor improvementsin the ForbesAvenuecommercialcorridor, andMPAC addressed theseconcernswith designsfor 18,000squarefeet of retail space.5 The university also had to deal with the contentiousprocess of relocatingcommunityorganizationsfrom the two-blockareato otherparts of the neighborhood.OPDC,OCC, andOBm movedinto auniversity-owned building that OPDC now owns. The university alsohelpedPeople'sOakland purchasea building for its useby donating$100,000toward the purchase. By the end of the decade,the university had learnedto sit with its neighbors. Shorakand OCC met biweekly to discussthe university'sreal estate concernsso that the community would have a regular dialog and input on issues.The group, dubbedthe "Eli meeting,"representswhat informal channels can achievethroughregularcommunications.The group had input into designchangesof BouquetGardensandMPAC, now calledSennottSquare. The meetingscontinueto addressimportantissuessuchas problematiclandlords, codeenforcement,and zoning. In 2001 the university moved its football gamesto the new Heinz Field, homeof the PittsburghSteelers.It razedPitt Stadiumfor the constructionof a new convocationcenterthat was formerly plannedfor the two-block area. This upper campusdevelopmentopenedup spacefor a new dormitory for 1,000 students,and the plan was supportedby the community.While many alumni and businessowners opposedthe move, the university was doing what the PittsburghRegional PlanningAssociation plan for Oakland had called for in 1961-butthen they were looking to move Pitt football to the then newly proposedThreeRivers Stadium. Not all disputeshavebeensettledor settledamicably. Despitenew dormitory space,the persistenceof studentovercrowdingand absenteelandlords meanshousingconditions continueto deterioratein CentralOakland.6 Some

THE UNIVERSIlY OF PITISBURGH 41

residentsremain suspiciousof any movesby the university, given their long history, and one Oaklandleaderfelt the university is "not going to tell you anything" about any real estateproject (Potts 2002). Nonetheless,over the decadethe joint planningprocessbetweenthe university and the community emergedstrongerthanit had beenin the early 1990s.The university now participatesin yet anotherOaklandplanningprocess,the OaklandTask Force, a formal organizationthat is implementingthe OaklandImprovementStrategy. The taskforce aims to restoreOaklandas a "showplace,"with its City Beautiful roots. The university will be a major investorin the public projectsof this effort. In additionthe university wasa recipientof a U.S. Departmentof Housing andUrbanDevelopmentCommunityOutreachPartnershipCenter(COPC) grantin 2000to work with communitypartnerson revitalizationefforts throughout Oakland.The public-izationof the University of Pittsburghhasmatured.

University-CommunityPartnership:Sitting with Neighborsin the New Millennium We find two main themesaffecting university and communityplanningand its changes:the university'sadaptationto its role as a newly public institution-its public-ization-andthe evolution of the planning processin both the Oaklandcommunityand university, which beganin reactivemodesduring the period of conflict andconfrontation.The university found itself in an unfamiliar public role and opposedby growing community activism as it tried to expandin the Oaklandcommunity.Conflict and confrontationled to a city- and state-brokeredjoint planningprocessthat grew into a more collaborativeinitiative in the yearsthat followed. The communitywas learning to plan for its future developmentwhile the university was learning to be a public partnerin planningwith its neighbors. Leadershipchangesin both the communityand the university resultedin new contentionsand the need to revisit the joint planning processin the 1990s.After somerocky yearsthe universityestablishedmoreeffectivestructuresfor communicatingandworking with the community.A new processof city planning required greater publicinput into the university'S plans and resultedin some community needsbeing met. The university now targets investments withbenefits for both university and community, and participatesin the communityplanning processwith greatercommitment,including financial support.Looking backon the original plansfor Oakland,many of the earlier visions for the University of Pittsburghhavecometo fruition, but it was not just real estatedevelopmentthat changed(Dolan 1993). The changingplanningprocessprovedto be significant in transformingthe university into a public institution.

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The University of Pittsburgh,like many urban universities,has matured andrecognizedthat the universityandthe communityareinextricablylinked. As the university cameto understandthe practicalnatureof communitypolitics, recognizingand respectingthe processof community problemsolving and the political power of the community, it was able to assumea broader communitydevelopmentrole. The 800-poundgorilla has learnedto support and engagein collaborativeplanning through university-communitypartnershipsforged over four decades,and the University of Pittsburghnow sits with, not on, its Oaklandneighbors.

Notes 1. Pitt was quotedas sayingthe university was not involved in propertyacquisitions or negotiationswith property owners (Spatter 1969). However severalinformantsdisputedthat statement,claiming that the university hadfront peopleworking for them. The processspedup speculationin the neighborhood,either waiting to be acquiredby the university through the GSA or holding propertiesfor depreciation cyclesand swappingwith otherlandlords(Phillips 2002). 2. LocatedbetweenO'HaraStreetandFifth Avenue,theseinstitutionswere noted muchearlierby the PittsburghRegionalPlanningAssociation(1961, 18), which recommendedthat shouldtheseinstitutions wish to leavetheir building, "reuseshould be by the University of Pittsburgh." 3. The university'Srequestfor approvalfor the SutherlandHall dormitory gained approvalfrom the city's PlanningCommission,but after that all city institutionswere requiredto havean official masterplan in placebeforeadditionalconstructionprojects would be approved. 4. Nordenbergwas first appointedinterim chancellorin 1995; his appointment was madepermanentin 1996. 5. This was the spacedevotedto communityusesin the two-block area.Now the communitywantedretail to improve the commercialcorridor and placethe community groupsin new locations. 6. Absenteelandlordsandpropertyspeculationcontinueto increasein Oakland. A University of Pittsburghneighborhooddevelopmentclassdocumentednearly two decadesof propertyswapsby a core group of absenteelandlords(Feathers2001).

References AlleghenyConferenceon CommunityDevelopment.1984.A strategyfor growth: An economicdevelopmentprogramfor the Pittsburgh region. Pittsburgh:Allegheny Conferenceon CommunityDevelopment. Barnes,Tom. 1998. Oakland residentsopposePitt expansion.Pittsburgh PostGazette,January22: A9. - - - . 1991. Spotlight plays on Oaklanddeveloper:Mosquedisputeraisesfirm's low profile. PittsburghPost-Gazette,April 25: 6. Bender,Thomas.2002The unfinishedcity: NewYork andthe metropolitanidea. New York: The New Press. Breachler,Edwin. 1958. Here's how Oakland'sface is changing.Pittsburgh Press, December14: 2.

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CarnegieMuseumof Art. 2002.DesigningOakland.HeinzArchitecturalCenter,Pittsburgh, June22-September 22. City of Pittsburghand Allegheny County. 1985. Economicdevelopmentstrategyto begin 21stcentury: A proposalforthe Commonwealthof Pennsylvania. Coyne,Mike et al. 1974.Oaklandresidentsunderstress,organizedfor survival. New Sun, Pittsburgh,March 13-26: 1. Deitrick Sabina. 1999. The post-industrialrevitalization of Pittsburgh: Myths and evidence.CommunityDevelopmentJournal 34(1) (January):4-12. Dolan, Anthony. 1993. CentralOakland:Winning the battlesbut losing the war. Unpublishedmanuscript,GraduateSchool of Public and InternationalAffairs, University of Pittsburgh,April. Dunlop, Beth. 1973. Pitt, residentsbegin new era of cooperation.Pittsburgh Press, October1: 4 Faust,William. 1963. PantherHollow project. PittsburghPress,November24: 7-8. Feathers,Ruth. 2001.MeyranAvenue.Pittsburgh:University of Pittsburgh,Graduate Schoolof Public and InternationalAffairs, February. Ferman,Barbara.1996. Challenging the growth machine.Lawrence:University of KansasPress. FocusCommunications.1998. The OaklandImprovementStrategy, vol. 2, appendices.Pittsburgh,PA, December. Garvey,Martha.2002.Personalinterview. President,OaklandPlanningandDevelopmentCorporation,September18. Gittell, Ross, and MargaretWilder. 1999. Community developmentcorporations: Critical factors that influencesuccess.Journal of Urban Affairs 21(3): 341-361. Golomb, Susan.2002. Personalinterview. Director, Departmentof City Planning, City of Pittsburgh,September16. Hart, Peter. 2000. The two-block area. University Times. University of Pittsburgh, March 16: 9-12. Jezierski,Louise. 1990.Neighborhoodsandpublic-privatepartnershipsin Pittsburgh. Urban Affairs Quarterly 26(2): 217-249. Jones,Robin. 2003.Personalcorrespondence. FormerDirector,UrbanStudiesProgram, University of Pittsburgh;now at University of SouthFlorida, Tampa,April 25. Kobosky, BernardJ. 1974.Institutional/communityrelationsin an urbansetting:The University of Pittsburghexperience.Ph.D. dissertation,University of Pittsburgh. - - - . 2002. Personalinterview. ExecutiveVice President,Public Relations,University of PittsburghMedical Center,July. Lorant, Stefan. 1978. Pete: The life of PeterF. Flaherty. Lenox, MA: Authors' Edition, Inc. Lowry, Patricia. 2002. Places:In Oakland,a lust for land and a penchantfor plans. PittsburghPost-Gazette,June29: C6. Lubove, Roy. 1995. Twentieth-centuryPittsburgh: Government,business,and environmentalchange,vol. 1. Pittsburgh:University of PittsburghPress. - - - . 1996. Twentieth-centuryPittsburgh: The post-steelera, vol. II. Pittsburgh: University of PittsburghPress. Lurcott, RobertH., andJaneA. Downing. 1987.A public-privatesupportsystemfor community-basedorganizationsin Pittsburgh.Journal of the AmericanPlanning Association53: 459-468. McManus,Dennis.2002.Personalinterview. ExecutiveDirector, Instituteof Politics, University of Pittsburgh,July 24.

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Mitchell-Weaver,C. 1992.Regionaldevelopmentin southwesternPennsylvania.Canadian Journal ofRegionalScience15(2): 131-146. OaklandAgreementCommittee(OAC). 1995.A proposalfor a housingstrategyfor Oakland. Pittsburgh,September26. OaklandDirections,Inc. (ODI). 1980. The Oaklandplan: A citizens'planning process.Pittsburgh:OaklandDirections,Inc. and Urban DesignAssociates. Phillips, SandraL. 2002. Personalinterview. Vice President,ManchesterBidwell Corporation,Pittsburgh,July. PittsburghRegionalPlanningAssociation(PRPA). 1961.A planfor Pittsburgh'scultural district, Oakland. Pittsburgh:PittsburghRegionalPlanningAssociation. Potts,Jonathan.2002.RevitalizingOakland:A toughtestof universities,community. PittsburghTribune-Review,July 5: AI. Roling, Jay.2002.Personalinterview. CommunityandGovernmentalRelations,University of Pittsburgh,July. Sajna,Mike. 1995. City PlanningCommissionapprovesuniversity masterplan, but addsseveralstipulations.University Times27(17): April 27: 7. Sammons,Amanda. 2002. Chancellor,mayor, others dedicateSennottSquare.Pitt News, University of Pittsburgh,September6: 2-4. Sbragia,A.M. 1990.Pittsburgh's"third way": The nonprofit sectoras a key to urban regeneration.In Leadershipand urban regeneration:Cities in North Americaand Europe,ed. DennisJuddandMichaelParkinson,vol. 37, pp. 51-68. Urban Affairs AnnualReview.Newbury Park, CA: Sage. Shaw,PaulC. 1973. Truth, love and campusexpansion:The University ofPittsburgh experience.Pittsburgh:University-UrbanInterfaceProgram,June. Shorak,Eli. 2002.Personalinterview.AssociateVice Chancellor,University of Pittsburgh,August. Spatter,Sam. 1969. New expansionby Pitt year off, Posvarsays.Pittsburgh Press, January11: 2. - - . 1992.City plannersseekgreatercontrol overfuture developments.Pittsburgh Press, February16: H16. Steele,Bruce. 1996.New building, renovationplan proposedfor campus.University Times29(1): August29: I. for southwesternPennsylvania's University of Pittsburgh. 1983. Recommendations regional developmentstrategyfor the 1980sand 1990s: University of Pittsburgh chancellor'sconferenceproceedings,Pittsburgh. - - - . 1996. Partneringin community development.Resolutionof the Board of Trustees,University of Pittsburgh,February22. - - - . 1997. University of Pittsburghfacilities plan: 1998-2007.Pittsburgh:University of Pittsburgh,April. - - - . 1998a.UniversityofPittsburgh: Comprehensive housingstrategy.Pittsburgh: University of Pittsburgh,June. - - - . 1998b.UniversityofPittsburgh: Comprehensive housingstrategy.Pittsburgh: University of Pittsburgh,August. Wilds, John. 2002. Personalinterview. Community and GovernmentalRelations, University of Pittsburgh,June. Yeager,John. 2002. Personalinterview. AssociateProfessorand Director, Institute for Higher EducationAdministration, School of Education,University of Pittsburgh,August.

3 Columbia University's Heights An Ivory Tower and Its Communities Peter Marcuse and Cuz Potter

Columbia University is one of the three largest landownersin New York City, after the Catholic Churchand the city governmentitself (seeMap 3.1). In its role as owner and investor in real estate,the university has acted no differently than any other landowner: it has investedin real estatefor its financial return. In its role as a major institution, Columbiahas interestsno different from any other institution: to meet thespatialrequirementsthat its own activities determine.Here it is similar to a profit-motivated business entity in having to meet its own needsfor spaceand location, but differs from them, as doesa museumor a hospitalor a church,in that its bottomline is measuredin terms other than dollars. In a numberof ways, however,Columbia,as a university, differs from all of theseotherprivate and nonprofit entitiesin relation to its real estateinterests.First, becauseits coreactivitiesinvolve the long-termpresenceof young people, often away from home for the first time in their lives, it is an acceptedobligation of the university to take care of their accommodations, and, if not in loco parentis, to provide for their securityin a fashion at least adequateto maintainthe desirability of the institution as a placefor othersto requestadmission.Its role in providing housingfor its faculty, while perhaps seemingto be intuitively similar, is in fact no different from the role of any large employerseekingto attractand hold employeesin its service.1 Second,becauseits core activities involve young peopleat a high educationallevel, generallywith wide-rangingcuriosity and sympathies,and becauseits faculty is likely to have within its ranks many interestedin issues of social policy and equity and attentive to issuesin their surroundings, what a university doesthat affectsthosesurroundingsis likely to engagethe attentionof its membersand influenceits policy. Third, becauseof its scale Columbia has a greaterimpact on its residentialsurroundingsthan almost any other nonprofit or single profit-making landownerin the city. 45

MARCUSE AND POlTER

Map 3.1

Columbia University and Selected Affiliates' Properties in Northern Manhattan

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Source:Data from the New York City Departmentof PlanningPLUTO database.

COLUMBIA UNIVERSITY'S HEIGHTS 47

A fourth way that Columbia is different from most other institutions, whetherpublic, nonprofit, or private, is in the location of its two northern Manhattancampusesnext to lower-incomecommunities.The main campus in MorningsideHeights is adjacentto Harlem, an overwhelminglyAfrican American community that has long beenan icon of African American life, while the Health SciencesCampusin WashingtonHeights is in the centerof a vibrant, predominantlyDominican community. These two communities differ, however, intheir senseof permanence.The historical significanceof Harlemto theAfrican Americancommunityhascreateda senseof rootedness and place, while WashingtonHeights is perceivedby somemembersof the Dominican community as a temporarybaseof action from which to amass the capital necessaryto returnto a comfortablelife in the DominicanRepublic or acrossthe river in New Jersey. Three important threadsaffecting Columbia University's development activities are of particularinterestto us here: (1) its concernwith meetingits own institutional needsby first housing its studentsand faculty and then providing spacefor university-relatedeconomicactivities; (2) the involvement of those students(and some faculty) in issues dealing with the university'srole in the community; and (3) the reactionsof the surrounding poorercommunitiesto the university'Sreal estateactivities. Thoseconcerns run throughoutthe evolution of Columbia'spolicies toward development and arise in roughly chronologicalorder. This chapterdoes not deal with Columbiaas a real estatedeveloperor investorper se, wherethe motivation for the university'sactionsis profit as a property owner/landlord?although the profit-making motivation entersstrongly into its desireto expandits biomedical facilities, nor with other aspectsof the university-communityrelationship, also interesting.3 The Evolution of Community Relations

When ColumbiaUniversity movedfrom the currentsite of RockefellerCenter in 1897 to the property that it had purchasedfrom the Bloomingdale InsaneAsylum on Morningside Heights, that neighborhoodwas relatively undeveloped.Other institutions soon followed: TeachersCollege, Barnard College,the Union TheologicalSeminary,the Institute of Musical Art (now the Julliard School), and the JewishTheologicalSeminary.When the subway finally reachedthemin 1904,the neighborhoodwasrapidly transformed into a middle-classapartment-houseneighborhood.Morningside Heights remainedmiddle-classuntil the endof World War II, whenlow-interestmortgageswere introducedthroughfederal legislationand middle-classfamilies begantheir exodusto the suburbs.The vacuum left behind was filled by

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African Americans,who were moving into northerncities at the time, and Puerto Ricans, who were beginning to migrate in large numbers.The low rents,building deterioration,and presenceof SROs(single room occupancy buildings) also attractedelementsconsideredundesirable,such as drug addicts and prostitutes. To counteractthe negativeimpact thesedevelopmentswere expectedto have on their primarily white and middle-classconstituents,the institutions in the neighborhoodbandedtogetherin 1947 to form MorningsideHeights, Inc., now called the MorningsideAlliance. Their chief objectivewas to halt the "encroachmentof Harlem" (by which they meantthe spreadof the slums from predominantlyAfrican American and Puerto Rican Harlem and Manhattanville,now West Harlem) by upgradinghousingconditionsin the neighborhood(Dolkart 1998, 329). Contemporaryreal estatepressures,followed by urban planning wisdom and supportedby federal funding provisions, advocatedurbanrenewal-thetechniqueof the wholesaledemolition of buildings in designatedslum areas,most often withoutany provisionsfor the relocationof their previouslow-incometenants-andthe constructionof grandnew developmentsthat were to revitalize the areas(Schwartz1992). Morningside Heights, Inc. subscribedto the planning logic of its day. Among its projects,in 1951 the institutional allianceundertookthe sponsorship of Morningside Gardens, aslum-clearanceproject that replacedtwo blocks of older residentialbuildings north of 123rd StreetbetweenBroadway andAmsterdamwith a subsidizedmiddle-classhousingcooperative.In conjunction with this construction,the New York City Housing Authority initiated a low-income, urban renewal-basedpublic housingproject of ten high-risebuildings acrossAmsterdamto the east.The combinedeffect of the buildings completedin 1957 was to wall off, visually if not literally, MorningsideHeightsfrom Harlem to the north. ColumbiaUniversity appearedto follow a similar approachto stanchthe deteriorationof housingandincreasingracial changeoccurringto the south, east,and west of its main campus.After a dozenscatteredpurchasesin the late 1950sand very early 1960s,in 1962 the university beganaggressively purchasingbuildings between112th and 119thstreetsto expandits facilities throughclearanceand reconstructionas an EastCampusand a SouthCampus. At an early stagein the processthe university implementeda policy of purchasingthe thirty-threeSROsthat existedto its west in 1961 for conversion or demolitionto "rid the areaof the objectionablefeaturesof theseproperties" (ColumbiaUniversity 1979,AppendixA, 2). The university andlocal institutions perceivedthesebuildings as havensfor alcoholics, prostitutes, and drug addicts,therebycontributingto blight (Dolkart 1998, 333). In the 1960s the university purchasednine buildings, convertedfive of them for

COLUMBIA UNIVERSITY'S HEIGHTS 49

other uses,and tore down four. By 1979 it had purchaseda total of twentythreebuildings and torn down at leastnine.4 New York City tenancy laws, while protecting the rights of residential units and forcing Columbia to adopt a strategyof slowly turning over vacatedapartmentsto university affiliates, madeit relatively easyto evict SRO tenantswhosetenancythe laws did not protect.The displacementof an estimatedtotal of 6,800residentsbetween110thand 115thstreets,mostof whom wereAfrican Americanand PuertoRican, was a major ingredientin the ensuing political battle againstthe university's perceivedheedlessness about its impacton the local community(Kahn 1970,88). The battle was fueled by four factors: 1. The universityclearedthe propertiesbetween116thand 118thstreets andAmsterdamand Morningsideand constructedits EastCampus there. 2. Political activism was surgingin the city and acrossthe nation. 3. MorningsideHeights, Inc. took a limited proposalfrom 1966 and expandedit into a plan for the wholesaleredevelopmentof all midblocks from lllth to 116th streetsand from Riverside Drive to MorningsideDrive. 4. The precipitatingevent was Columbia'sefforts to build a gymnasium in MorningsidePark, a public park at the edgeof Harlem, that would allow only limited accessby Harlem and non-Columbia MorningsideHeights residents. Theseefforts galvanizedthe local community and the studentbody, culminating in massiveprotestsand the occupationof university buildings in the spring of 1968 by studentsopposedto the university'spolicies.The situation was eventuallybroughtundercontrol only by calling in the New York City PoliceDepartment.Theseeventsjolted the universityinto an awareness that the communitiessurroundingits campusesmustbe takenseriously,leading to an abandonmentof the gymnasiumandthe SouthCampusproposals, a virtual moratorium on property acquisitions,and a policy of keeping a much lower profile in the community.5 The universitybeganto look for alternativesandcommissioned1. M. Pei's architecturefirm to preparea new masterplan to addressthe university's housingand spatialdemandswith developmentcontainedon the main campus. In 1970Pei proposedseveralinnovativeundergrounddevelopmentsand two enormousdormitory towers on the existing campus,which were never built. Housing becameincreasinglyscarceas the decadewore on. In the wake of the New York City Departmentof City Planning's1971 UpperWest

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Side DevelopmentPlan, and perhapsthe university'sown real estateactivities, MorningsideHeightsunderwentgentrificationand becamemore desirable to middle-classresidentsnot affiliated with the university. The housing crisis wasexacerbated by the university'sconversionof someresidentialunits to nonresidentialuses,the increasingsize of the studentbody, the growing desirability of university housingto students,and an informal commitment madeeffectivein 1975 to guaranteeuniversityhousingto all incomingfreshmen. All thesefactors combinedto producean ongoing housing crisis in which commitmentsto provide housingfor undergraduates were brokenin the late 1970s. This eventand growing faculty frustration over housingtriggereda spate of introspectivestudiesand a new masterplan. This new plan (preparedby Abeles, Schwartz, Hackel and Silverblatt in 1981-82) redefined the university'sconceptof the "maximum return" on its investmentin housing and the commercialspacesthat were often locatedon the first floors of its buildings. Although the Office of Institutional Real Estatereportedin 1979 that "Maximum return on investmentis not the primary objective in either the acquisition or maintenanceof thesebuildings" (emphasisin original), the RosenthalReportpreparedin 1980statesthat thesebuildings were "consideredpart of the University'S investmentportfolio and [were] expectedto generateincome" (ColumbiaUniversity 1980, 10).6 Supportingthe RosenthalReport'sfindings, other documentsreport that the real estateoffice obtainednet return on equity ranging from 3.2 to 6.9 percentfrom 1973 to 1978 (Columbia University 1979, 8). The financial teamthat assumedoffice in 1978 viewed thesereturnsas too low, however, and aggressivelyincreasedthe rentson university-ownedhousingunits (Columbia University 1983,Appendix 1,3), averagingover 11 percentannually from 1979 to 1981 (ColumbiaUniversity 1983,7).Commercialspaceswere also expectedto provide a positive revenuestreamand were leasedwith an effort to maximizerents (Abeles 2003; ColumbiaUniversity 1979). Consequently establishmentswere not gearedprimarily to provide optimally for the needsof studentsand faculty. Ironically the new plan, which was developed in completesecrecythrough a series of meetingswith a handful of selectuniversity representatives to avoid the "intramural sports"of community participationthat had hamstrungearlier plans, was to prove more conducive to communitydevelopmentthan any otherplan to date. The 1982 plan had four featurespertinentto this study. First, it recommendeda "deck of cardsplanning system" in which the university picked the randomlydealtcardsup off the table (i.e., buying propertiescheaplyand quietly as they becomeavailable) and then consideringhow thosecardsfit into its hand(theuniversity'sbroadplan).The secondfeaturewasthe argument

COLUMBIA UNIVERSIlY'S HEIGHTS 51

that the university could measurethe returnon its propertiesonly in termsof its true bottomline-educationandresearch.Consequentlyit suggestedthat the university acceptlower ratesof cashreturnson its commercialproperties and rent them to tenantswhosebusinesseswould provide for the needsof university affiliates andcreatethe environmentnecessaryto attracttop-notch faculty andstudents.Third, the planrecommended streetscapeimprovements, especiallyto the medianstrips on Broadway.The final feature was the creation of a technical assistanceoperationto assistlocal property owners in expandingor renovatingtheir properties.This ideawould servethe dual purposesof anticipating political opposition and further improving the local housingstock. Thesefour core recommendations reflecteda growing trend in institutionalplanning,which hadabandonedthe grandreconstructionplans of urbanrenewalandreplacedthem with smallerinterventionsthat provided amenitiesto improve the quality of life for both university-affiliatedindividualsandthe communityat large(EducationalFacilitiesLaboratories1980). The university steadilyimplementedtheserecommendations in the 1980s and early 1990s, a period of little new constructionand much renovation. The area'sappearance wasimprovedby upgradingthe medianstripson Broadway with new plantingsandbenches,by harmonizingthe facadesof its commercial spaceson Broadway,andby bringing in a significantnumberof new commercialtenants,includingrestaurantsandcafes,bookstores,a video rental and record store, a sporting goodsstore, and othersthat accordwith the results of surveys of university affiliates. The university also has remained committedto instituting avenuesof communicationto balancethe needsof the university with the desiresof the community, including the preparation of a Frameworkfor Planningdevelopedin conjunctionwith severalcommunity membersto guide university development. Sincethe mid-1990s,spatialpressuresfor housingand offices have triggereda steadyflow of new constructionand propertyacquisitions?None of the new building proposalswas well receivedby the community,however,in part becauseof the building designs.Using the developmentrights permitted to it underNew York City zoninglaw, the university hasbuilt or is building at least three 17- to 19-story residential buildings above 116th Street in the middle of blocks, far taller than and out of characterwith surroundingbuildings. Most of the new buildings meethousingdemands,thougha new businessschoolbuilding andlaw schoolextensionhavebeenbuilt on Amsterdam Avenue at 115th and 116th streets,and a building for the School of Social Work is underconstructionat 122ndStreetand Amsterdam.The university hasbegunto extendits reachsouthof 112th Streetwith the developmentof a 12-storybuilding that will housefaculty and a private K-8 schoolthat the university hopeswill help attractkey faculty. The university has discussed

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proposalsextensively with the community groups and residentsand has striven to balancethe needsof the community with its own internal demands.For instancethe university has statedthat the new K-8 school will serve children from the wider community in addition to the children of Columbiaaffiliates, and the university is, at no charge,renovatingtwo adjacenthistoric buildings that will be usedfor housingfor nonaffiliatesof Columbia(Marshall 2001). The 1982 developmentstudy also madesimilar recommendations for revitalizing theWashingtonHeightsneighborhoodsurroundingthe HealthSciencesCampus,which was experiencinga different type of spatialpressure. The plan recommendedpushingthe campuseastwardacrossBroadwayto incorporatefour blocks on the west side that the university alreadyowned, and went even further to boldly encouragethe university to actively purchaseall propertieswest of Broadwayto createa "river to river community" (Abeles2003). The university chosenot to adoptthis aggressiveexpansion, however,perhapsout of sensitivity to the surroundingcommunity.The other major proposalscontainedin the WashingtonHeightsstudy paralleledits recommendationsfor the MorningsideHeights campus:upgradethe streetscape andimprovethe retail mix aroundthe campusto provide then-lackingservices andamenitiesfor the affiliated andnonaffiliatedcommunityandgeneratestreet life that would revitalize the area(Wiener2002). The Audubon Biomedical Scienceand Technology Center

At the Health SciencesCampus,the early 1980s saw two major developments that added significantly to the university's desire for spaceand its ability to attractresearchersand funding. First, the Bayh-DoleAct passedin 1980 allowed academicandresearchinstitutionsto licenseand commercialize the discoveriesof their researchers.Both universitiesandthe researchers they employedand hopedto attractperceivedthis potential commercialization of technologiesto be a significant sourceof revenue.The secondmajor developmentwas the suddenrise of biotechnology.Sincemajor discoveries in molecularbiology during the 1970s,the biotechnologyfield has grown at an incrediblerate and the numberof biotechnologypatentshasincreasedat an exponentialrate. The annual number of new biotechnologypatentsincreasedfrom 1,265 in 1977 to 8,374 in 1997. Predictionsbasedon current growth ratesindicate there will be a "daily doubling of knowledge" in the biotechnologyfield (i.e., numberof new patents)by the year 2016 (Oliver 2000, 56-59). For Columbia University the developmentof a commercialbiotechnology incubatorin proximity to the Health SciencesCampusbecamea major

COLUMBIA UNNERSIlY'S HEIGHTS 53

priority. Without an incubatorthe universityfearedit would loseits researchers and consequentlyits funding. The funding for scientific researchin the biotechnologyfield is supplieddirectly to researchersassociatedwith various researchinstitutions by the National Institutesof Health (NIH), one of eighthealthagenciesof the HealthSciencesServicesin the U.S. Department of Health and HumanServices.Most universities,including Columbia,supply little funding to their researchersdirectly; the researchersmust finance the bulk of their researchthroughtheseNIH grants.The university depends on thesefunds to supportits laboratoryinvestmentsandexpandits capabilities andmustthereforeattractresearchers who canobtainthis funding. Since the Bayh-Dole Act and subsequentsuccessstories-includingColumbia University's Richard Axel, founder of Sentigen-topresearchersnow demandthe availability of incubatorlab spaceto commercializetheir discoveries.Already in crampedquarters,Columbianeededto expandits Washington Heights facilities (Gipson2002). WashingtonHeights, centeredon 168th Street,is situatedat one of the highestand narrowestpoints on the island of Manhattan.Always an immigrantneighborhood,WashingtonHeightshasbeenthe homeof GermanJews in the 1930s;PuertoRicans,Cubans,Haitians,Koreans,andRussiansin the 1940s,1950s,and 1960s;and Dominicanssincethe 1980s. Perhapsthe most prominent landmark on WashingtonHeights is the AudubonBallroom, locatedat the centerofthe neighborhoodbetween165th and 166thstreetsandBroadwayand St. NicholasAvenue.To its westlies the bulk of the twenty acresthat compriseColumbia University'S Health SciencesCampus,and to the east lies a dense,low-rise residentialneighborhood. The Audubon, consisting of a theaterand a ballroom designedby ThomasLamb for the Fox theatergroup, openedin 1912and hasservedas a venue for celebritiessuch as Lucille Ball and Mae West. Its delicate and intricate terra-cottaornamentation,including fox headsand Neptune,has recognizedarchitecturalsignificance.The ballroom servedthe PuertoRican community during the 1950s,but its primary historical significancearises from the fact that in 1965Malcolm X was assassinated ashe gavea speechin the ballroom. Despiteits importancethe Audubonwas neglectedanddeterioratedalong with much of the neighborhoodover the decadesfollowing the assassination. The block itself had becomea gatheringplace for the homeless,drug users,andotherswho further diminishedthe value of the site for prospective developers(seeFigure 3.1). Apparently unprofitable,the site was acquired by New York City in the mid-1970sfor backtaxesowed. In the early 1980s the unusedsecond-floorballroom was deterioratingwhile the ground floor was home to the New York Housing Preservationand Development

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Figure 3.1

The Audubon Ballroom, C. 1985

Source:Photoby JonathanSmith.

Department,and the remainderwas rented out by the city. Other tenants includedthe SanJuanTheater,which showedSpanish-language moviesand later was convertedinto a mentalhealthcenterby the city, a synagoguein the basement,andan ESL (Englishas a SecondLanguage)school(Gipson2002). The city-ownedsite was the crucial elementin the university's 1982 plan to expandacrossSt. NicholasAvenueandincorporatefour blocksfrom 165th to 168th streetson the west side, for three reasons.First, the long sliver of Mitchell SquarePark and the Audubon block separatedthe main campus width of the two avfrom theseparcels.Becauseof the pedestrian-daunting enuesthat meet at the northern tip of Mitchell SquarePark, 165th Street south of the AudubonBallroom would be the main pedestrianconduit from the hospital complex acrossBroadway to both the proposeddevelopment and the residential and commercial area to the east. Second,the decrepit appearanceof the Audubon Ballroom, the drug dealing surroundingit and the park, which at the time was a virtual camp for homelessmen affiliated with the nearby1,000-bedArmory shelter,actedas an imposingpsychological barrier isolating the campusfrom the community. Finally, as the area from 165th to 168th streetsalong Broadway servesas the Health Sciences Campus'sfront door, theseunattractivequalitiesalso discouragedthe investmentthat would contributeto local economicdevelopmentandthe university's

COLUMBIA UNIVERSITY'S HEIGHTS 55

Figure 3.2 Audubon Ballroom and Mary Woodward Lasker Medical Research Building, April 2002

Source:Photoby Cuz Potter.

expansion(Wiener 2002; Gipson 2003). In fact Columbia had a matching sunsetgrant from the ShermanFairchild Foundationfor the phase-twodevelopmentof the RussBerrie Medical SciencePavilion on the northernmost block between167th and 168th streetsand Audubon and St. Nicholas avenuesthat was contingenton the rehabilitationof the Audubon site. TheAudubonBiomedicalScienceandTechnologyParkwas conceivedas a five-phaseprojectthat would producefive buildingswith morethan600,000 squarefeet of researchlaboratory spaceat a cost that would exceed$300 million. Three of the buildings were to be academicresearchbuildings and two would providecommercialincubatorspaces.For the reasonslisted above, phaseonewould be the Mary WoodwardLaskerBiomedicalResearchBuilding that would housethe biotechnologyincubatorknown as the Audubon BusinessandTechnologyCenter,generallyreferredto as the AudubonCenter (seeFigure 3.2.). New York City and New York Statealso recognizedthe growing importanceof biotechnologyand were seekingto capitalizeon the city's high concentration of medical researchfacilities by supporting a biotechnology

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incubator.Both agreedwith Columbiathat the site of the AudubonBallroom would be appropriatefor such a development.The university receivedan early financial commitmentin the mid-1980sfrom Governor MarioCuomo andapproachedthe city with it (Gipson2003).Thoughtheretentionof biotech start-upswas the city's main objective, the potentialfor economicdevelopmentin WashingtonHeightscontributedto the ensuingcommitmentto grant Columbia a ninety-nine-yearground leasefor the Audubon, to grant $1.2 million outright, and to invest $10 million throughthe New York City Public DevelopmentCorporation.The New York StateUrban DevelopmentCorporation was preparedto invest $8.1 million toward the $25 million redevelopment of the AudubonBallroom site. Though this total of $18.1 million was technicallyan "investment"that would generatereturnsfor the city and state through operatingprofits, in practiceit amountedto a subsidy becausethe incubator'sbelow-marketrents werenot expectedto produceany returnsfor the AudubonCenter.The university claimedthat it lackedfunding andfelt it necessaryto find a private investor to move forward with the project. As none were forthcoming and the ShermanFairchild Foundationgrant'ssunset was approaching,the university discoveredand committed$4.5 million of its own funds and obtained$2.5 million in debt financing to start the project. In keepingwith the university'Srecentlyadoptedlow-profile approachto communityrelations,the projectplan was developedthroughcloseandquiet cooperationwith the local CommunityBoard 12 and city and stateagencies. The university ultimately proposeda six-story researchbuilding offering 100,000squarefeet of laboratory and office spacefor both biotechnology start-upsand establishedpharmaciesand 10,000squarefeet of ground-floor retail. The original building was to be demolishedbecauseof the high costof preservationefforts, estimatedto be $10 million. HoweverColumbiarecognizedtheAudubonBallroom'ssignificanceas the site of Malcolm X's assassination and consultedwith appropriatestate and city agenciesand with Malcolm X's widow, Dr. Betty Shabazz,who supportedthe project. The university proposedthe creationof a permanentmemorial and proactively establisheda $250,000medicalscholarshipfund for African Americanstudents in Malcolm X's name; it later committedto doubling the fund (Kantrowitz 1990).Mayor David Dinkins was not satisfiedwith simply a memorial,however, and worked out a compromisethat would have saveda portion of the ballroom. The Audubonballroom holds significancefor the African Americancommunityasa whole andfor someAfrican Americanresidentsof Washington Heights,but it doesnot resonatestronglyin the Dominicancommunity and thereforewas not a significant barrier to its approvalof the proposal. The project plan was certified by the New York City Departmentof City

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Planningin 1990, initiating the six-month Uniform Land Use Review Process(ULURP), which allows the local community board and the borough presidentto give their nonbindingapprovalor disapprovalof a proposalbefore it goesto the New York City PlanningCommissionfor an initial vote. In practicethe processprovidesan opportunityfor various political powersto modify the proposalto more accuratelyreflect their interestsby extracting concessionsfrom the developer.The municipal body ultimately requiredto act on proposalsin 1990 was the Board of Estimate.That board was to be disbandedthat year, however,sinceit had violated the one-person,one-vote rule in the selectionof members;it would be replacedby an expandedNew York City Council. The Board of Estimate was scheduledto vote on the Columbia proposalfor the Audubon Centerat its very last meetingon August 16, 1990.This deadlineput pressureon the university to ensurethat the proposalmadeits way safely throughthe ULURP processand the Board of Estimatevote, so the time-consumingandexpensiveprocesswould not have to be reinitiatedwith an untestedand unfamiliar political body. Columbia'srelations with the WashingtonHeights community have historically beenfar less confrontationalthan those with the Harlem community. Community residentswere hostile toward the hospital severaldecades earlier, becausemany of them were not able to obtain propercarethere,but Columbia had recognizedthe importanceof working with the community becauseof its experienceat the Morningsidecampus.To ensurethat all went smoothly in the Audubon case,a model of the full future developmentwas presentedto the executivecommitteeof the community board, which objectedto severalaspects,including the creationof a superblockby merging two blocks togetherandthe lack of attentionto the park.The universitystrove to incorporatetheseconcernsby eliminating the superblockand initiating discussionswith the city aboutpark improvements.Dr. Betty Shabazzspoke to the communityboardof her supportfor the proposal. The university also madea seriesof small dealswith local political leaders that facilitated the acceptanceof the university'sproposal,including an agreementto allow the constructionof a communityfacility on a triangular parcelbetweenSt. NicholasAvenueand 165th and 166thstreets,althoughit did not pledge todevelop the facility. The university's relations with local figures have beendescribedas "family" since the relationshippersistsand eachmembermust find a way to work with the others(Gipson 2003). The only anticipateddifficulty in moving forward was the relocationof existing tenants,which Columbia actually achievedwithout much difficulty (Wiener 2002). In addition to the university'sefforts to accommodatethe community, one possible explanationfor their amicable relations is the relatively short-termtenureof many local Dominicans.Becausethey come

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to the neighborhoodwith little intention of remainingfor a long time, they may be less investedin the neighborhood.They may view the area'slargest employer as an important source of the money they need to move away. Campus,which Anotherfactor may be the studentbaseof the Health Sciences is less inclined to protest than the younger, undergraduatestudentsin MorningsideHeights. Other obstacles,however,did emerge.The flourishing of hip-hop culture in the late 1980spromoteda much broaderawarenessand appreciationof Malcolm X's contributionsto American society. The full force of this consciousnesscameto bearon the unfortunatelytimed introductionof the project to the communityat large-aroundthe twenty-fifth anniversaryof his assassination. The first public hearing before the community board on April 4, 1990, eruptedinto shoutingmatchesat times. Soonafterwardthe December 12th Movement,an African American activist group from Brooklyn named for the date of a 1987 protest againstpolice brutality in Newburgh, New York, held a seriesof Friday-nightprotestsat the site (Kantrowitz 1990). It also hasbeensuggestedthat SonnyCarson,a notedAfrican Americanactivist andleaderof the December12thMovement,had a falling out with Mayor Dinkins andthereforesawthe destructionof the AudubonBallroom not only as the erasureof a major landmarkof Americanhistory but also as a political opportunity to build his political base(Gipson 2003). Apparentlymany Columbia studentsfrom the main campusin MorningsideHeights also made the trek uptown to join their protests(Kantrowitz 1990). Protestsalso wereheld by organizationsconcernedwith historical preservation, including the Municipal Arts Society and the SugarHill Historical Society. They strongly opposedthe demolition of the original structure,arguing thatits terra-cottaornamentationshouldnot be lost (Kantrowitz 1990). Other local residentswere concernedwith the perceivedrisks of geneticresearchto the healthof the surroundingcommunity,perhapsnot realizingthat suchresearchwas alreadybeing actively pursuedin Columbia-Presbyterian Hospital's nearby laboratories(Gipson 2002). Concern about biohazards subsidedafter the university gavea tour of similar facilities alreadyin operation in the hospitalcomplex(Berlin 2003).After a numberof additionalhearings, CommunityBoard 12 unanimouslyapprovedthe proposalamid a great deal of disruptionby protestors,and the ULURP processmovedforward. The most dramaticmomentsaroseas the fateful Board of Estimatevote approachedon April 16. Though she had publicly supportedthe original proposalfrom the beginning,ManhattanBoroughPresidentRuth Messinger, perhapswith an eye to the mayoralty for which she subsequentlyran, becameinvolved in supportof the preservationposition proffered by the Municipal Arts Society,including thepreservationof PuertoRicanculturalhistory

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associatedwith the ballroom and the selectionof an appropriatemonument to Malcolm X. Sheemployedan obscurelaw to veto the disbursementof the $8.1 million in funds that had been committedby GovernorCuomo years previously and were being channeledthrough the Port Authority of New York and New Jersey,unlessher conditionswere met (Bass2003; Purdum 1990).This about-faceand brinkmanshipinducedthe Daily News (1990) to write an infamouseditorial likening her to Lady Macbeth,washingher hands of the guilt of having supportedthe project up to this point.8 On August 16 the proposalsubmittedto the Boardof Estimatemet her conditions.The city would donatethe fundsnecessaryto preservethefacade,andColumbiawould incorporatea community health center,a Malcolm X museum,and a community arts center into the building. Consequentlyone of the Board of Estimate'slast actionswas to approvethe constructionof the AudubonBiomedicalScienceand TechnologyCenter.The ninety-nine-yeargroundlease betweenthe city and the university was signedin 1992. The Audubon Centerhas by all accountsbeen successful.Malcolm X's memoryhasbeenpreservedat a historically significantlocation. Rareterracotta ornamentationhas been preserved.The incubator, which has had no vacanciessinceit first openedin 1995, hasbeenhometo severalhighly successfulbiotechnologycompanies. Homeless peopleare seldomseenin the park and neverin large numbers.And perhapsmost important,the Audubon Centerhasrevitalizedthe streetscape and communitythroughboth physical and social improvements. In negotiatingthe leasewith the city, Columbiacontinuedto strive for a deal that incorporatedthe additionalpublic infrastructureimprovementsrequestedby the community. Mitch Gipson, then representingthe New York City Economic DevelopmentCorporation,arguedthat such improvements would naturallytake placesincethe city hadinvestedso muchin the project. Around 1997-98, the Parks Departmentand the ManhattanBorough President'sOffice spentover $1 million to improve Mitchell SquarePark, locatedjust north of the Audubon Center.In 1999 and 2000, severaltraffic islandswereplantedwith treesand shrubs,and the Broadwaymedianswere given minor facelifts to arreststructuraldecay(Gipson2002). Pedestrianactivity hasincreasedas this areahasbecomea local shopping destination.Gipson,now executivedirectorof the AudubonCenter,playeda major role in this revitalization. He was instrumentalin ensuringthat the retail spacein the center was rented to a healthy mix of businessesthat servethe surroundingcommunity, therebyintegratingthe university'sdevelopmentinto the community.Oneprincipal achievementwas convincing ChaseManhattanBank, which was closing its local branch,to relocateto the Audubon building. Another was to bring severalsuccessfulrestaurants

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from the neighborhoodto larger spacesin the building, thus facilitating their expansionand offering a critical amenity for university employees.A third achievementwas the establishmentof the first coffee shop in the neighborhood. Finally, the Barnes& Noble bookstorewas movedto the centerfrom its insulatedlocationwithin the HealthSciencesCampus,andit beganstockbooks that would be of interestto local ing a selectionof Spanish-language residents.Theseretail developmentssucceeded in bringingdesperatelyneeded pedestriantraffic to the areafrom the campus,the hospital,and the neighborhood as a whole. Theseimprovements,in tandemwith the generalreductionof crime in the region, has led to an influx of middle-incomeresidentsand a rise in median family income.9 This transformationhas included displacing some lowerincomeresidentsand improving conditionsfor others,in part due to the economic growth of the 1990s.TheArmory Track and Field Center,now one of the premier U.S. indoor track facilities, formerly warehousedabout 1,000 homelessmales in the hall where the revived indoor track is now located. With economicrecoveryafterthe 1990-91recession,this questionablemethod of shelteringthe homelesswas abandonedgraduallyby the Dinkins administration, and the building now sheltersonly about 100 males.lOOn the other hand, Mitch Gipson reports, "the building on the southeastcomer at 165th Streetand Broadwaywas transformedinto an SRO by a previousowner who probablyhadtroublerentingthe spacesto long-termrenters.It was poorlyrun, as many are, andhouseddrug addicts,amongothers."It was takenover by the Volunteersof America, which has a reputationfor transformingsuchfacilities into safe, clean apartmentbuildings with efficiency apartments,services,and short-termleasesfor low-incomeresidents(Gipson 2002). The university'scommunity-orientedapproachdid not achievecomplete success,however.The secondand third buildings of the AudubonPark were plannedto incorporatecommunity-accessible,ground-floor retail like that in the AudubonCenter,but ultimately the buildings havedirectedtheir focus inward.The completedRussBerrieMedical SciencePavilionincludesa small coffee cart (run by a tenantin the AudubonCenter),an outpatientclinic, and the office of the GenomeCenter.The third building, the Irving CancerResearchCenter,is slatedto provide only a small commissarythat will serve only building tenants(Gipson 2003). Constructionhas yet to begin on the community center, though supposedly funds from outside the university have been committed and designs developed.Severalimportantcommunity organizationshavefound spacein the Audubon Ballroom and Daniel Galvez has painted a mural there, but progresson the Malcolm X museumhas stalled.ZeadRamadan(2003), the currentchairof the area'scommunityboard,suggeststhat, in light of persistent

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attemptsthat have failed to move the project forward due to the intransigenceof the Mayor's Office and Columbia University, some groups have abandonedtheir efforts to locatethe museumin the ballroom. Meetingsbetweenrepresentatives of the Mayor's Office, the university, the EmpireDevelopmentCorporation,andthe communityboardmay beginto breakthis impasse. ColumbiaUniversity, which has establisheda Malcolm X researchcenter,is reportedto be holding high-level, internal discussionsabout how to develop the museum.As of this writing, however,the museumstill hasno location for its physicalconstruction,althoughit haslimited programsunderway.11

Conclusion SinceWorld War II, ColumbiaUniversity'sapproachto institutional expansion and community developmenthas gone through major changes,in its strengthsand weaknesses,often paralleling broadertrends in urban planning. Reacting to a perceiveddecline in neighborhoodquality and safety aroundthe main campusin MorningsideHeights as the white middle class fled to the suburbsandAfrican Americansand PuertoRicansmovedinto the apartmentsleft behind, Columbia and the other large institutions in MorningsideHeights embracedthe federal urban renewalprogram'sslumclearanceapproach.The university's outright disregardof the surrounding community's interestsand needsput a spark to the tinderbox of political activism in neighboringHarlem and in its own dormitoriesand classrooms. This perceivedoutrageculminatedin the tumultuouseventsof spring 1968, forcing the university to completelyrethink its relationshipswith the community. After a relatively quiet decadeof withdrawal during which Columbia dramatically reducedits real estatepurchases,the university faced a housingcrisis and beganto expandonce again.To avoid the failures of previous policies, the university adopteda commissionedplan that calledfor community developmentthrough small interventionsthat improved neighborhoodquality as the university'sreal estateregisterlengthened. Similar recommendationswere made in the subsequent economically driven expansionphaseat the HealthSciencesCampusin WashingtonHeights, which was isolated in an area of low incomes and high drug abuse.The proposalentaileda university effort to extendits influenceacrossBroadway from its own campusand build a mutually beneficial relationshipwith the surroundingcommunityby providing retail servicesthat wouldbothenhance safetyby increasingpedestriantraffic and provide neededretail activity. To accomplishits own aims, the university saw the necessityof building support for the project amongcommunityresidents,representatives,and politicians.Despitetheir efforts the significanceof the AudubonBallroom, where

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Malcolm X had beenassassinated in 1965, ignited protestfrom black activists and preservationists,most of whom were from outside Washington Heights,pulling city and statepoliticians intothe fracas.The interventionof an active community-orientedpolitical figure led to a hard-negotiateddeal that preservedthe terra-cottafacadeand was expectedto renovatethe decaying ballroom as a Malcolm X museum. The AudubonCenterhasbeenan unabashedsuccessfor the university and in 2003 remainsthe city's first and only operatingbiotechnologyincubator. The constructionof the centerand the concurrenteconomicboom have contributed to an influx of middle-incomeresidentsand the outflow of homeless andlow-incomeresidents.The immediatevicinity is now a much more attractive and lively retail destinationfor Columbia staff and studentsas well as thosenow living in the neighborhood.Whetherthe full scopeof the promises held out to the communitywill be realized,however,hasyet to be seen.

Notes 1. Thereis an interestinglegal questioninvolved here. Nonprofit institutions are exemptfrom real estatetaxesto the extentthat the usageof the real estateis in pursuanceof its nonprofit, hereeducational,purpose.When New York University invested in Mueller Spaghetti,for instance,its incomeandthe propertyownedfor the production of spaghettiwas not tax exempt,but was treatedas a normal businessuse-even though its net result was the enhancementof the ability of the university to provide education.The sameargumentmight be appliedto the provisionof conventionalhousing for faculty membersor any otheremployees.Certainly it benefitsthe university; but so would tax exemptionsfor the returnson its investmentin Mueller Spaghetti. And if housingfor faculty membersis per se an educationalpurpose,why shouldnot housingownedby a faculty memberbe as tax exemptas housingownedby a university and providedto that member?But the law seemsquite settledon the point. 2. RobertMcCaughey,professorof history at BarnardCollege, has done much recentwork on the topic. His conclusionis: "Columbiaoperatedas a real estateventure for a significant part of its history ... [Its portfolio included] property that has now become... the former World Trade Center.Columbia did play the real estate marketwith skill ... including the purchaseof land ... [including] what is now the ITT building for $63,000 ... [and the purchaseand later sale of] Rockefeller Center."(Fromnotesby Nancy Kwak on McCaughey'stalk, University Seminaron the City, January30, 2002). 3. The Columbia experienceis rich on many other issuesrelatedto real estate developmentanduniversity-communityrelations.They includethe role of the university in primary and secondaryeducationfor its own affiliates and for otherresidents of its surroundingcommunity; the provision by the university of community facilities, from athletic fields to gyms to meetingspacesto emergencyshelterto parking, which could or could not be sharedbetweenthe university and its surroundingcommunity, and the inverse use by university affiliates of those facilities provided for public use; the availability of university services,from classesto social servicesto

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healthservicesto securityto urbanplanning,to unaffiliatedresidentsof the surrounding community, and againthe inverse use by university affiliates of those services publicly provided. 4. The universitypurchaseda total of ninety-twobuildings between1962andthe turbulenteventsof 1968. 5. Only fifteen buildings were purchasedduring the entire decadeof the 1970s, most of them SROs. 6. The RosenthalCommittee,consistingof senior faculty, was appointedto review the university'spolicies of housingfor its affiliates (ColumbiaUniversity 1980). 7. At leastsevenpropertieswere acquiredin MorningsideHeightsandWestHarlem between1998and2001, the latestdatefor which figures wereprovidedby the university. 8. Macbethwas playing on Broadwayat the time (Purdum1990). 9. The areahasexperienceda significantdeclinein crime: drug activity hasmoved to otherlocations,robberiesdeclined57.6 percentfrom 1994to 2002, andburglaries went down 78.7 percentfor the sameperiod.For up-to-datefigures seewww.nyc.gov/ htmllnypd/htmllpctlcspdf. 10. See Armory Track and Field Center Web site (www.armorytrack.com/ history.htm). 11. For current information, see the Malcolm X Museum Web site (www.the malcolmxmuseum.org).

References Abeles,Peter.2003. Telephoneconversation.Urban planningconsultantlong active in New York City. March 25. Allah, Dasun. 2003. Sonny Carsondies. Village Voice, January 1-7. Available at www.villagevoice.comlissues/030 lIallah.php/. Anakwe, Simon. 1990. Dr. Shabazz notconsultedby thosetrying to saveAudubon. New York AmsterdamNews, March 17. AudubonUpdate. 1995-2003.Available at www.cumc.columbia.edu/news/audubonl. Bass,Richard.2003.Personalconversation.Formerstaff memberfor former Manhattan BoroughPresidentRuth Messinger.February18. Berlin, James.2003.Telephoneinterview. Chair of TransportationCommittee,Community Board 12, New York City. April 10. BiotechnologyIndustryOrganization.2002.Available at www.bio.or/erlstatistics.asp/, February27. Centerfor Biotechnology.2002. The empire state development-industrycluster reports: Biotechnologyandpharmaceuticals.Available at http://life.bio.sunysb.edu/ biotechlnybi/index.html,March 12. Centerfor an Urban Future. 1999. Biotechnology:The industry that got away. New York City: Centerfor an Urban Future.September. ColumbiaUniversity. 1949-1971.Reportsof the Registrar. - - - . 1979. Backgroundpaper on the scopeand administration of institutional real estate,May 24. - - - . 1980. TaskForceon University Housing,Albert J. Rosenthal,Chair, May. - - - . 1980-1981.Committeeon CommunityRelations,Minutes,April 4, 1980to March 20, 1981.

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- - - . 1983. University SenatePanelon Housingand Rental Policy, Final Report, March 21. - - - . 1990. TheAudubonresearchbuilding, March 15. - - - . 2001. By-Laws, statutes, and rules of the university senate. Available at www.columbia.edu/cu/senate/, June2. Daily News. 1990.Razethe Audubon?Yes, but ..." March 19. Dolkart, Andrew S. 1998. Morningside Heights: A history of its architecture and development.New York: ColumbiaUniversity Press. EducationalFacilitiesLaboratories(EFL). 1980.Campus andcommunity.NewYork: EFL. Ernst& Young EconomicsConsultingandQuantitativeAnalysis.2000. The economic contributionsof the biotechnologyindustry to the u.s. economy.Preparedfor the BiotechnologyIndustryOrganization,May. Gipson, Mitch. 2002. Personalinterview. ExecutiveDirector of Audubon Business andTechnologyCenter.March 8. ---.2003.Personalinterview. March 28. GleasonCenter for State Policy. Will NYS miss the biotech train? Available at www.cgr.org. Kahn, Roger. 1970. The battlefor MorningsideHeights. New York: Morrow. Kantrowitz, Jeffrey. 1990.Audubonmeetingeruptsinto shouts.ColumbiaSpectator, AprilS. LandmarksPreservationCommission.1981.Low Library, Columbia Universitydesignation report (LP-1118). New York: City of New York. Marshall,Lauren.2001. ColumbiaNews,October5. Mayor'sTaskForceon BiomedicalResearchandBiotechnology.2000.Initial report, January. McCaughey,Robert.2002.Talk, ColumbiaUniversity Seminaron the City, January30. Nelson,Margaret.2002.Personalinterview. RealEstateCoordinator,Brooklyn Economic DevelopmentCorporation.March 11. New York AmsterdamNews. 1990. Move the Audubonproject, February10. New York City InvestmentFund. 2001. Market demandstudyfor commercialbiotechnology,biomedicaland bioinformaticsfacilities in New York City. February. Oliver, Richard. 2000. The coming biotechage: The businessof bio-materials.New York: McGraw Hill. Purdum,Todd S. 1990.To boroughchief, ballroomissueis no waltz. NewYork Times, August 16: Bl. Ramadan,Zead. 2003. Telephoneinterview. Chair, Community Board 11, Manhattan. April 18. Renner,James.AudubonBallroom. Available at www.washington-heights.us/links/ frame.php?url=http://www.hhoc.org/histl. RockefellerCenter.Available at www.rockefellercenter.com. Rousselotand Walker. 1979. Backgroundpaperon the scopeand administrationof institutional real estate. Saunders,Cheryl.1981. Columbia'sinfluenceon the MorningsideHeightscommunity. Term paper,ColumbiaUniversity. Schwartz,Joel. 1992. TheNewYork approach:RobertMoses,urban liberals, andthe developmentof the inner city. Columbus:Ohio StateUniversity Press. Wiener, Geoffrey. 2002. Personalinterview. AssistantVice President,Planningand ProjectDevelopment,ColumbiaUniversity. March 5.

4 The University of Chicago and Its Neighbors A Case Study in Community Development Henry S. Webber

Since 1950 the University of Chicagohasbeendeeply involved in efforts to improve the communitiessurroundingits campusby significantly influencing public safety,commercialdevelopment,education,parksandrecreation, and residentialreal estate.Theseefforts havegenerallybeensuccessful,but not without controversyor greatcost. This casestudy chartsthe evolution of the university'scommunitystrategy over the pastfifty years.It beginswith a backgroundsectiondescribing the university,the surroundingneighborhoods,andthe university'Sgoals for community redevelopment,focusing on two strategiesof universitycommunity relations. First is an urban renewal strategycharacterizedby direct institutional action to transformlarge land areasthrough demolition and rebuilding. Implementedin the late 1950sand early 1960s,this strategy led to the demolition and rebuilding of central Hyde Park and to the university obtaining twenty-six acreson the northernedgeof Woodlawn. Secondis a model characterizedas supportingthe developmentof highquality communities.This strategyis highly influencedby the community developmentmovementand features a comprehensiveset of initiatives designedto makeneighborhoodsattractiveto potentialresidentsby ensuring good schools,safe streets,good transportation,and attractivehousing choices.If any of theseelementsare missing, the strategyfails. While real estateinitiatives are part of a comprehensivestrategyof supportinghighquality communities,they do not dominate.Elementsof this strategybegan in Hyde Park as early as the 1950s, and by the late 1990shad been expandedto include the surroundingneighborhoods. The chapterconcludeswith a discussionof theevolutionof the university'S communitystrategyover time. The strategypredominantlyreflectedthe circumstancesfacing the university andthe mid-SouthSideChicagoneighbor65

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hoodsduring the relevantperiods.Urban renewalwas a specific responseto a crisis facing the areaand the university in the 1950s,andit involved extensive real estateinterventionby both the city and the university. By the 1990s the City of Chicago'sgrowing attractiveness,the increasingrole of city governmentin neighborhoodplanning, and improved commercialand residential real estatemarkets allowed the university to work with partner neighborhoodsto improve the communitieswithout costly and institutionally difficult real estateinterventions. Background The University of Chicago was founded at the very end of the nineteenth century.Endowedby JohnD. RockefellerandleadingChicagoindustrialists andmerchants,the universityquickly becameamongthe wealthiestandmost prestigiousinstitutionsof higher learningin the United States.Within a few yearsthe tradition of awardingNobel Prizesto university faculty and graduateswas well established. In addition to its role as an intellectual and cultural center,the university quickly becamean economicforce on the South Side of Chicago.The university offered an undergraduateprogram and many graduateand professional programs,and it operateda large teachinghospital on its campus. Estimatesindicate that by 1950 between15,000and 20,000university faculty, students,and staff worked or attendedschoolat the Hyde Parkcampus. All large universities with adjacentmajor hospitals are important economic forcesin their cities.A distinctivefeatureof the University of Chicago is the strengthof its relationshipwith the Hyde Parkneighborhood.The vast majority of its faculty, mostof its students,and many staff live closeto campus in a neighborhoodonly 1.5 miles long and 1 mile wide (seeMap 4.1). Before beginninga discussionof the relationshipbetweenthe university and the community,it is helpful to describethe basic geographyof the area. The University of Chicagowasoriginally locatedprimarily in southwestHyde Parkbetween55th and 59th streetsand eastof CottageGroveAvenue.A second area,between60th and61st streets,grew rapidly after 1960 and now runs from CottageGroveAvenueto StoneyIslandAvenue.Bisectingthesetwo parts of the university is the Midway Plaisance,a one-block-wide,mile-long public park designedby FrederickLaw Olmsted.The Woodlawn neighborhoodbegins on the southside of the Midway and runs southto 67th Street. Hyde Park has four major residentialareas.The areafrom 55th to 59th streets,westof the Illinois Central(IC) railroad tracksandCottageGrove, is called the Golden Rectangle.The areacontainsfine single-family houses, condominiums,and apartments.North of 55th Street betweenthe IC and

THE UNIVERSITY OF CHICAGO AND ITS NEIGHBORS 67 Map 4.1

The University of Chicago and Its Neighbors

Source:ChicagoCartoGraphies.

CottageGroveis CentralHyde Park,traditionally the leastwealthy areacontaining a mix of cottages,apartmentbuildings, and single-family homes. Between47th and 51st streets,CottageGrove, and the IC tracks is South Kenwood. Settledaroundthe tum of the century, SouthKenwoodwas once one of the most prestigiousareasof the Chicago region, and many of the original mansionsremain.Betweenthe IC tracks andLake Michigan is East Hyde Park, an areaof high-risesand six-flats which was once the centerof the ChicagoJewishcommunity. The commercialareasof the neighborhoodhavebeenfocusedalong 53rd and 55th streetswith a small commercialstrip near the university on 57th Street.West of Hyde Parkis WashingtonPark, a very large public park. The populationof the Hyde Park-SouthKenwood areain 1950 was 71,689; in 2000 it was 42,723.

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University-Community Relations Before Urban Renewal

The University of Chicago and the Hyde Park neighborhoodgrew up togetherin the periodjust after the tum of the twentiethcentury.The neighborhood originally containedhigh-end housing stock, but by 1930 there were alreadysignsof decline.In 1945 the universityrecognizedthat the deterioration of the neighborhoodwas a pressingconcern.Between 1940 and 1950 Hyde Park lost many of its distinct advantagesrelative to other city neighborhoods(Rossiand Dentler 1961). ChancellorHutchins,in his Stateof the University messagein 1945,reported,"For the last fifteen years,the university neighborhoodhas steadily deteriorated,until today, I am ashamedto say, the universityhasthe unfortunatedistinction of havingthe worst-housed faculty in the United States"(Levi 1961a). Hyde Park was not the only neighborhoodsurroundingthe university that was in declineby 1950; Woodlawnalso was struggling.Despiteits physical proximity, Woodlawnhad neverbeenas intimately tied to the university as Hyde Park was. The housing stock was less robust than in Hyde Park or Kenwood, and very few university facilities were located south of 61st Street.Neverthelessa numberof university faculty lived in Woodlawn,and 63rd Street was a thriving commercialstrip. Settled as a stable middleclasscommunity,Woodlawnbeganto declineduring the Depression,when many of its apartmentswere cut up into smaller units that could attract lower rents.During World War II the declineacceleratedasindustrial workers drawn to Chicagopouredinto Woodlawn,creatingovercrowdedconditions (Silberman1964). Even the broadercity, while not in decline,was a challengeto the university during this period. Chicagowas a gritty industrial city, not the gleaming servicecenterit would become.As ChancellorKimpton saidin a Stateof the University messageaddressingthe problem of bringing distinguishedfaculty to the university, "Here I believe the difficulty is the city of Chicago itself. Broadshoulders,freight-handlers,andhog butchersarenot everyone's dish of tea, if you will allow me to mix a neatmetaphor"(Levi 1961a). Urban Renewal in Hyde Park

By 1951 the university saw itself facing problemsmuch more pressingthan the gradualerosionof neighborhoodquality. In Hyde Park theseproblems were rapid demographicchangeand rising crime rates.From 1940 to 1960 the lure of war-productionjobs, changesin southernagriculture, and the postwar industrial boom brought large numbersof African Americansto Chicago.In this twenty-yearperiod Chicago'sAfrican Americanpopulation

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jumped from 278,000 to 813,000. Prior to the late 1940s restrictive covenantsconfinedAfrican Americansto a handfulof increasinglyovercrowded "black belt" neighborhoodson the South Side of the city. 1 With the end of restrictivecovenants,however,African Americanscould moveto nearbywhite neighborhoods,althoughthey wereoften deniedmortgagesand their limited incomesforced families into subdividedapartments,for which they would be forced to pay exorbitantly high rents. One of theseneighborhoodswas Hyde Park-Kenwood(Perloff 1955).Between1950and 1956the blackpopulation of Hyde Park-Kenwoodgrewfrom 4,300to 30,000andthe white population droppedfrom 67,000 to 47,000 (Levi 1961b). Citizens of all races were concernedwith this rapid racial change.Local religious leadersand leading citizens formed the Hyde Park-KenwoodCommunity Conference (HPKCC) in responseto changesand to supportintegrationin Hyde Park. From the perspectiveof today,the racialchangein Hyde Parkin the 1950s was a step toward the racially integratedcommunity that Hyde Park would become.In the 1950s,however,rapid racial changewas alarmingto both the university and the Hyde Park community. Community after community on the SouthSide of Chicagowas moving from all white to all African American with stunningspeed,along with declinesin per capitaincome.The concern was that Hyde Parkwas on its way to becominga ghettoneighborhood (Cohenand Taylor 2000). It would be impossible,it was thought, to recruit studentsandfaculty to a university in a ghetto,and the evidencesupportedat least someof theseconcerns.In the early 1950sthe poor condition of the university neighborhoodwas one of the major factors causinga sharp decline in enrollmentin the undergraduateprogramand the loss of prominent faculty (Hyde Park Herald 1954; Boyer 1999). Crime was also a major concern.From 1952to 1959the Hyde ParkPolice District had amongthe four highestcrime ratesamongthe thirty-nine police districtsin the city (InternationalAssociationof Chiefsof Police 1967).Later analysis questionedthe reliability of all crime reporting from this period, and crime actually declinedin the yearsprior to the beginningof urban renewal, but perceptionis crucial. Residentssaw themselvesas surroundedby crime, much of it associatedwith the aging and decrepitcommercialstrips along Lake ParkAvenue and 55th Street,immediatelynorth of the campus. From the perspectiveof university leadershipand many communityleaders, university action to improve the neighborhoodwas necessary(Sagan 2002). In 1952 the university establishedthe South East ChicagoCommission (SECC)in responseto the kidnappingand attemptedrapeof the wife of a faculty member.Concernsabout crime were rampant,and in the wake of this crime 2,000 Hyde ParkersjammedMandel Hall on the university campus demandingaction. The university initially directedthe SECC to take a

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numberof specific steps:improve streetlighting; organizea police observer corps; inspectlocal tavernsfor legal compliance;undertakea physical survey of the neighborhood;embarkon a conservationand rehabilitationprogram for specific blocks and buildings; organize block groups; design a programto curb the activities of youth gangs;and setup a programof cooperation with other agenciesincluding the Chicago Crime Commissionand the SouthSide PlanningBoard. Within a few yearsreal estateactivity came to dominatethe agendaof the SECC. The first director of SECC was Julian Levi, a memberof a prominent Hyde Parkfamily and the brotherof EdwardLevi, who becameprovostand later presidentof the university and then servedas attorney generalof the United States.Julian Levi both designedand implementedthe university's program of urban renewal. Among his many skills was the use of public policy to benefit the university community. It was Levi, for example,who securedfor the university the power to use eminentdomainto purchaseprivate homesin southwesternHyde Park for university expansion. In 1958 the City of Chicago approvedSECC'surban renewalplan. The plan areaincluded 885 acres,of which 101.2 acreswere to be cleared.The goal was to meet the needsof the university for expansionand to createa neighborhoodthat would allow the university to continue to recruit from amongthe strongeststudentsand faculty in the world. The tools were both land clearanceand conservation.The lack of land for expansionhad beena major university problemfor years,and urbanrenewaloffered the opportunity for a solution. Besidesuniversity expansion,the objectives of urban renewalwere to reducedensitiesin the Hyde Park-Kenwoodareagenerally and to raiseresidentialand servicestandards(especiallyin the areanearthe families (Perloff 1955).With university)so as to attractupper-middle-income the strong supportof Mayor Richard J. Daley, the city not only passedthe plan but also funneledmore than $30 million in federal and local urban renewal funds into Hyde Park-SouthKenwood, a largepercentageof the total urbanrenewalfunds availableto Chicago(Levi 1961b). Many aspectsof urbanrenewalin HydePark-Kenwoodwereimplemented quickly. The seedy commercialstrips and dilapidatedapartmentbuildings along Lake ParkAvenueand 55th Streetwererazed,along with a numberof scatteredblocks and buildings. Many side streetswere convertedfor oneway traffic or blockedby cul-de-sacsanddeadendsdesignedto curtail travel throughthe areaby outsiders.The university purchasedmore than 700 units of housingfor studentuse and built a new dormitory. Two new suburbanstyle shoppingcenterswerebuilt, and a nonuniversitylocal hospitaladdeda large outpatientcenter. The greatestchangeswere along 55th Street,including a modernhigh-rise

THE UNIVERSllY OF CHICAGO AND ITS NEIGHBORS 71

apartment complexand a seriesof modemtownhousesdesignedfor university faculty. Furtherto the west landscapingwas installed, anew fire station and churcheswere constructed,and a social serviceagencybuilt a residential facility. Not surprisingly someplans were neverfulfilled. The urbanrenewal plan, for example,called for a major expansionof GeorgeWilliams College,but insteadthe collegeleft the neighborhoodin the early 1980s.The universityitself neverbuilt someplannedgraduatestudenthousing.By 1961, however, more than $47 million in public funds had beenspentalong with $35 million in private support.In the processa total of 2,500 neighborhood families had beendisplaced(Levi 1961a). Across the city reactionsto urbanrenewalwere mixed. The City of Chicagosawthe Hyde Parkeffort as a modelfor what urbanrenewalcould do in otherpartsof the city. The NAACP, the liberal wing of the CatholicArchdiocese,and various community activists were opposedto it. Monsignor Jack Egan,the legendaryChicagocommunityactivist, spokefor the Archdiocese in arguingthat too manyresourceswereflowing into Hyde Parkto the exclusion of the rest of the city (Hirsch 1998). Within the neighborhoodtherewas alsogreatdebate,althoughit wasmore aboutspecificelementsof the plan thanaboutthe needfor dramaticchanges. The HPKCC had beenvery active even before the formation of the SECC, and there was intensepublic concernaboutthe future of the neighborhood. Surprisingly,the decisionto reducedensity and rebuild 55th Streetaroused only moderatedebate.2 The focus of sharpdebatewas on motivesand public housing.The HPKCC and the SECC disagreedsharply over the numberof public housingunits to be rebuilt in the neighborhood,with the SECCarguing for as few as possibleand generallyprevailing (Hirsch 1998). Overall the university and most of the active political community agreed that Hyde Park was threatened,that dramaticaction was necessary,and that achieving a racially integratedcommunity of high standardswas a worthy goal for spendinggreat resourcesand justifying the considerabledisplacement of lower-incomeAfrican American residents.As the local newspaper wrote in an editorial, 'This expenditureof money and human discomfort should be made only for a justifiable cause.The Herald believeswe have this cause.We believe that a demonstrationthat neighborsof all racescan live in a community of peaceand self-respectis worth whateverprice must be paid" (Hyde Park Herald 1958). What is most striking about the debate over urbanrenewalin Hyde Parkis how little of the debateseemedto focus on what is now seenas the centralflaw in urbanrenewal-thedisplacement of many African Americansfrom the neighborhood. Evaluatingthe successof the Hyde Parkurbanrenewalplan of the 1950s and 1960sis difficult. The plan, as importantas it was, was only one strategy

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for neighborhoodrevitalizationin the neighborhood,and many other strategies were employedover the next few decades.Some conclusionscan be drawn, however. In terms of its goals of obtaining the land necessaryfor institutional expansionand preservinga community where a world-class university could thrive, urban renewal was successful.Urban renewal reversedvery negativedemographictrendsin Hyde Parkduring a periodwhere every other mid-South Side neighborhoodin Chicago was sharply declining. The community'sgoal of a sustainedintegratedcommunityof high standardswas achieved,a very rare accomplishmentacrossthe country. On the other hand, mistakesare worth noting and many residentsdid not fare well. Through the work of JaneJacobs(1961), the Hyde Park urban renewalmodel with its reductionin vibrant streetactivity becamea national symbol of what not to do in urban planning. The elimination of the only large commercialstrip very close to campushelpedmake campuslife dull, particularly for undergraduates.Perhapsmost important, the displacement of many African Americansfrom the neighborhoodand the perceptionthat the university was acting dramaticallyonly in responseto a rise in the AfricanAmericanpopulationled to deeptensionsbetweenthe university andthe African Americancommunitiesof Chicagothat persistedfor decades. Urban Renewal in Woodlawn

In Woodlawn,too, demographicchangeswere acceleratinglong-termtrends of decline. Between1950 and 1960 the white populationof Woodlawn fell from 48,000to 8,000while the African Americanpopulationincreasedfrom 6,000 to 51,000 (Levi 1961a).African Americanswere moving into Chicagoin recordnumbersfrom the Southvia the Illinois Central,whosetracks ran throughLouisiana,Mississippi,Tennessee,and Kentucky straightinto Chicago.The last stop on the line before the Loop was Woodlawn's63rd Street Station, which becamethe postwarport of entry for thousandsof newerAfrican American immigrantsto the city. By 1960 EastWoodlawn was overwhelminglyAfrican American, and, while vibrant, was also eco3 nomically depressed. In July 1959, a year after the approvalof the Hyde Park Urban Renewal Plan, the SECCannouncedthe SouthCampusPlan. This plan was designed to raze a numberof the apartmentsand commercialbuildings between60th and 61 st streetsand replacethem with a line of new structuresthat could be usedas teachingandresearchfacilities andparking lots for faculty and staff. The most prominentof thesewas to be the Law Schoolquadrangle,attached to an existing undergraduatedorm on one side and boundedby a new headquartersof the American Bar Associationon the other. Severalside streets

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that once crossednorth onto 60th Street would be cut short at 61 st Street, creating a seriesof barriersbetweenthe Midway and university campusto the north andtheWoodlawnneighborhood.Oncecompleted,the SouthCampus Plan would effectively extendthe university campusacrossthe Midway, which would thenbecomea part of the university'slandscape.Approximately 1,000 families would have to be relocated. The plan was greetedby a firestorm of opposition.A new and powerful communityorganization,theTemporaryWoodlawnOrganization(TWO, later calledThe WoodlawnOrganization),led the fight to stop the university plans for expansion.Monsignor Jack Egan and the Catholic Church were fully engaged,as wasSaulAlinsky, the legendarycommunityorganizerandformer studentat the University of Chicago.Severalof the most importantAfrican American community leadersgrew to prominenceout of this struggle, including BishopArthur Brazier and ReverendLeon Finney. TWO pioneered many of what would becomethe most effective communityorganizingtechniques of the 1960s: rent strikes, picketing of overchargingretail merchants and overcrowdedpublic schools,and sit-ins at prominentcorporateoffices. As with many political controversies,the reasonsfor the frrestormwere complex. For JackEganthe forced relocationof African Americansin order to meetthe institutional needsof the university was a repriseof the battle over urban renewal in Hyde Park. For others the battle was an early skirmish of the civil rights movementin Chicagoandthe right of African Americancommunitiesto haveinput into decisionsthat affectedtheir communities.In Woodlawn,unlike Hyde Park, the university did not have a baseof community support. It was seenas an invading force and a symbol of institutional dominance. EventuallyTWO and the university compromisedover the SouthCampus Plan. In 1964 TWO droppedits oppositionto the plan in exchangefor the university'Spromiseto avoid owning or operatingany real estatein Woodlawn south of 61 st Streetand its supportof efforts to develop a large subsidized housing project on both sides of CottageGrove Avenue from 60th to 63rd streets(Bowley 1978). This developmentis now known as Grove Park. The original plans called for 762 units, of which 504 were built. The resolution of the debateover the South CampusPlan led to other university involvementsin Woodlawnas well. In the early 1970sthe university provided a no-cost, long-term leaseon an almost nine-acreuniversity site to TWO for a mixed-incomehousingproject.A Woodlawnexperimental public school district waslater developedjointly by Woodlawn community leadershipand the university. The university initiated numeroushumanand social serviceprogramsbut maintaineda role of junior partnerand did not take on any real estaterole. The south campusof the university developed, but it remainedon the campusedge.

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Supporting High-Quality Communities

By the early 1970sthe university steppedback from its overriding concern for community issues.During urban renewal the chancellorsand other senior officers of the university spent an extraordinaryamount of time and university resourceson communityissues.With the end of that era, the university reducedits emphasison communitydevelopment. Despitethis shift in focus, the university continuedto maintain an active community role in Hyde Park-SouthKenwood, although it changedover time. The university was no longerdevelopingplansfor dramaticchangesin land use for large areas.Insteadthe focus turned to building demandfor housingamongmembersof the university communityandmiddle- to upperclasscitizens of all races.Successfulneighborhoodrevitalization strategies dependon inducingpeoplewith choicesto live in selectedcommunities.For Hyde Park-Kenwoodto prosper,it neededto be madeattractive.The university embarkedon a comprehensiveeffort to improve Hyde Park and increasingly the surroundingneighborhoodsthrough a numberof initiatives. The single most important area of university intervention was public safety. Even after urban renewal there was a widespreadsensethat the neighborhoodwas very unsafe.In December1968, for example,therewas a crime wave in Hyde Parkthat culminatedin the shootingof a local alderman and five sexual assaultsagainstUniversity of Chicago studentsin a one-monthperiod.The university negotiatedan agreementwith the City of Chicagowherebythe campussecurityforce becamea fully licensedpolice departmentwithin the bordersof Hyde Park-SouthKenwood. The university staffed its police departmentsufficiently to achievea two- to threeminute responsetime to any call. The cost was severalmillion dollars a year,but, it was argued,if crime could not be controlledit would be impossible to maintainHyde Parkas a family neighborhoodandto attractfaculty and studentsto the university. Commercialandretail developmentwas anotherareaof attention.In the early 1980s the university becameincreasingly concernedabout the decline in the Hyde Park ShoppingCenter,built during urban renewal.The university purchased,renovated,and later twice expandedthe shopping center. In making this purchasethe university's motives were primarily noneconomic.Faculty, staff, students,and other residentswould not want to live in a community without a good grocery storeand basiccommercial services.Similar reasoningled the university to purchaseselectedother commercialparcels,including much of the small shoppingareaalong 57th Streetclose to the campus,and to actively market Hyde Park to selected retailersand restaurants.

THE UNIVERSITY OF CHICAGO AND ITS NEIGHBORS 75

Investmentsin educationwere a third major strategy.Hyde Parkhaslong had a network of very strongprivate schools,notably the University of ChicagoLaboratorySchools.No neighborhoodcanbe successfulwithout strong public schools,however, and over time the university becamean advocate and developeda rich network of programsto supportpublic schools. The university also soughtto attractotherinstitutions to Hyde Park, with mixed results. Hyde Park becameone of the major centersof theological educationin the country, for example,with sevenseminariesin addition to the University of ChicagoDivinity School.On the otherhand,the American Bar Association,which during urban renewal built its headquarterson the university campus,moved downtownin the 1980s. Residentialreal estatecontinuedto have a role in the university community strategy.The focus, however, was generallylimited to problem buildings. The SECCcontinueda vigoyousprogramof codeenforcementand the university madeselectedpurchasesof particularly bad or threatenedproperties. After purchasethe university in most casesrenovatedthe buildings for studentor staff housing.By the late 1990sthe universityownedalmost2,000 units of graduatestudent,faculty, and staff housing,and almost 1,000undergraduateslived in dorms located away from the main campus.The most importantand successfulneighborhoodreal estateefforts after the urbanrenewal period was the effort to supporta talentedlocal developerin revitalizing RegentsPark, a 1,100-unitapartmentbuilding on the Lakefront at 50th Streetthat was riddled with managementand physicalproblems.Given the size of the property and its prominentlocation, it was believedthat a failure to saveRegentsParkcould be a fatal blow to EastHyde Park.This effort was notably successfulandRegentsParkis now the premierlargeapartmentbuilding in the neighborhood. Theseefforts to supportdevelopinga high-qualitycommunitywereeffective. Medianfamily incomein Hyde Parkgrew by 48.3 percentfrom 1960to 1990, far more than the 9 percentgrowth in Chicagoas a whole. The neighborhoodremainedstableandintegratedwith the percentageof African Americans in Hyde Park-SouthKenwood remaining at 47 percentfor the period from 1960 to 1990. Despitethe progress,however,the University of Chicagocontinuedto lag behindmany other leading universitiesin community attractiveness.In good parttheproblemwas themacroenvironment. Between1950and1990thepopulation of Chicagodeclinedby more than 837,000residents.No otherU.S. city hasever lost so many individuals in a forty-year period,althoughthe percentageof populationdeclinehasbeengreaterelsewhere.The southandwestsides of the city sawgreatdeclinesin populationandmedianincome.EastWoodlawn andNorth Kenwood-Oakland,alongwith manyothercity neighborhoods,were

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depopulated.It was surprisingthat Hyde Park did as well as it did, but not surprisingthat most of the university'senergywas focusedthereratherthan the surroundingareas.In a declining economy,investing outside of Hyde Park-Kenwoodwould not likely havebeensuccessful. The major factor influencing the communitystrategyof the University of Chicago over the past few decadesoccurredin the rnid-1990s,when Chicago experiencedrapid growth in its economy.After decadesof declining population,the city of Chicagobeganto grow, adding 127,000residentsin the decadeof the 1990s. Employmentin the central businessdistrict also increasedandneighborhoodsin the core of the city beganto rebound.Many cities improvedin the 1990s,but Chicagoimprovedmore than most. Within the university positive factors also were at work. New university leaderswere keenly interestedin urbanrevitalization, and the stock market boom of the 1990screateda new resourcebase.Crime declinedacrossthe country and recededas an issue, making cities less scary places.The city governmentincreasinglyfocusedon neighborhooddevelopment,andfor the first time in half a centuryhousingmarketswere moving in the university's favor. Throughoutthe south andwest sidesof the city, whereneighborhoods had declined for decades,new housing beganto sprout up. A total of 582 units of new market-ratehousing were built in Hyde Park in the 1990s;all were independentof university sponsorship. In terms of relationshipswith community groups and the processfor engagingin its community work, the university also evolved over time. The SECC developeda strong executivecommitteeand becamea quasiindependentvoice on developmentissuesin the neighborhood.New community organizationsarose in North Kenwood-Oaklandand Woodlawn, and senioruniversity staff saton the boardsof someof theseorganizations. Reflecting the national trendstoward a more pluralistic communitydevelopmentprocess,the university worked assiduouslywith outsidepartners and electedofficials. With the sharpimprovementin the economyof the city andthe revitalization of housing markets,the university set a goal of Hyde Park-Kenwood becominga competitive assetto the university. Vibrant communitiesnorth and south of Hyde Park, particularly in North Kenwood-Oaklandand Woodlawn,were a necessarypart of that strategy.By itself Hyde Park-South Kenwood'spopulationbasewas simply too small to supportthe university community'sdemandfor entertainmentandretail. In additionthe rapid escalation of housingprices in Hyde Park in the 1990spriced many university staff and some faculty out of the market. A revitalized Woodlawn was increasinglyrecognizedas important to the developmentof the university's southcampus.

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The City of Chicagojoined with community groups and a strong local aldermanto developa detailedplan for revitalizing North Kenwood.In support of theseefforts, the university starteda public charterschool in North Kenwood.This school,and a public schoolwith which it sharesa large historic building, haveboth beenvery successfulandaredrawing new residents to the neighborhoodas well as providing excellenteducationto the children of long-term residents.With the support of the community, the university police serviceareawas extendedto include much of Woodlawn and North Kenwood-Oakland.The university also provided loan guaranteesand technical supportto community groupsfor residentialand commercialhousing developmentin surroundingneighborhoodsandgreatlyextendedits employee housingprograms,encouraginguniversity employeesto purchasehomesin North Kenwood-Oakland,Woodlawn, and WashingtonPark. An academic communitydevelopmentprogramwas establishedat the university in 2001, generatingresearchandpreparinggraduateswho werecommittedto the field. How differentis the university'scurrentcommunitystrategyfrom the strategies of the urban renewal period? Quite different, one could argue. Considertwo examples.In late October2002the universityopeneda combination bowling alley, pool hall, restaurant,andtavernon the first floor of its parking garageon 55th Street.The bowling alley is directly acrossthe streetfrom the commercialstrip tom down during urban renewal (that site is now a landscapedpark). The bowling alley is opento the public, brightly lit, and sells a lot of beer.The goal of the projectis to enliventhe campusareaandincrease the level of activity. This is the exact oppositeof the strategyfor the same area duringurbanrenewal.Similarly the plan for the Midway craftedjointly by the city and the university includedextensivepublic involvementand has an explicit goal to draw peopleto the Midway andmakeit a greatpublic park for the university, the Hyde ParkandWoodlawncommunities,and the entire South Side of the city. The first major project, a year-roundskating rink, draws from all of thesecommunities. An Evolving CommunityStrategy How can one explain the changesin the University of Chicago'scommunity strategyover the pastfifty years?The interestsof the university have beenconsistent:creatingand sustaininga neighborhoodthat would attract and retain very high-quality students,faculty, and staff. Universities,at all times, tend to be risk-averse,reluctant to take controversialstands,and sensitiveto criticism. Within this contextthreefactorsexplain the evolutionof the University of Chicago'scommunity strategysince 1950. First are changesin the external

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environment.The 1950swere desperatetimes for the SouthSide of Chicago and the university. The university was worried, and with reason,about its ability to survive as a world-classeducationalinstitution. Enrollment was declining and neighborhoodsaround the university were becomingdevastated. This createdthe impetusfor bold, decisive,and in someways severe action. By the 1990smuchhadchanged.The SouthSidewasbecomingmore attractive,city governmentwas more capable,and the university'scommunity partnershad developedreal capacity.In this more positive environment the university concentratedon building neighborhoodamenitiesratherthan fighting neighborhoodtrends.In a sharplycontractingeconomy,for example, new retail is unlikely to be successfulno matter how well designed.In an expandingeconomynew neighborhoodamenitiesdraw new residents,and partnershipbecomesan importanttheme. The secondfactor influencing the university's community strategy has beenthe growth of knowledgein the community developmentfield that is now establishedwith a body of learningandliterature. Someof the planning mistakesof urbanrenewalwould not be madetoday.Theimportanceof neighborhood revitalization as opposedto land clearanceis now apparent,and communityinvolvementis now a standard. Third andlast arethe effectsof history. The decisionsmadeby the university during urbanrenewal,combinedwith largersocial andpolitical forcesin Chicago,led to a setof tensionsbetweenthe universityandtheAfrican American communitiesof Chicago that have plagued theuniversity for decades. African American studentsand faculty have been reluctant to come to the university, duein part to the lingering perceptionof hostility in the surrounding neighborhoods.At a time when the university is committedto becoming more diverse,its communitystrategymustevolveto reflect a new sensitivity to its predominantlyAfrican American neighbors.

Notes The authorgratefully acknowledgesthe researchassistanceof David S. Finch andthe commentsof Bruce Sagan,Allison Davis, RichardSaller, and Geoffrey Stone. 1. In the 1930sthe university supportedthe use of restrictivecovenants(Cohen andTaylor 2000). 2. Harvey Perloff, in a critique of urbanrenewaldistributedto the entirecommunity by the Hyde Park Herald in August 1955, raised perhapsthe most profound objectionsto the urbanplanningideascontainedin the 55th Streetplan, arguing insteadfor greatercommercialactivity and the creationof a "town center."Thereis no evidencethat his objections,which appearto be quite reasonableby modemplanning standards,were influential, however. 3. WestWoodlawn,in the areawestof CottageGrove, was muchlessaffectedby economicdeclinethanEastWoodlawnandremainedan intact neighborhoodof brick bungalows.

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References Bowley, Devereux.1978. Thepoorhouse:Subsidizedhousingin Chicago, 1895-1996. Carbondaleand Edwardsville:SouthernIllinois University Press. Boyer, John. 1999. Three views of continuity and changeat the University of Chicago. Chicago:University of Chicago. Cohen,Adam, andElizabethTaylor. 2000.Americanpharaoh.Boston:Little, Brown andCompany. Hirsch,Arnold. 1998.Making the secondghetto:Raceandhousingin Chicago, 19401960. Chicago:University of ChicagoPress. Hyde Park Herald. 1954. University of Chicagofights decline on B.A., areafronts. August 25: 1. - - . 1958. Editorial: Brave New World, May 14, p. 2. InternationalAssociationof Chiefs of Police. 1967. A survey of security services. Chicago:University of Chicago,May 14: 2. Jacobs,Jane.1961. The death and life of great Americancities. New York: Random House. Levi, Julian. 1961a.The neighborhoodprogramof the University of Chicago.Monograph,August. - - - . 1961b.Statementto the Board of Trustees,October. Perloff, Harvey. 1955.Urbanrenewalin a Chicagoneighborhood:An appraisalof the Hyde Park-Kenwoodrenewalprogram.Hyde Park Herald, August. Rossi, PeterH., and Robert Dentler. 1961. The politics of urban renewal: The Chicagofindings. New York: FreePress. Sagan,Bruce. 2002. Personalinterview, November25. Silberman,Charles.1964. Crisis in black and white. New York: RandomHouse.

Section 2 - - - - The University and the Central City - - - -

5 The Urban University as a Vehicle for Inner-City Renewal The University of Washington, Tacoma Brian Coffey and Yonn Dierwechter

The precipitousdecline of the Americaninner city in the short spaceof the last half of the twentiethcenturyundoubtedlyconstitutesone of the nation's most profoundcontemporarychallenges.This is particularly true for neighborhoodsthat abut centralbusinessdistricts (CBDs), such asderelict industrial zones andblighted residentialareas,where the value of underutilized public infrastructureand private building stock measuresin the trillions. In the "postfederal"era, creative and sustainablereutilization of theseinnercity resourcesis increasinglynecessary. City-baseduniversitieshave multiple opportunitiesto addressthis challenge.As universitiesareembeddedin broaderurbandevelopmentprocesses, though,they necessarilyengagewith the tensionsinherentin theseprocesses. Inner-city investmentpracticesoften dramaticallychangepreviousland uses. In some casesthis can lead to "contestedground" (Davis 1991), pitting inner-city neighborhoodsconcernedwith social equity againstdowntown "growth coalitions" concernedwith wealth generation(Logan and Molotch 1987; Dreier andEhrlich 1991; Krumholz 1999).Even within relatively harmoniousandputatively successfulsettings,tensionstypically arise.How the inner-city university relatesto thesewider developmentdynamicsprovidesa fertile but heretoforelargely unexploredresearchterrain. Within this context,this chapterconsidersthe impactsof the University of Washington,Tacoma(UWT) as a land developeron inner-city Tacomafrom physical, economic,and social perspectives.Topics included in the discussion are the changingurban landscapeand the university's impact on historic preservation;the role of the universityin promotingeconomicrenewal; land useissuesand concernsrelatedto the developmentof the site; and the 80

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 81

perceivedrole the university plays in communitydevelopment,particularly as relatedto social welfare and equity. The analysisis basedon university records,public documents,news reports, questionnaires,and detailedinterviews with community leaders.The interviews included conversationswith approximatelythirty political leaders, governmentofficials, architectsand developers,stakeholdersin the area, communityactivists,directorsof nonprofit agencies,and othersin positions to influence decisionsor affect the developmentof downtown Tacoma.For exampleintervieweesincludedthe mayorof Tacoma,planningandeconomic developmentofficials from both city and county offices, the director of an affordablehousingagencywith dozensof units in the vicinity of the university, the directorof a major social serviceagencylocatednearthe university, membersof neighborhoodcouncils, the commercialrealtor who acquired land for the university, and a major developerof propertiesin downtown Tacoma.The interview processbeganwith the administrationof a scaled questionnaireto which individuals were askedto agreeor disagreealong a five-point scale with a seriesof statementsabout UWT's impact on economic development,downtownrevitalization,the allocation of public monies, and UWT's role within the community. In an open-endeddiscussion intervieweesthen were askedto elaborateon their responses.Typically interviews lastedfrom one to one and one-halfhours. ofUWT's investment Basedon the datagenerated,our overall assessment activities to date is positive. However we also highlight emergingtensions, especiallybetweenneighborhood-based anddowntown-orientedactors.Given thesetensionswe concludethat, notwithstandingthe remarkablesuccesses to date,"UWT as developer"may haveto considermore closely its broader urban responsibilitiesas it simultaneouslypursuesan expandingdevelopment agendain the coming years. The University of Washington,Tacoma In the late 1980sa decisionwas madeto locatea new campusofthe University of Washingtonin Tacoma,a city of approximately180,000peoplelocatedthirty miles southof Seattle.A forty-six-acresite at the southernedge of Tacoma'sCBD was designatedas the home of the new campus,an area that largely consistedof older warehousesandvacantland. Surroundingland usesincludeda warehousedistrict to the south,a low-incomeneighborhood to the west, and an industrial port district to the east.The site and its surrounding neighborhoodwere viewed as an economicallydepressed,highcrime district that included a largehomelesspopulationand severalvacant or underutilizedbuildings.

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Interestingly the site chosenfor the campuswas not initially among the final sitesidentified as the bestpossiblelocationsby the Siting Advisory Committeecomposedof sevenbusinessandeducationleaders.Approximatelytwenty locationswereconsideredandfour siteswereeventuallyidentified asfinalists. One was locatedon vacantfarmland in a small community abuttingTacoma. This site'srelativelyremotelocationwascausefor concern,however,andthere was considerable economicand political pressureto locate the campusin Tacoma,especiallyin the downtownarea(Maynard and Voelpel1989;Gillie 1989).Thus in the endthis suburbanlocation was not judgeda viable option. The otherthree sites were in Tacomaproper.One was on the west side of the city adjacentto a community college, a location ultimately rejectedbecauseof limited room for expansionand neighborhoodopposition (Gillie 1989; Godchaux1990). The othertwo were in the downtownarea.One was in a low-incomeresidentialneighborhoodaboutone-quartermile from where the university now standsand, in the end, was rejectedbecauseof land use constraints(Maynard 1990). The remainingsite overlappedthe university's presentlocation but it avoided an area of old warehouses(many of which were vacant)on the main artery running southfrom downtown. Late in the decision-makingprocess,however,city officials convincedthe siting committeeto considerusing the warehouses(Sullivan 2003).The lobbying effort paid off and the final recommendation incorporatedthem.This selectionwas deemedthe site that would provide the best accessfor commutingstudents (University of Washington,Tacoma 1990), and urban renewal was also a consideration.News reports and commentsfrom officials and developers indicatedthat the inner-city location had the greatestpotential to stimulate efforts to revitalize the city center(Hadley 1990a,1990b, 1990c).The final decision was "hailed ... as an important step for downtown's economic renaissance"(Godchaux1990) and as one that offered the "potential to develop a historic city campus..." (Maynard 1990). Land acquisitionfor UWT beganin 1990.By 2002,65 percentof the sitehad been acquired at a cost of approximately$20,000,000(See Figure 5.1). Groundbreakingfor the university took placein 1995 andit officially openedin 1997. Between 1995 and 2002 nearly $100,000,000was spentfor warehouse renovationandnew construction,creatinga corecampusof twelve buildings.In 2002another$40,000,000wasallocatedfor rehabilitationandrenovationof five nearbybuildings as part of the university'Scontinuedexpansion.

The Campus Landscape: Aesthetic and Functional Dimensions The most obvious impact of any major developmentrelatesto its physical placein the urbanfabric, especiallyin areasmarkedby widespread dereliction.

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 83 Figure 5.1 Tacoma, Washington, and the University of Washington, Tacoma Campus

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Purchased, Purchased,

Purchased,

Purchased,

Purchased, Purchased,

Purchased, Purchased,

Purchased,

Purchased, Purchased,

Purchased,

(a) Developed, 1990-2002 _

Purchased,

Purchased,Purchased,

Purchased,

Purchased, Purchased,

Purchased,

Purchased,Purchased,

(b) Purchased,1990

Two important dimensionsrelate to UWT's physical impact on Tacoma's long-derelictinner-city neighborhood:the aestheticand architecturalqualities of the campusas a major project in historic preservation;and the functional design of the campusenvironment,particularly as it relates to reurbanizationand integrationin the immediatearea(cf. Wansboroughand Mageean2000).

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Historic Preservationand Urban Aesthetics From the vantagepoint of 2002, UWT's brief history already provides an excellentexampleof how preservationand aestheticobjectivescan be realized. As an educationalinstitution, UWT's primary mission has beento address insufficient and inequitable accessto upper-divisionbaccalaureate educationin the SouthPugetSoundregion (Chance1988).But the impactof UWT goeswell beyondthis social objective. In addition to supportingthe economicrevitalizationof downtownTacoma,of which more in a moment, UWT also representsa highly successfulexperimentin large-scalehistoric preservationand urban aesthetics. Tacomahad savedtwo downtowntheatresin the early 1980s,but the key preservationeventbeforeUWT was the restorationof Union Station, along Pacific Avenue (SeeFigure 5.2). This newly refurbishedfacility (a federal courthousetoday) satacrossfrom arguablythe most striking "streetwall" in the city: a collection of long-abandonedwarehousesthat nonethelesspossessedenormouspotentialfor adaptivereuse(Miles et al. 1988).The unified characterof the warehouses,built mainly between1890 and 1903 on land ownedoriginally by the NorthernPacific Railroad,exhibiteda strong sense of placeand visual harmony(despitethe dereliction). UWT's architectsand urban designersbuilt on theseaestheticstrengths, evenas they overcamepracticalproblems,including an active rail line, serious public safetyissues,irregularly shapedbuildings, curvedroads,and service corridor requirements.In the end the exteriorsof the warehouseswere largely preserved,and the building interiors now houseclassroomsand offices. Lines of vision towardthe nearbyTheaFosswaterwayon Commencement Bayand the CBD, respectively,were also well articulated.Indeedthis overall effort was recognizedin 1999 with two major design awards: the American Institute of Architects (AlA) Honor Award for Urban Designand the National PreservationHonor Award from the National Trust for Historic Preservation.Not surprisinglyTacomastakeholdersappearnearlyunanimous in their admiration for the preservationand aesthetic achievements of the campus,especiallygiven the scale and speedof the transformation.Arguably this success(despiteinitial political opposition)hasmadefuture preservation initiatives in Tacomaand the wider PugetSoundregion much easier. At the very leastit hasdemonstrated the contributionto inner-city revitalization that large-scalehistorical preservationis capableof making. CampusDesign The overall design of the campusenvironmentalso addressedmany functional objectivesin the immediatearea. In particular the AlA award noted

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 85 Figure 5.2 University of Washington, Tacoma and Adjacent Developments, 1990-2002

steadily,developmenl,

steadily,steadily,

steadily, steadily,steadily, steadily,steadily,

steadily,steadily, steadily,

steadily, steadily, steadily,

steadily,steadily, steadily,

steadily,

steadily, steadily,

steadily,steadily, steadily,steadily,

steadily,

steadily,steadily,

steadily,

steadily, steadily,

steadily, steadily,

steadily,

the original aim to createboth a university campusanda mixed-usecommercial district. This aim is being realizedsteadily,as the warehousestock, particularly along Pacific Avenue, facilitates multiple uses, and educational facilities mix in seamlesslywith commercial,retail, and servicefunctions. For exampleuniversitybuildingshouserestaurants,taverns,bookstores,and relatedretail outlets.Expansionplans call for continuedallocationof space to be leasedto businessestablishments. In this senseUWT has beena major reasonfor the reurbanizationof the inner city. Thus while the campusmasterplan superimposesaxesthat support an orthogonalstreet grid appropriateto a university setting, UWT is "not a typical campusof greensand quadrangles,"hermetically sealedoff

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from its surroundings(Ellsberg and Fysh 1992). The industrial characterof the campusis pronounced,integratingUWT into the surroundingurbanfabric, helping to attractvisitors to the areaand contributingappreciablyto the economicimpact of the campus. The EconomicImpactof UWT The principal economicimpact of universitieslike UWT is their long-term contribution to the formation of human capital in local labor markets (Blackwell, Cobb, and Weinberg 2002), but there are more immediateand concreteimpactsas well. This sectiondiscussestwo economicimpacts.First, UWT is a powerful magnetat the centerof consumptionthresholdsthatstretch over a large region. By attractingcashfrom nonlocalsources,UWT is influencingthe economiccharacterof adjacentneighborhoods;it is also contributing to the urban, regional, national, and even global economy through multiplier effects (Weisbordand Pollakowski 1984). Second,by pulling in this spendingand by improving the local investmentclimate, UWT is also stimulating adjacentdevelopments,including "big-ticket" projects such as museumsand large-scalehousingprojects.

Spendingin the UWTArea UWT servesa rapidly growing urbanizedregion, the South Puget Sound area.UWT enrolledapproximately2,000 full- and part-timestudentsin the 2001-2 academicyear. In the past severalyears the studentpopulationhas expandedabout 15 percentper annum, a trend that is expectedto continue into the next decade.If funding commitmentsremain strong, the UWT student populationcould hit 6,500 by 2010. Faculty and staff growth has been commensurate.From a small group of founding figures, today UWT employs 94 full-time faculty and 124 full-time staff. What does this past and expectedexpansionimply for the economyof inner-city Tacoma?One way to answerthis broad questionis to focus on retail behaviorin the immediateUWT area.Table 5.1 showsthe resultsof a survey of students,faculty, and staff conductedin August and September 2002. On average,studentsreportedthat during the regular term they visit the UWT campus3.5 times per week and spendabout $13 over this same period of time (a figure that will probably grow as more types of businesses locate in the immediatearea).Faculty and staff visit the campuson average 4.4 times per week and spend$17.85 over this sameperiod of time. Spending is disproportionatelyfood-relatedacrossall groups,a finding we would expectfrom this particularpopulation.Unfortunatelyfor the local retail sector,

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 87

though, adjacentshopsstill benefit less from student,faculty, and staff purchasesthan many would like. Making inferencesto the generalUWT population,we estimatethat, again with referenceto the regularterm, studentsmakeabout7,000visits per week to the UWT campuswhile faculty and staff makeabout950 visits. This generatesan averageof approximately$26,600in direct studentspendingeach week and $3,855for faculty and staff-well over $900,000during the thirty weeks that constitutethe three main academicquartersat UWT (October through June). Multiplier effects amplify this impact becausethey capture the size of the total effects of spendingin a given area,calculatedas direct effects+ indirect effects+ inducedeffects(SeeTable 5.1). The total effect of spendingin the UWT area,then, is estimatedat $56,700per week, or about $1.7 million over the threeacademi(quarters.If the studentpopulationactually expandsto about 6,500by 2010 (with commensurategrowth in faculty and staff) this figure could mushroomto somewherebetween$6 and $7 million (using 2002 dollars). Just how much of this estimated$1.7 (or future $6-7) million in total spendingmight actually benefit the urban and regional economyis difficult to determinewithout more detailedanalysisof sourcingpatterns.Students, faculty, and staff were askedto list the outlets they typically frequent over the regularterm. Chainoutletssuchas Starbucks,TacoDel Mar, and Subway (54 percent)for the numericonstitutedmore than half of these responses cally more important studentpopulation. This is not surprising, but chain stores do far less for local economiesthan most people imagine-apoint first establishedby Gunn and Dayton-Gunn(1991) in their analysisof the local (and in their view largely negative) economic impact of a typical McDonalds (cf. Shuman1998). All the same,continuedexpansionof the UWT campuswill certainly stimulatelocally ownedbusinessesin the urban economyalong the (rough) quantitativelines suggestedabove,addingto the ongoing revitalization of the inner city. The shapeof this sector will also reflect to some extent what students,faculty, and staff now considerto be desirable,but at presentunavailable,retail and servicefacilities. More (and more varied) types of restaurantstoppedthis list, but respondentsalso wonderedwhy therewerenot moreconvenienceor grocerystoresandretail clothing outlets,amongother types of businesses.

AssociatedDevelopment All this positive economicactivity has improvedinvestor confidence.Most communityleadersagreethat UWT hasbeena catalystfor continueddevelopmentin the southernportion of downtownTacoma,althoughthe university

1,482,000 (30 weeks)

3.7 3.2 3.5 3.5 7,000

Average days on campus per week

13.30 13.10 13.50 13.30 26,600 49,400 220,000 (30 weeks)

Dollars/week2

4.6 n/a 4.1 4.4 950

Average days on campus per week

18.00 n/a 16.40 17.85 3,855 7,325

Dollars/week2

Faculty and staff1

Source: Survey conductedby the authors,August-September 2002. IPart-timeemployeesand adjunctfaculty are excludedfrom the analysis. 2The mid-point of numericalbands(e.g., 12.50for 10-15) were usedto calculatethe averagespresentedabove. 3Multiplier typically usedin the literatureon tourist impacts.

Tacoma Pierce County Another county Average Total (Year 2000-1) Multiplier = 1.93 Total impact

Home

Students

Spending around the University of Washington, Tacoma Campus, 2002

Table 5.1

88

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 89

was not the first elementof the district'srenaissance. Prior to the university's opening,two major projectswerecompletedin the area:the 1992renovation of Tacoma'shistoric Union Stationfor reuseas a federalcourthouse, and the constructionof the State History Museum, which openedto the public in 1996 (Figure 5.2). Thesetwo projectsrepresentan investmentof approximately$90,000,000 and likely affectedthe decisionto locateUWT on its current site. However, once the university openedin 1997, a number of nearby projects quickly followed. Within five yearsTacoma'sMuseumof Glass openedto national acclaim(Graves2002); constructionbeganon a new art museum;a convention centerwas sited adjacentto the university; at least two major housing projects providing dozensof apartments,townhouses,and condominiums came under construction;and a new arts high school was locatednear the university (Figure 5.2). In addition to thesedevelopments,a major architecturalfirm locatedin the areabecauseof the university'spresence;a nearbywarehousewas renovated to provide more than 120,000squarefeet of office space;loft apartmentswere createdin anotherwarehousespace;and an esplanadewas built along the waterwayjust eastof the university (BruceDeesandAssoc.2001). Future developmentplans include a hotel adjacentto the new convention centerand a new marina-condominiumprojectnearthe glassmuseum(Card 2002; Gillie 2002). While it is difficult to say precisely what developmentcan be directly attributedto the university'spresence,it is clearthat the establishmentof the campuschangedattitudesabout the areaand had a significant effect on investmentdecisionsby both the public andprivate sectors.Besidesthe investmentin theuniversityitself, hundredsof millions of dollarsin public andprivate investmentin projectsimmediatelysurroundingthe campuscameon the heels of campusconstruction.It is easyto arguethat thereis a causalrelationship;at the very least,one can makethe casethat if UWT was not the catalystfor this investmentthat it acceleratedthe process,bringing aboutchangein a few years that might otherwisehavetakendecades(seeSzymanski2002). Community leaderssupportthis view. Respondingto a scaledquestionnaire relatedto downtowndevelopment,they sharethe sensethat the university is significantly (thoughnot singularly) responsiblefor the changingface of the CBD (SeeFigure5.3). Thereis strongagreementthat without the presenceof the campusthe southernportion of downtownwould be experiencing limited economicactivity, lessdevelopment,and weakerinvestorconfidence. As originally intended the campusis viewed as more than an educational resource.It is also consideredto be an economicdevelopmentengine, although there are someattendantfrictions associatedwith this engine.

Strongly disagree

Strongly agree

3

2

3

3

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4.6

UWT is largely UWT location is crucial responsible for to new development downtown renaissance

4.6

Without UWT, little economic activity nearby

4.6

UWT is the primary catalyst for downtown revitalization

4.6

4.6

Investor confidence UWT has significantly improved due to UWT improved Tacoma's presence identity

4.6

Figure 5.3 Leadership Perceptions, University of Washington, Tacoma, and Central City Development

90 revitalization

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 91

Friction Amid Adulation

While the communityoverwhelminglysupportsthe university and views it as a major catalystin the rebirth of Tacoma,interviews with community leadershave brought to light a number of underlying concernsrelatedto communityrelations,the role of the universityvis-a-vis community needs,and university impedimentsto the planningand developmentprocess.These concernsare not unusual, as the literature on the political economy of progressiveurban developmentsuggests(Clavel 1985; Keating 1986; Krumholz 1999).

Transparencyand CommunityRelations One suchissuerelatesto individuals who hold or haveheld property within the boundsof the campus(i.e., landownerswhose property has been purchasedby the stateor who are waiting what is assumedto be that inevitable result). A numberof property ownersaccusethe university of being heavyhandedin the acquisitionofland.They arguethatthreatsoflitigation prompted someownersto sell at submarketprices. Further,property ownersnote that at the outsetthe university defined the entire site to be developedwithout giving a timeline for the acquisitionof land. Plannersfor the university have noted that the entire site may take as long as a century to fully develop. Embitteredlandholdersin the areachargethat in taking this approachthe university has effectively stoppeddevelopmentand depressedthe market becausepotential buyers and developersrealize that the university might condemna parcelat any time and requireit to be sold. Propertyownersfeel that this strategyhaspreventedland valuesthroughout the forty-six-acre site from increasingdespitethe fact that someof the parcelswill likely not be developedfor decades.Further, somelandholders feel that this vaguenesson the part of the university is a calculatedtechnique designedto hold values down and, hence,allow the university to acquire land as cheaply as possible.For example,one landownerindicatedthat he askedthe university aboutits plansfor his building and was advisedthat the university would not be interestedin his property until sometimebetween 2005 and 2025. Thus he doesnot know if his property will be acquiredin a few yearsor a few decades.He arguesthat this time spanis such that he is unable toplan for future improvementsand usesof his building. However otherssuggestthat this argumentmay not be entirely accurate,becauseany improvementsmadewould increasethe value of the parcelandthat increase would be reflectedin the amountthe statewould be requiredto pay for the site at a later time.

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Relatedconcernsinclude chargesthat UWT has not sharedinformation with stakeholdersaffected by university actions and that they have made decisionswithout consulting those impacted.Poor communicationon the part of the university appearsto havesouredrelationsbetweenthe institution and a small group that resentswhat is often perceivedas arroganceor bullying on the part of the university.

Planningand Land Use Another areaof concerncomesfrom city and county plannersand developers who feel that the lack of a timeline for acquisition,the banking of land and the resultantlimited private developmentof the site is poor planning practice. Architects,planners,and developersbemoanthe fact that the university has no interim plan for the undevelopedportion of the site, particularly the portion that will not be developeduntil the university nears completionin 50 or 100 years. It is arguedthat leavingbuildingsunoccupiedandvacantparcelsundeveloped on such a large tract of land createsa "hole" in the areathat in turn impedesthe developmentprocess.Severalintervieweessuggestedthat interim developmentby the private sectorinvolving buildings or other land useswith life spansof twenty to thirty yearsshould be consideredfor portions of the site. Howeverthe university hasshownlittle interestin pursuing such an approach.

SocialEquity Executivesof local nonprofit agencies,membersof neighborhoodcouncils, and neighborhoodactivists also have voiced questionsabout university actions or inactions.As has happenedin other cities, however, thesegroups raiseda different set of concernsthan thosethat troubledplanners,developers, and stakeholders(Clavel 1986).A commonthemeraisedby theseindividuals is that the university hastendedto ignore socialissuesand problems in the city to the extentthat in somecasesa senseof distrusthas developed. For exampleit was arguedthat in the late 1980sand early 1990sthe city, in collusion with university officials, allowedthe neighborhoodaroundthe proposedsite to deteriorateso that land values would decrease,therebyallowing the university to acquireland at bargainprices. Others have suggested that the university avoids social issuesbecauseit is too closely alignedwith businessleadersin the city andwantsto avoid dealingwith mattersthat may be controversialor contraryto their interests. While no evidencecould be found to supporteither of the abovenotions,

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 93

thereis little doubtthat communityleadersfrom the socialserviceandneighborhoodrenewalarenasfeel that the universityhasfailed to live up to expectationsthat it would work to improve the lot of Tacoma'sdisadvantagedand disenfranchisedresidents.This sentimentwas expressedby the majority of intervieweeswho focusedon issuesof socialwelfareandsocialjustice.Members of thesegroups noted that the African American community did not relateto UWT. They questionedwhy the university was not more visible in Tacoma'spoorerneighborhoods,andthey arguedthat the university tendsto caterto a view that higher educationis an upper-endjobs provider. Some of theseintervieweecommentsare especiallyinstructive. One individual referred to the university's economicdevelopmentand businessrelationshipas "Faustian"in nature.Another arguedthat the university needsmore public criticism. A third concludedthat UWT is a "CBD place" with little interestin the city's neighborhoods.Indeedmany neighborhood-orientedactors, even those who were broadly sympatheticto UWT, expressedthis last view with somefrequency: UWT is "doing its thing," as one observerput it, but with a "limited sense"of neighborhood issuesand dynamics. Further,the view that economicdevelopmentgeneratedby the university resultedin service-wagejobs for the city's poor was a commonconcern;so too was the view that unlesseconomicdevelopmentplansincludedpolicies designedto raise the standardof living and quality of life of the disadvantaged,then thoseplans were destinedfor failure (cf. Keating and Krumholz 1991).This samegroup feels that much ofthe economicdevelopmentfunding that goesinto downtownTacoma(particularlytheuniversitydistrict) comes at the expenseof poor neighborhoodsthat reapfew of the benefitsgenerated by downtownrenewal(seealsoAtash 1988). Theseperceptionsindicate that there is a decidedly sociospatialdimension to views held about the university, its role in the community and its economicdevelopmentimpact. The differencesof opinion are distinct betweenneighborhood-oriented leaders(e.g., neighborhoodcouncil members, social serviceproviders, and advocatesfor disadvantagedpopulations)and downtown-orientedleaders(e.g., architects,developers,economicdevelopment officials, and politicians). Neighborhood-focused actors are much more likely to arguethat downtown developmentdivertsmoneyfrom needyneighborhoods,that downtown developmentdollars would be betterspentelsewherein the city, andthat the downtownrenaissance is spatiallylimited in that its effectshavelittle impact on the city's neighborhoods(SeeFigure5.4). Further,neighborhood-oriented players feel strongly that the university has a specialresponsibility to deal with socialissuesaffectingthe city but that it hasnot met that responsibility.

3

3

3

5

Strongly disagree 3

Strongly agree

Downtown diverts money from neighborhoods

4 .3

4 .3

4 .3

4 .3

Downtown-oriented leadership

UWT has a special social responsibility

4 .3

4 .3

Neighborhood-oriented leadership

Downtown money better Downtown renaissance spent elsewhere in the is geographically limited city

4 .3

4 .3

Figure 5.4 Downtown versus the Neighborhoods, Tacoma

4 .3

social responsibility

UWT has addressed its

4 .3

94

responsibility

THE URBAN UNIVERSITY AS A VEHICLE FOR INNER-CITY RENEWAL 95

Downtown-orientedleadersare lesslikely to agreethat this is the role of the university, but they sensethat the university hasplayedan importantpart in dealing with the city's social ills. The extentto which thesecriticisms are valid is unclear.The university is still a relatively small institution andfurther researchis neededinto the politics of Tacoma'srecent renaissance.However, perceptionsdo matter. The university needsto take stepsto increaseits visibility in the broadercommunity andto makethe public moreawareof what it is doing in the socialarena, or it will face mounting cynicism and criticism as it expandsits activities in the coming years(Mullins and Gilderbloom2002). In our estimation,without suchefforts the potentialfor friction betweenthe university and this segment of the community will continueto grow. Conclusions Thereis little questionthat the University of Washington,Tacomahasbeena major economic force in the recent redevelopmentof downtown Tacoma (Anderson2000). The university has been a significant contributor to historical preservation;it has spawnedretail activity in a previously economically depressedsectionof the inner city; it has spurredinvestmentin major public andprivate developmentssurroundingthe campus;and it hasbrought a mix of usesand usersto the areawho have come to live, work, study, or recreate.In short it is a classicexampleof bringing togetherthe criteria that JaneJacobs(1961) arguesare necessaryfor healthy,viable urban districts. UWT's impact as an economicdevelopmentengineis difficult to overestimate. In a few short yearsit has brought about a degreeof renewal,rehabilitation, and regenerationthat is rare in most of America's central cities. Given the rate of changeand the investmentto date,it is easyto imaginethat within a decadeTacoma'sdowntown will earn a national reputationas an attractiveandlivable centeroffering an appealingquality of life. The change has beendramatic.Tacomafinds itself in the enviableposition wherebyinvestmentand developmentnow generatemoreinvestmentand development, creatinga cycle of growth that mostU.S. centralcities seekbut neverachieve. In short, as an economic enhancementstrategy, the decision to locate the campusin the inner city of Tacomawas brilliant. Further, UWT enjoys remarkablecommunity support.The city's leadership in particular views the university as a key reasonfor the reversal of Tacoma'soverall fortunes-asignificantcontributionfor an institution whose primary mission is social, not economic. In fact this broad supportlikely shields theuniversity from criticism that someexpresson an individual basis, but that rarely appearsin the media or in public forums. Nevertheless

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major concernsexist aboutUWT as a developerand thereis a sensein some quartersthat expectationsare not being met, particularly in regardto disadvantagedneighborhoods(cf. Rubin 1998). To enjoy continuedgoodwill the university would do well to reachout to all segmentsof the communityin a visible and meaningfulway. References Anderson,P. 2000. "City of destiny": Tacomais finally destinedfor a turnaround.Los AngelesTimes, November12: B4. Atash,F. 1988. Providence.Cities 5(1): 24-32. Blackwell, M., S. Cobb, and D. Weinberg. 2002. The economicimpact of educational institutions: Issuesand methodology.EconomicDevelopmentQuarterly 16(1): 88-95. Bruce Dees and Associates.2001. Thea Foss Esplanade.Available at www. bdassociates.com. Card, S. 2002.Tacoma:downtownturns around.TacomaNewsTribune, June24: AI. Chance,W. 1988. Higher educationneedsin the greaterTacomaarea. Unpublished consultant'sreport to the SouthPugetSoundHigher EducationCouncil. September. Clavel, P. 1985. The local state: Hartford, Cleveland,and Berkeley under populist rule in the 1970s.CommunityDevelopmentJournal 20(2): 120-128. ---.1986.The ProgressiveCity. ThousandOaks CA: Sage. Davis, J.E. 1991. Contestedground: Collective action and the urban neighborhood. Ithaca,NY: Cornell University Press. Dreier,P., andB. Ehrlich. 1991 . Downtowndevelopmentandurbanreform: the politics of Boston'slinkage policy. Urban Affairs Quarterly 26(3): 354-375. Ellsberg,H., andG. Fysh. 1992.Campusgoal is to transform,not destroy,downtown. TacomaNewsTribune, July 19: B 1. Gillie, 1. 1989. Fight for UW campus:Lessonin higher economics.TacomaNews Tribune, June26: B2. - - - . 2002. Downtown projects: The whens and wheres. TacomaNews Tribune, July 2: A8. Godchaux,E. 1990. UW's downtown site wins state'sfinal ok. TacomaNews Tribune, November15: Bl. Graves,J. 2002 . Museumof glassdraws world's eye. TacomaNewsTribune, July 2: AI. Gunn,C., andH. Dayton-Gunn.1991.Reclaimingcapital: Democraticinitiative and communitydevelopment.Ithaca,NY: Cornell University Press. Hadley,1. 1990a.UW looks at 3 morebranchcampussites.SeattlePost-Intelligencer, February22: B2. - - - . 1990b. UW settles on half-dozenprospectivebranch sites. Seattle PostIntelligencer, March 17: Bl. - - - . 1990c.DowntownTacomapickedfor UW campus.SeattlePost-Intelligencer, November15: All. Jacobs,J. 1961. The death and life of great American cities. New York: Random House.

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Keating, W. D. 1986. Linking downtowndevelopmentto broadercommunitygoals: An analysisof linkage policy in three cities. Journal of the AmericanPlanning Association52(2): 133-141. Keating,W.D. andN. Krumholz. 1991.Downtownsplansfor the 1980s:The casefor more equity in the 1990s.Journal ofthe AmericanPlanningAssociation.Spring: 136-152. Krumholz, N. 1999. Equitable approachesto local economicdevelopment.Policy StudiesJournal 27(1): 83-95. Logan, J., and H. Molotch. 1987. Urban fortunes: The political economyof place. Berkeley: University of California Press. Maynard, S. 1990. UW decidesdowntown or TCC will get campus.TacomaNews Tribune, March 17: AI. Maynard,S. and D. Voelpel. 1989.Fife makesfinals for UW Branch.TacomaNews Tribune, September16: AI. Miles, M., P. Tillet, G. Grulich, and J. Webber. 1988. Trackside:preservingrailroad stationwarehousedistricts: A comparativestudyofsevencities. Tacoma:Departmentof CommunityDevelopment,City of Tacoma. Mullins, R., and1. Gilderbloom.2002 . Urban revitalizationpartnerships:Perceptions of the university'srole in Louisville, Kentucky. Local Economy7(2): 163-176. Rubin, V. 1998. The roles of universitiesin community-buildinginitiatives. Journal of the AmericanPlanningAssociation17(4): 302-311. Shuman,M. 1998. Going local: Creating self-reliant communitiesin a global age. New York: The FreePress. Sullivan, M. 2003. Personalinterview. February21. Szymanski,J. 2002. Help for boyhoodneighborhood.TacomaNewsTribune, March 15: D1. University of Washington,Tacoma. 1990. UW Branchcampusstudy: Tacomaarea: Site evaluationreport. Unpublishedreport. Wansborough,M., andA. Mageean.2000.The role of urbandesignin cultural regeneration.Journal of Urban Design. 5(2): 181-197. Weisbord,C., andH. Pollakowski. 1984.Effects of downtownimprovementprojects on retail activity. Journal of the AmericanPlanningAssociation50(2): 148-161.

6 Auraria Higher Education Center and Denver Inner-City Development Robert Kronewitter

Auraria is an inner-city campusin Denver sharedby three teachinginstitutions: University of Coloradoat Denver(UCD), primarily a graduateschool; Metro StateCollege Denver (MSCD), primarily a four-year undergraduate college; and Community College of Denver (CCD), which offers two-year associatesdegreeprograms.A fourth institution, the Auraria Higher Education Center(AHEC), was formed in 1971 to representthe otherthreeinstitutions as a single voice for planning, developing, and managingtheir new campusfor more than 33,000students. Aurariais rich in influenceandassets,suchas historicallegacy,proximity to downtown, and accessto major highwaysand masstransit routes.From the outsetthe constructionof the new Auraria campuswas seenas a way to help revitalize the Denver central businessdistrict (CBD). However there weremajor obstacles.The revitalizationof Denver'sinner city was problematic and subjectto dramaticboom-bustcycles;economicconditions,interest groups,alliances,and decisionmakerschangedfrequently; and public scrutiny was intense.The governanceof the new campuswas not clear, funds were limited, and scheduleswere tight. Out of necessityAHEC decisions were made quickly and they had to be exact, appropriate,acceptable,and representative. This chapterdescribesthe processand significant aspectsof how four unique institutions with diverseroles and missionsworked togetherto plan and designthe Auraria campus.The time frame of this casestudy beginsin approximately1971, whenAHEC was formally established(the first building openedin 1976)andendsin 2000, whenmajor campusdevelopmentwas completed.1 The chapterdescribesthe final product and offers examplesof how surroundingdevelopment,third-party collaboration,community interests,and inner-city valuescontributedto the developmentof both the campus and the broaderDenverCBD. The chapterconcludeswith a description 98

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER 99

of Auraria's successesand a summaryof how such accomplishmentscan serve as lessonsthat can be applied to the developmentof other inner-city universities. Background

The Auraria campuswas namedafter and constructedon the site of the first settlementin the region namedAuraria: a gold mining boomtown foundedin 1858.The discoveryof gold attracted100,000peopleto Colorado (then part of the KansasTerritory) over the next two years. In 1859 gold prospectorsmovedto the oppositeside of the creekand starteda rival mining town, which they called Denver City. In 1860 the towns merged under the adoptedname of Denver. Although incorporatedin the Denver CBD, Auraria retainedits own characterandidentity for the next 100years. Severeflooding decimatedAuraria in the late 1860sand 1870sand flooding continuedthrough 1965, when improvedflood-control measureswere incorporated.However the damagehad beendone and the Auraria neighborhoodwas experiencingsevereblight, making it a prime candidatefor urban renewal. In 1965 the stateGeneralAssemblycreatedthe ColoradoCommissionon Higher Education(CCHE) with a missionto "avoid needlessduplicationof facilities and programsand to achievethe bestutilization of educationalresources"(Abbott 1999). Neverthelessin 1966 MSCD openedits doors in rental space;CCD was locatedin numerousbuildings scatteredon the city's southside; andUCD was housedin adaptivereusespaceon the north sideof the DenverCBD. Academicprogramswere fragmentedand the institutions werepaying more than $2 million per year in rent (Cameronand McFadyen 1977, 124). In 1968 the new executivedirector of CCHE, Frank Abbott, and others proposeda singlecampusfor all threeteachinginstitutions,wherethey would shareuseof spaceand resources.A fourth institution, AHEC, would be createdto "plan, construct,own, lease,operate,maintain,andmanageall of the physical plant, facilities, building, and grounds" (Abbott 1999, 119).2This type of governancewas unprecedented andthe scopeof the undertakingwas immense.AHEC, acting as developer,would take responsibilityfor managing the campusso the threeteachinginstitutionscould focus on their teaching missions. In 1969 CCHE hired Lawrence Hamiltonto direct the project and determined that, initially, funding would comefrom three sources:a federal and city urban renewal program,private donations,and state appropriations.It was demonstratedthat annualexpendituresexceededtax dollars generated

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from the blighted community.Consequentlyin 1969 Denvercitizensvoted and approveda bond issue to cover the city's shareof urban renewalexpenditures.The U.S. Departmentof Housing and Urban Development (HUD) had neverfinanceda project with a multi-institutional management structure.Considerableconvincing was necessary,but HUD funding was approvedby 1971 (Cameronand McFadyen 1977, 125). Historic Denver Incorporated,a private nonprofit organizationincorporatedin 1971, encouragedpreservationand raisedfunds for historic renovation.An initial state appropriationof $2 million for planning and land acquisition was approvedin 1970, and in 1971 the governorsigneda bill legally establishingAHEC. By 1972, with questionsof governance,early finance, and the process of integrating programsfrom three institutions resolved,Hamilton hired Chicago architect JacquesBrownson to direct the planning and design. The plannersfound that the amount of spaceneededfor the individual institutions could be reducedby 33 percentif facilities were sharedon a single campus.The initial constructionbudgetof $40 million was the largest capital constructionappropriationin Coloradoat that time. The project was put on a fast track to makeuseof availablefunding and to avoid renegotiating existing institutional leaseagreements.The goal was to acquire land and to plan, design, and construct almost 1 million squarefeet of academicspacebetween1972 and 1976. Planning meetingswith community groups, students,and institutional representativeswere held, programswere finished, and a consortiumof five architecturalfirms was hired. It was necessaryto completedesigns evenbeforeland was acquiredand to start constructionbeforeall land was vacated.The few residentsstill living in the Auraria communitywere relocatedto their choiceof new neighborhoodsand were paid generousallowances made possible by the RelocationAssistanceand Real Property AcquisitionsPolicy Act of 1970(CameronandMcFadyen1977, 125-126).3 The three academicinstitutions were still skepticalof the management structure.In 1974 the University of ColoradoRegentscalled a meetingof the respectivegoverningboardsfor clarification, andthe governorandJoint BudgetCommitteeof the statelegislaturereaffirmedthe original decision: the Auraria Board would own, control all spaceallocations,andmanageall of the facilities for the three institutions, which would maintain their own identities and academicand administrativefunctions. By 1976 relocation was completedand the buildings openedon schedule.It would take another twenty yearsto vacateall roads,relocatetraffic, establishmasstransit, completehistoric renovation,completesecond-phase construction,and provide landscaping,exterior lighting, and signage.

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Process Representation The Auraria Board includedappointeesby the governorand a delegatefrom the governingboardsof eachteachinginstitution. The Auraria Foundation, with a separateboard, was establishedto facilitate property and real estate transactions.Another group, the Auraria Institutional ExecutivesCommittee (AlEC, laterAEC), includedthe chancellorofUCD, the presidentsofMSCD and CCD, and the executivedirector of AHEC. The AlEC met every two weeksto discussacademicneeds,campusissues,major campusplans, and economicconcerns.The committeepresentedits concernsand decisionsat monthly meetingswith the Auraria Board. A subcommitteeof board membersreviewedplans and designsand then presentedrecommendations to the full board for approval. The AHEC executivedirector was on all of these boardsand committees. Faculty membersfrom eachteachinginstitution participatedwith AHEC in planning and programmingthe spacesrequiredfor academicand special needs.Furthermore,AHEC personnelwho were on the faculties or lectured at the university or collegesand faculty from the teachinginstitutions were on AHEC committees.Dependingon the situation, faculty committeesincluded representatives from one or more of the institutions, such as to help selectconsultantsor produceplansfor campusdesigns andcommunityconnections.Master plans were presentedat Auraria Board meetings(open to faculty) and to specialfaculty committeesto ensuretheir involvement.The University of Colorado(system)DesignReview Board (DRB), madeup of faculty andleadingdesignprofessionals,also wasinvited to contributeto the planningand designof Auraria.4 AHEC representedall 33,OOO-plusstudentson the campusregardlessof wherethey were enrolled.As early as 1973 studentswere representedon the Auraria Academic Coordinating Committee. SpecialAuraria Board meetings addressedstudentissuesand later studentrepresentativessat on the Auraria Board andAHEC committees.The StudentAdvisory Committeeto the Auraria Board (SACAB) formed subcommitteesfor the studentunion, food services,child care,events,and the bookstore.SACAB representedall three institutions and becamea unified and persuasivevoice on campusisdirectly with decisionmakers sues.Individuals or groupsof students worked and had direct accessto nonacademicdivisions including planning, design, and theAHEC executivedirector'soffice (seeFigure6.1). Studentsprovided innovativesolutionsfor studentlounges,participatedin the planningof campus-communitybicycle routes,helpedprepareinternal and communitypro-

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Figure 6.1

North Classroom Work Session

Source:AR7 Architects,Denver,Colorado.

grams for studentcenters,and helped establisha child care center in the adjacentcommunity. There was collaborationbetweenAHEC, the teachinginstitutions, and community decisionmakers,who rangedfrom small neighborhoodgroups to high-level city andstategovernmentofficials. AHEC succeeded in its goal of obtainingkey leadershippositionson major planningcommitteesfor the City Master Plan and for the developmentof such projects as the Cherry CreekCorridor, PlatteRiver Valley, DenverLight Rail, and the DenverCenter for PerformingArts (DCPA). Membersof interest groups working togetherone day could be opposingeachother the next. For example,at one point AHEC teamedwith the Denver Rapid Transit District to develop a monorail and at the sametime was opposingits plans to store buseson the campus.Negotiatingskills anddevelopmentstrategiesfor maintaininglongterm relationshipswere essentialto assurefuture alliances.AHEC's voice in all aspectsof campusandcity issuesgaveit the ability to influencedecisions and protectits interests.Through their strong community ties and development strategy,AHEC decision makersknew when to stand firm, when to compromise,and when to give in. Information flow to and from Auraria was critical to understandingthe needsand concernsof the of the community and to make fast, responsible

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decisions.AHEC staffjoinedhigh-profile communityorganizationsandcommitteessuchas DowntownDenverIncorporated,DenverHousingAuthority, Denver Urban Forest,Light-Rail StakeholdersCommittee,American Institute of Architects (AlA) Board of Directors, and AlA Urban Design Committee.Auraria also establishedinternal committeesto deal with community issuessuch as historic preservation.The Auraria Foundationand the public relations departmentsof AHEC and the three institutions were heavily involved in community affairs. The Auraria Board and the Foundationinvited community leadersas board members,and neighborhoodstakeholdersparticipated on variousAHEC committeesso that plans,presentations,and developmentstrategiescould be modified to reflect public interestsbeforethey were announcedor publicized.Conflicts of intereststill arosebut therewere few surprisesand proposalsmet with lessresistancebecauseof this continuous sharingof information with the community.

Leadership TheAurariaBoardhadhigh expectations,confidencein a successionof AHEC executivedirectors, and a no-nonsenseattitude about getting the job done. The directive from the top was simple and the messagewas clear: "Get the campusbuilt and we will supportyou." Meeting institutional needsand fostering long-termrelationswith the surroundingcommunitywereimplied and obvious.Executivedirectorswere given substantiallatitudein how to get the job done-thatis, consideringthey were in a fish bowl being watchedby threepartnerinstitutions; state,local, and federal governmentagencies;and every major interestgroup in downtown Denver. Auraria's successwas groundedin strong leadershipand the effective delegationof authority.Classicalleadershipattributesincludedan established vision and distinct roles for staff decisionmakers.The Auraria Board provided clear direction and key board membersworked closely with strong executivedirectors.Togetherthey identified government,education,andcommunity decisionmakersneededfor coalition buildingon suchobjectivesas relocating highways, developinga monorail, and preservinghistoric green space.Well-defined principles,guidelines,and objectiveswere producedto deal with conflicting ideas.

DecisionMaking The Auraria Board was committedto the idea that institutions funded with tax dollars and incentiveshave a responsibilityto make planning decisions in the public interestand to make wise, financially soundinvestments.Like

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any public agencyor private developer,AHEC had the right to presentitself and the teachinginstitutions in the best possiblelight, providing accurate information and honestanswersto questions.Confidentiality and the timing of the releaseof informationwerecritical tools for decisionmakers.Auraria's plans evolved from public input, public scrutiny, and an understandingof community needs.In fact there were debatesover who best representedthe citizensof Denver-AHECor Denver'scity government. At many universitiesthe systemor process(means)for completingtasks determineswhat goals(ends)canbe achieved.FrequentlyatAuraria the ends definedthe means.Typical questionsincluded: "what are the most idealistic goals; what constraintsmust be overcome;how are goals achieved;and, if necessary,how do we tactfully changethe systemto reach those goals?" This is not to say the endsjustified the means.Legal, procedural,and ethical conflicts were inevitable. Powersof eminentdomain were cited diplomatically during negotiations,anddecisionsfrequentlywentbeyondmerelyethical debateto straddlethe line betweenlegal versusillegal. Throughout,however, the processwas designedto be morally right and to servenot only the teachinginstitutions but also the community at large. Planning and design were orientedtoward determiningthe ideal solution and consequences, and then ensuringthat the processwas representativeand met the higheststandardsof development. MasterPlanning

The original Auraria masterplans were visionary, assumingidealistic but somewhatunrealisticgoals suchas moving railroad tracks,realigning highway viaducts,widening Cherry Creek,or constructingan accessroadaround the perimeterof the campus.Although the teachinginstitutionsparticipated informally in the planningprocess,therewasminimal transparencyas plans, information, politics, and coalitions seemedto changedaily. There was a concernthat misinterpretationof fast-changinginformation would interfere with coalition building or effectivedecisionmaking; to addto the confusion, it seemedthat therewas little chanceof Auraria'splansbecomingreal. Later, masterplanning becamemore traditional and more transparentas planningconstraintswerealleviatedandreal alternativesolutionsdeveloped. For example,twenty-oneoptionsfor relocatingtraffic to the north sideof the campuswereproposedandevaluatedpublicly. Institutional andcommunitybasedcommitteespresentedclear alternativeswith relatedbenefitsand consequences,such as multiple options for the siting of buildings that were preparedand evaluatedby the institutions and other campusstakeholders. As major issueswere resolved, planning again moved away from the

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER 105

traditional and becameeven more transparent.A typical campusplan reflects the role and mission of a single university with a certainlevel of synergy betweenthe university, the planners,and the plan. At Auraria intense scrutiny camefrom multiple stakeholders,including three different institutions with different, usually uncompromising,ideals as well as studentsand othergroupsrepresentingcampus-wideinterests.Thereweresituationswhere the presidentof one institution wantedto achievea particular goal but the presidentof SACAB, representing33,000-plusstudentsfrom all threeinstitutions, wanted to achieve a conflicting goal. As planning becamemore adversarial,planningdecisionshadto becomemore detailedand defensible. The solutionwasto increasethe numberof presentationsto stakeholdersand to planning and designprofessionals. More thaneighty professionalswith expertisein campusdesignwereconsulted and they contributedtheir experiencesfrom hundredsof campuses with thousandsof studentsand faculty. AHEC staff also visited, compared, and analyzedplans and designsfrom hundredsof other campuses.Various plans were presentedto the community at Metro on the Mall, Downtown Denver Inc., and the Denver Botanic Gardensand Art Museum. Presentations were even given in China to leading Chineseplannersand architects. Over a ten-yearperiod, the nationalAlA Committeeon Design had extensive input into Auraria planning,andplanswere frequentlypresentedto academic groups; the University of Colorado DRB; and local, regional, and national eventssponsoredby the AlA and Society for College and University Planners.Portionsof the plan were publishedin the book CampusDesign by RichardDober (1992), and in nationaland internationalmagazines. With eachreview the masterplan was refined. Many commentswere heard over and over again, but with eachpresentationnew ideasevolved and old ideaswere reconfirmed. Product

Auraria was always envisionedas a positive functional and visual contribution to the revitalizationof Denver'sCBD. Buildings suchas the St. Francis Center,St. Cajetan's,andthe King Centerfor PerformingArts weredesigned to accommodatecommunityfunctions. The largestcampuspopulationdensities werelocatedon the edgesof the campus,positioningpotentialcustomers close to restaurantsand retail in the Lower Downtown Historic District. Auraria providedmore than 30,000potentialnew customersper day, counting students,faculty, and staff, so pedestrianconnectionswere improved to easetheir accessto downtown destinations.Landscapingprovided a parklike ambiance,and buildings were kept low to allow suninto outdoorspaces

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and preserveviews of the mountainsand campustowers. Roofs of campus buildings wereto be the samecolor, to providecontinuity andenhanceviews from downtownbuildings.View planeswereestablishedfrom neighborhood streetslooking toward specialcampusfeaturessuchas historic buildings or landscapedentrances(seeMap 6.1). The overall goal was to constructas much as possible,as fast as possible, for the lowest possiblecost (Brownson 1976). To reduce costsand speed construction,the designersestablisheda systemto maximize the use of repetitive materialsand dimensions.An economical30-foot x 30-foot structural grid was plannedover the entire campus.Columnswere locatedon the grid intersectionsandbeamswerestandardizedat 30 feet. Standardized building materialssuch as bricks, lights, and tiles would fit on 5-foot and I-foot moduleswithin the 30-foot grid (Brownson1973).Largebuilding footprints minimizedthe costof expensiveexteriorwalls andmaximizedinterior flexibility. Building plans also utilized existing infrastructuresuch as sewers,water lines, andstreets.The conceptresultedin high densitiesandwell-definedopen spaceswithout relianceon high-risebuildings, expensiveelevators,and extensivelife safety systems.Auraria was able to achievesomeof the lowest constructioncosts in the country, at approximatelyhalf of what was being spenton other campuses. There was considerabledebateat the beginningof the planning process aboutwhetherAuraria shouldbe conceivedas an urbancampus,leaving the streetsystemin placewith buildings aligning sidewalks,or as an urbanpark, which would locate buildings sensitively within a large open green space. Early planningstudiesextendingseveralmiles in eachdirection of the campus showeda lack of park spacein the centerof Denver.Thus the new campus designedas a park would help fill this void and provide neighboring residentsand city workers with accessto Auraria's landscapedopen spaces and recreationfacilities. Some of the greatestsuccessesat Auraria came from a partnership with the Colorado Departmentof Highways. The Auraria Board developed adifferent vision from many universitiesthat fail to take a serious interestin highway designand end up surroundedby nondescriptor obtrusively designedroads. Auraria looked at highway constructionas an opportunity to provide a new entranceto the city, enhancethe image of the campus,and eliminate vehicles from the campuscore (see Figure 6.2). For example,a bridge replacementprogramusing federal funds reconstructedfour major bridgesacrossthe PlatteRiver Valley that carried more than 50,000carsper day throughor next to the Auraria campusand in and out of the DenverCBD. A coalition including Auraria, the Army Corpsof Engineers,community

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER 107 Map 6.1

Auraria Higher Education Center Campus Plan, 1995

Source:Usedby permissionof the Auraria Higher EducationCenter.

interest groups, and federal, city, and state governmentsworked to divert traffic to the new Auraria Parkway,vacatesevenmajor streetstraversingthe campus,and use the vacatedspacefor programsor parks. Other features included visually upgradingbridge designsand planting more than 2,000 treesto enhancetraffic corridors. Impactedstreetsin the DenverCBD also receivednew trees, specialbrick paving, historic lights, and historic street furniture. Railroadtrackswere relocated,lengthsof viaductsreduced,and a campusring roaddesignedandconstructed.Auraria agreedto accommodate

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Figure 6.2 Auraria Parkway, Denver

bus parking and storing on campus.In return the Regional Transportation District (RTD) agreedto help pay for a new transit-way with appropriate landscapingand signage.Difficult issuesof phasingconstructionwere confronted and resolved. Trees, lawns, pedestrianwalkways, preservedopen spaces,and landscapedmedian strips were incorporatedto help unify and enliven the campus.Subsequentlyfunctions suchas the Coors ClassicBike Race and Denver Grand Prix were held on the Auraria Parkway and other campusstreets. Substantialresearchyielded valuablerecordsthat documentedthe remnants of historic landscapingand other developmentin the area.After the discoveryof gold in the late 1880s,Denverexperiencedten yearsof boomtown growth, but during this tremendousperiod of expansionnot a single park was constructed.In the early 1900s Denver embracedthe City Beautiful Movement, creating a picturesqueparks and parkway systembasedon the designsof internationally famous landscapearchitectsBurnham,Olmsted, Kessler,and DeBoer(DenverAlA 1986, 1-9). As the campusplan evolved during the 1970sand 1980s,AHEC becamea leaderin the grassrootsmovementto revitalizethe DenverParksandParkwaySystemandespeciallySpeer Boulevard, which in the early 1900swas one of the country'smost picturesqueparkways. SpeerBoulevard, with the richly landscapedCherry Creek forming the centermedian,borderedAuraria'slongestedge,so the preservationand res-

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER

Map 6.2

Speer Boulevard Bisects

109

the Auraria Campus

Source:Usedby permissionof the Auraria Higher EducationCenter.

toration of historic plantingsand landscapeprinciplesbecamea cornerstone for campuslandscapedesign.Presentationsto city officials, interestgroups, and residentialand retail neighborsrecommendeduseof historic streetlights and historic planting patternsto recreateSpeer'soriginal grandeur.As a result of theseefforts, SpeerBoulevardhasreceivedboth nationalhistoric and local landmark designation,and a beautiful edge to the campushas been restored(seeMap 6.2). Historic buildings at Auraria also becamesignificantassets.Threebeautiful churcheswere designatedas historic landmarks,and two of them were carefully renovatedfor both campusand community uses.Also preserved were someof Denver'soldesthouses,beautifully detailedwith handcrafted

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Figure 6.3

Ninth Street Park Sketch, Denver

Source: Usedby pennissionof the Auraria Higher EducationCenter.

masonry, exquisite doors and windows, and intricate cast-iron fences. A twelfth-houreffort by Historic DenverIncorporated(HDI) andAHEC saved severalhousesfrom demolition. CCHE agreedto enteran agreementwith HDI to restore,protect,maintain,and ultimately donatethe housesto the state.The DenverUrbanRenewalAuthority (DURA) deededthepropertytoAHEC, which in turn subleasedthe land to HDI, which then raisedmoney for construction and developedthe project (Cameronand McFadyen1977, 127). There were two significant aspectsto this project. First, a private historic agencywas acting as the developer, and second, HDI obtaineda grant from the Land andWaterConservationFundof the U.S. Interior Department,which requiredthat the site was preservedin perpetuity.UCD faculty providedhistoric researchand designedspecial site and architecturalfeaturesfor the houses,which were renovatedinto offices, conferencefacilities, a faculty club, and a studentcafe, providing Auraria with 35,000squarefeet of space at no cost to the taxpayers.The historically landscapedneighborhoodnow featuresoriginal cast iron fences and repairedsandstonewalks and granite curbs, as well as new but historically accuratebenches,picnic tables, gaslights, and fountains. The historic Ninth StreetPark has becomea quiet contemplativeretreatin the centerof a bustling city (seeFigure6.3). It is one of the most popularplaceson campusand the most frequently visited historic site in Colorado.Many universitiesstrive to rescuebeautiful campuslawns and open spacesfrom the infringementof building expansions , but Auraria

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER 111

hasbeenfortunatethat its historic housesand surroundinglandscapeswere legally preservedand are on the National Registerof Historic Places. A private developerwas hired to renovateanotherprized Auraria asset: the Tivoli Brewery, originally called Sigi's. This was the oldestbrewery in the state,constructedin 1866. Along with the Turnhalle OperaHouse,constructedin 1882, the brewery was part of a thirteen-buildingcomplex that was a favorite nightspotfor Denverites.Severelydamagedby flooding and neglectedbecauseof a strike, the Tivoli had closed in 1969. A cost-value analysisconcludedthat the magnitudeof the damageeliminatedit from being a candidatefor state, university, or studentfunding. AHEC was not deterred,however,and saw the Tivoli as an opportunity to provide income, recreation,and entertainment.One obstaclewas a city ordinanceforbidding the serving of liquor within 500 feet of an educationalfacility, but AHEC arguedthat the Tivoli (requiringmultiple liquor licenses)was actually on the campus,thus negatingthe 500-footrequirement. In anotherchallengeDURA saw the brewery project as a commercialventureon tax-free property and would not approvethe necessarycontracts(Abbott 1999,129).AHEC filed a suit through the attorney general'soffice, resulting in a legal interpretation that AHEC as an educationalagency,not DURA, had the right to determine what was "necessary,accessory,and supportiveto highereducation."AHEC thus got the greenlight to developthe property. AHEC turned to the private sectorfor funding and renovationservices, signing an agreementwith Trizec CorporationLtd. to developTivoli as a regional entertainmentcenter.The renovatedTivoli complex, with someof Denver'smostprestigiousrestaurantsandmostpopulartheaters,would serve the surroundingcommunity for sixty-two years and then revert to being a campus-runfacility. Over this time period tenantswould pay fees to AHEC. Privatemoneywas usedfor commercialbenefit,but in the long term Auraria would gain 350,000squarefeet of neededbuilding space.Someareasof the complex were constructedof high-quality materials and details that have stood the testof time. Other areaswere not renovatedor were of poor constructionquality, leadingto skyrocketingoperationalandmaintenancecosts. TheTivoli developmenteventuallyexperiencedsignificantfinancial losses dueto renovationcosts,the economic recession causedby soaringgasprices retail, andlack of supportingcomin the mid-1980s,lack of student-oriented munity functions, such as housing,retail, and cultural facilities. The teaching institutionsat Auraria sawthis situationas an opportunityto usestudent funds to buy backthe Tivoli and then use statefunds to renovatethe existing studentcenter into classroomand office space-anoption that was alreadypart of the campusmasterplan. In 1991 studentsvoted to approve the use of studentfees for this renovation,and multiple staff, faculty, and

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studentcommitteesbeganto work with the architects.The Tivoli reopened in 1994 as one of the country's largest student centersthat also retains retail, recreational,and cultural functions servingthe surroundingcommunity (Fetter 1996). Parking was a major issuefor Auraria's 33,000-pluscommutingstudents and the surroundingcommunity, which by 1988 includedMile High Stadium (DenverBroncosfootball) andMcNicholsArena(AvalanchehockeyandNuggetsbasketball).AHEC, theseneighbors,the city, numerouscity interestgroups, and local residentscollaboratedto solve various parking issues,in part by proposingto sharecampusparking with Mile High Stadium.More than 1,500 studentcarswereparkedat the stadiumduring the weekwith trolleys shuttling studentsto and from the campus.On Sundaysbusescarried spectatorsfrom Auraria parking lots to Broncos gamesin the stadium. However the trolleys were expensiveto operateand cost-valuestudiesshowedthat constructinga parking structureon campuswould be lessexpensivein the long run. AHEC led the way in proposingthe private developmentof a lightweight monorail connectingthe municipal stadiums,Auraria, the DenverCenterfor PerformingArts (DCPA), and the 16th StreetMall, a pedestriantransit mall running the lengthof the DenverCBD. At the time the Tivoli hadbeendeveloped into a successfulregional entertainmentcenteraccommodatingsome of Denver'sfinest restaurants.With the monorail a person could park at Auraria, dineat the Tivoli, andride the monorail toa sportseventor a performanceat the DCPA. Analysesof alternativesystemsand economicfeasibilpaid ity studiesconcludedthat the monorail project was viable if passengers a small fee. However the monorail was designedto cross and then parallel SpeerBoulevardfor a short distance,which meantthat impactson the historic landscapewould have to be resolved. Sensitivenegotiationswere already under way to obtain federal funds to pay for new Speerviaducts,and some feared that publicizing additional historic issuesmight compromise viaduct negotiations.Consequentlythe monorail project was abandoned. The implementedalternativeto the monorail project was the combination of a new parking structure,new sharedparking lots, and new light-rail stations connectingthe Auraria campusto the metropolitanlight-rail system.A slight increasein parking fees in all Auraria lots and low-cost construction enabledAHEC to purchasethe bondsto pay for a new parking structurefor almost2,000cars.New parkinglots for 1,500carson the edgeofthe campus are sharedwith the adjacentPepsiCenter,which is the new stadiumfor the Colorado Avalanche (hockey) and the Denver Nuggets (basketball).The sharedparking agreementgeneratesincomefor AHEC and helpsmeetparking needsfor both the campusand the PepsiCenter,which hostsmore than 200 eventsper year.

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER 113

AHEC took every opportunityto usethird partiesto developland or programs,provideincome,or increasethe value of its land. For exampleAHEC partneredwith the Catholic Churchin a plan to channelgrant money to the church in return for its donationof the St. Francis ConferenceCenterplus operatingcapital to Auraria. The FranciscanFriars would transferthe center to AHEC and pay $200,000per year, from the May Bonfils StantonTrust. Additional income would comefrom leasingSt. Francisoffice spaceto the campusministries and renting conferencespacefor campusevents.AHEC would usethesesourcesof revenueto payoff a promissorynote to the Friars andto pay for building management andmaintenance.A portion of this funding was later usedto relocatethe historic Golda Meir houseto the campus. In anothercaseAuraria owned a building adjacentto DCPA, but did not havethe funds for renovation;DCPA neededexpansionspacefor rehearsals and back-of-housefunctions,but did not want to leasespace.The two institutions decidedto tum the building into a condominium.DCPA would buy the lower floors for its needsand the proceedswould be usedby AHEC to renovatethe top floor for classroomand office uses.Auraria also generated income by leasingits downtown buildings to the other institutions and state agenciesand by developingevent spaceon campusfor community conferences,meetings,movies, art shows, weddings, and recreationalactivities. Studentsalsoinitiated programs,including child careandchild development centersavailable to the community, and received a million-dollar interest subsidygrant from DURA (Cameronand McFadyen1977, 127). Conclusionsand LessonsLearned

Auraria hashad a major positive impact on Denver'sinner city, including developmentof communityfunctions, historic landmarks,accessto the Denver CBD, and beautifulparks and parkways.The Auraria campusalso hasbeena catalystfor the developmentof neighboringhousing,retail, andcultural faciIities. The unusualorganizationalstructureand the strong leadershipprovided by AHEC and the teachinginstitutions havebeenvery effective in defining their vision and interrelationshipsand in making the right decisionsquickly. The lessonslearnedin this experiencecanbe summarizedin four categories.

1. Emphasizecommunitycollaboration.Collaborationandinformation sharingenabledAuraria decisionmakersto be awareof community responsesto their plans even before the plans were presentedpublicly. Decision makerslearnedwhen to place emphasison institutional interests,when to emphasizecommunityinterests,and when to compromise.

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2. Create a vision. The Auraria leadershipand plannershad clear directions,well-scrutinizedplans, and written designguidelines.Decision makersknew when their decisionswere directly alignedwith policy andwhenthey hadto obtainan interpretationfrom the AHEC executivedirector or the Auraria Board. Extraordinaryefforts were madeto accomplishgoals; therewerealways ahundredreasonsnot to do a project, but there were also people who listened to those reasonsand then provided the perseveranceand creative solutions to get the job done anyway. 3. Leverageassetsandsearchforopportunities.Auraria'sleadersmade every effort to maximize benefits from the site's assetsand to discoveropportunitiesfor campusandcommunityenhancement. They leveragedthe assetsto form numerousthird-party coalitionsto generateincome,createvalue, and bring programsto the campus.They found opportunitiesfor community plans to promoteAuraria's interestsand for campusplansto reflect communityinterests,suchas providing public parksanddesigningboth sidesof public streetson campusedgesto beautify both the communityand the campus. 4. Involve diversestakeholders.Faculty, students,neighbors,and most of all professionalconsultantswerevaluablecontributorsto Auraria's planning process,especiallywhen they were given time and provided with pertinentinformation and resourcesto make decisions. Therewas a feeling that if a campusplan or designcould not withstandprofessionalcriticism then it would not withstandthe test of time. Excellenceand professionalscrutiny were stressedmore than internal politics and opinions. Auraria hasbeena major success,with space-sharingand operationalefficiencies resulting in cost savings to studentsand taxpayers.One out of every five college and university studentsin Colorado is studying on the Aurariacampus.Overthe pastten yearsAurariahasreceivedmorethanfortyfive awardsfor its plans, designs,and communitycollaboration,and it continuesto contributeto the DenverCBD. Auraria demonstrates that inner-city universitieshave an enormousand varied capacity for community-related campusdevelopment.Its successhas beenbasedon the searchfor opportunities and the implementationof creativesolutions.

Notes 1. RobertKronewitter, authorof this chapter,wasthe campusarchitectfrom 1983 to 1996.

AURARIA HIGHER EDUCATION CENTER AND INNER-CITY DENVER 115

2. Alternative ideas suggesteda campusfor MSCD only or the creation of a single nationally prominentresearchuniversity. There was considerabledebateand analysisto determinewhat spacewas to be shared. 3. Experiencingsevereblight, the numberof dwelling units declinedfrom 823 units in 1940to 386 in 1960 and 134 in 1968.Approximately 155 families and 250 businesseswere relocated,with 96 percentelecting to remain in Denver. Surveys showedthat almostall relocatedresidentsandbusinesses weresatisfiedwith the relocationprocess. 4. The DesignReview Boardincludedprivate consultantsHideo Sasakiand Bill Muchow andfaculty consultantsJohnProssorandDwayneNuzum. Sasakibecamea paid adviserto AHEC.

References Abbott, Frank. 1999. TheAuraria Higher EducationCenter, how it cameto be. Denver: Auraria Higher EducationCenter. Brownson,Jacques.1973. Auraria Higher Education Center, 1973-1976.Denver: Auraria Board of Directors. - - - . 1976. Site developmentmasterplan. Denver: Auraria Boardof Directors. Cameron,RobertJ., and Galen G. McFadyen.1977. New collegefacilities, new intown vitality. Journal ofHousingand CommunityDevelopment,March: 124-27. DenverAlA Urban DesignCommittee.1986. Denver'sSpeerBoulevard:A revitalization. Dober,Richard. 1992. Campusdesign. New York: JohnWiley & Sons. Fetter,Rosemary.1996.Brief history ofAuraria, celebrating20 yearsofinnovation. Denver:Auraria Higher EducationCenter,Office of the ExecutiveDirector.

7 The Political Strategies Behind University-Based Development Two Philadelphia Cases Elizabeth Strom

The institutional health of an urban university is inextricably bound to the health of its surroundingcommunity. Universitiesare thereforemotivatedto work towardthe improvementof their neighborhoods.Engagingin suchwork requires'cultivating a range of political relationships.This chapterexamines the experiencesof the University of Pennsylvania(hereaftercalled Penn)and Temple University, two large institutions situatedjust outsidePhiladelphia's centralbusinessdistrict, which havebecomeincreasinglycommittedto urban developmentand communityrevitalization activities.1 PennandTemplegrew out of different traditions and servedifferent constituencies.Penn, a memberof the Ivy League,tracesits roots back to the eighteenthcenturyand its residentialcampusdrawshigh-achievingstudents from all over the country.Templewas foundedin 1884 as an eveningschool for poor studentsstudying for the ministry. Over time it lost its religious affiliation but remaineda schoolthat cateredto working people.In 1965 the school becameaffiliated with the stateuniversity system.Both universities are involved in neighborhooddevelopmenton many levels: they are themselvesdevelopersof a variety of projects on or near their campuses;they haveworkedclosely with otherdevelopersinvestingin their areas;they have had a "seat at the table" when public officials carry out neighborhoodimprovementplans; and they have createdhundredsof community partnershipsthat are aimedat betteringtheir neighborhoods(seeMaps 7.1 and 7.2). When universities becomeengagedin community developmentactivities, they are thrust into new relationshipswith communitystakeholdersand electedofficials. Crafting and sustainingtheserelationships,then, becomes a focus of institutional activity. This chapterexaminesthe political strategies 116

POLITICAL STRATEGIES AND UNIVERSITY-BASED DEVELOPMENT

Map 7.1

1 17

Temple University Main Campus

iii TemTemUniversit Main Campus TEMPLf UNIVf.RSITY

Source:www.temple.edu/maps. Used by permission.

theseuniversitieshave used, first to carry out urban renewalschemesin the 1960s, and more recentlyto implementa variety of neighborhoodimprovement programsthroughoutthe 1990s.Thesecasestudiesmake it clear that political strategieshavechangedover time. They also show that the ability of

4Z

University of Pennsylvania Campus

Source: Facilities and Real EstateServices,University of Pennsylvania.Copyright © Trusteesof the Universityof Pennsylvania.Usedby permission.

Map 7.2

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a university to createa positive political climate dependson internal conditions (most notably the quality of institutional leadershipand availability of financial resources),as well as externalconditions(including the quality of local political leadershipand the socioeconomicconditions of the community). Finally they suggestthat public and private universitiesmay face differentconstraintsandtakeadvantageof differentopportunitieswhenoperating in the political arena.

Developmentin a Post-Urban RenewalEra Both PennandTemplemadeextensiveuseof the federal urbanrenewalprogram, administeredin Philadelphiaby the RedevelopmentAuthority (long chairedby PenntrusteeGustaveAmsterdam),in the 1950sand 1960s.Section 112 of the revisedlegislationauthorizingthe programmadespecialprovision for projectscenteredon university expansion:the federalgovernment allowed cities to "count" university investmentas part of the local matchrequiredto leveragefederalfunds. This gavecity officials greatincentiveto seek out university partners,just when universities,concernedabout deteriorating conditionsin their neighborhoods and anticipatingincreasedenrollments,had becomeactively engagedin campusplanning. Partneringwith city officials who could uselocal eminent-domainpowersandfederalfunds to acquireand clear sites,both universitiesbenefitedenormously.Over 45 percentof Penn's total squarefootagetoday was addedduring the 1960sand 1970s,much of it asa resultof publicly sponsoredredevelopmentpowers,andmanyof Temple's buildings were erectedunderthe auspicesof urbanrenewal. But the methodsusedby renewalofficials-large-scaleclearanceand displacementwith limited community consultation-generated opposition to institutionalexpansionin North andWestPhiladelphia.This oppositiongrew by the late 1960sinto outright resistancemarkedby protestsby community residentsas well as students.Sincethe demiseof urban renewal,urban universitieshavehad to figure out ways to achievethe goals of campusexpansion and neighborhoodrenewal using different tools. Lacking a pool of redevelopmentfunds, scrutinizedby wary electedofficials and viewed suspiciously by neighborhoodinterests,development-oriented universitieshave had to reassesstheir expansionneeds,forge new relationshipswith public officials, and reconsidertheir posturetoward their communities. In the 1980sboth schoolswere at critical juncturesin their institutional lives, making themall the more sensitiveto the conditionsin their communities. After rapidly expandingin the 1960s,Temple'senrollmentswere declining as the most talentedstudentsin the region were seekingotherpublic campuses.PeterLiacourastook office as presidentin 1982, determinedto

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transform the school from a shrinking commutercollege in a deteriorating neighborhoodto a robust stateuniversity campus.He was often quotedas saying,"We could becomea glorified communitycollege.That might not be a bad thing, but we wouldn't need60 percentof the peoplehere" (Weyrich 1998, 17). Key to effecting this transformation,he believed,was upgrading the North Philadelphiacampus,both by expandinguniversity facilities and by stemmingthe declineof the surroundingneighborhood.Liacourasspelled out his priorities in a 1984public memofollowing a meetingwith Mayor WilsonGoode.He soughtthe city's supportin creatinga high-techindustrialpark; expandingthe school'sathletic facilities; and generallyimproving the Broad Streetcorridor, the city's main north-southaxis that was the entry point to the Templecampus(TempleUniversity 1986).Lesspublicly, Templeofficials also soughtto expanddormitory space,2and to improvethe sortsof amenities(i.e., dining halls and recreationcenters)that attractstudentsto campus. Penn,always a prestigiousinstitution, had seenits academicfortunesimprove in the 1980s.Pennresearcherswere increasinglyproductive,with total researchand developmentsupportmore than doubling from $94 million to $189 million between1980 and 1990. Penn'shumanities,medicine,business, and engineeringstrengths,among others, propelled the institution's national and internationalreputations.By the end of the 1980s,Pennwas a truly global institution, one of the few in Philadelphia.The school'sleadership recognizedthat sustainingthis position requirednew facilities and a livelier, more appealingneighborhood.In the mid-1980s, Penn President SheldonHackneybeganworking to strengthenthe university'sconnectionsto its neighbors,throwing the full weight of the institution behinda robustseries of communitypartnerships(eventuallybroughttogetherunderthe Centerfor Community Partnerships).His successor,Judith Rodin, appointedin 1994, went evenfarther. As she soughtto promoteuniversity and university-related developmentat the edgesof the campus,she also embarkedon a seriesof initiatives to improve housing,education,and securityin West Philadelphia. While both schoolscameinto the 1990swith similar campusexpansion agendas,Pennencounteredfar lessresistanceto its developmentplans. The school still controls a great deal of property it acquired during the urban renewalera, and new sitesbecameavailablenearthe medicalcomplexwhen a municipal hospital and the city's civic centerboth closed.University officials haveexpressedreluctanceto expandthe campuswestward,wherethey arelikely to encroachon establishedresidentialneighborhoods,but the school owns or can reasonably expectto own sufficient land to the eastto secureits expansionaryinterests.Building on land it already controls, the university has beenable to add classrooms,laboratoryand recreationfacilities, and a retail complex without needingmore than routine public support.

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Temple'sgeopolitical situation is considerablydifferent. The school has severalcampusesinside and outsideof the city, but its main North Philadelphia campusis far smallerthan Penn's.It controlslittle surpluspropertyand is surroundedby housing projects on the north and south and the regional railroad tracksto the east.In theory the school could expandwestward,and a visitor to the area noting the many empty lots and abandonedbuildings west of Broad Streetmight think this would be a natural areafor expansion. But propertyownershipin this areais highly dispersed,with dozensof owners controlling small parcelson eachblock, creatingbarriersto site assembly. In contrast,property ownershipto the eastof the Penncampusis less dispersed,dominatedby public, institutional, and commercialowners.Assemblinglarge parcelswest of Broad Streetwould requirethe city to useits condemnationpowers againsthundredsof ownerson Temple'sbehalf, in a neighborhoodalreadydisposedto think the worst of the university. It is hard to imagine that either district or citywide electedleadershipwould be preparedto spendthe political capitalneededto undertake such an effort. Moreover, in the agreementsthe schoolsignedto endprotestsagainsturbanrenewal in 1970,Templeofficials agreedto limit the school'sexpansion;all efforts to loosentheserestraintshave met with resistance.As one long-time community activist told a reporter, "If they just stay where they are, it would be good.If they tried to movenorth, south,eastor west,it would be bad, andthe community would confront them immediately" (Dean 1998). Strategies:How Templeand PennMobilize Support for Development PennandTemple,like other urbanuniversities,seekto shapeland usesand land usepolicies in their cities. In this regardthey are like otherplace-based corporations,using whateverresourcesthey can bring to bear to influence thosewho regulateland use.But their interestsand strategiesare distinctive. Privateinvestorshavetwo very blunt and effective weaponsat their disposal when they seekto extract favorable action from public officials. They can threatento move (Kantor and Savitch1993), and they canrewardand punish electedofficials by targetingcampaigncontributions.Universities,however, are not mobile. As Judith Rodin has written, "Ultimately, urbanuniversities cannotchangetheir address.Most havetoo muchinvestedin physicalfacilities and too much history in their communitiesto want to do so, anyway" (Rodin 2001).3 Moreover, as public or nonprofit institutions, they cannot give financial supportto electoralcandidates. Finally, for-profit developerscan comfortably pursuestrategiesdesigned purely to maximizefinancial returnswithout encounteringconflict with their

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shareholders,their employees,or their consciences.Even electedofficials generallyunderstandthat private developersare in the businessof making a profit, and don't expect them to engagein participatory decision-making processesor solvesocialproblems.Universities,whetherpublic or nonprofit, are in a very different situation. Electedofficials and community residents expectthem to behavein public-orientedways; their own constituents(students,faculty, alumni, and trustees)demandcorporatebehaviorthat is consistentwith the high-mindednessthought to be characteristicof liberal arts values. Held to a higher standardthan for-profit developers,developmentorienteduniversitiesmust achievesimilar goals using different methods.If they are to win friends for their campusand neighborhoodimprovement schemes,they must find more nuancedways to forge alliances. Serviceand Outreach Temple and more notably Pennhaveboth soughtto win supportby becoming engagedin a variety of community-serviceprograms.Pennhas beenon communitydevelopmentactivities the cutting edgeof university-sponsored with its West PhiladelphiaInitiatives, an interlocking seriesof programsdesigned to addressthe area'ssecurity, educational,housing, and economic developmentneeds(Lussenhop2001; Rodin 2001). Penn made direct investmentsin commercialand campusinfrastructureand pursuednumerous operatingpolices designedto improve local quality of life. Both universities havedevelopedextensiverelationshipswith the troubledpublic school system.Pennactually built and now managesone school,in hopesof improving the level of elementaryeducationin the immediate community while also making the school'sWest Philadelphianeighborhooda more attractive place for families to live. Penn also has supervisorycontracts with the school board to overseeseveralother schools.Temple'scontract with the school board gives it responsibilityfor five local schools,where university personnelare involved in curriculum development,after-school activities, and other programs. Both universitiesoffer a numberof academicprogramsfeaturing different styles of service learning. Penn'sCenterfor Community Partnerships, run by Dr. Ira Harkavy, representsa national model for incorporatingcommunity-basedactivities into the curriculum, and giving such activities academic legitimacy. Penn offers some seventy-fivesuch courses,and counts 200 different campus-communitypartnershipsin its portfolio. Temple has recentlybrokengroundon a communityeducationbuilding that will housea variety of community-basedprograms;the school'sWeb site also lists over 100 coursesand programsthrough which Temple studentscan engagein

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community outreach.Penn and Temple studentsand faculty can be found staffing communitycenters,tutoring in public schools,and providing outpatient carein medical schoolclinics, just to give a few examples. Both Temple and Pennare actively engagedin promotinglocal business developmentas well. Temple has contributedboth technicalassistanceand capital in an effort to upgradethe commercialstrips surroundingthe campus. Pennhassimilar small-businessdevelopmentprograms,and it has also boostedthe local economythroughits Buy West Philadelphiaprogram.Createdin 1986 this initiative makespurchasingfrom local vendorsa high priority throughout theinstitution. Buy WestPhiladelphiadoesn'tmerelycompile lists of local vendors; it works actively with small businessesso they increasetheir volume of salesto the university, and requiressomelarge, national suppliersto form partnershipswith local companiesto administertheir Penn-relatedcontracts(ICIC 2002, 17-19). Such partnershipshave multiple motivations.To some, service learning and community outreachshould be an emblematicfeature of a liberal arts education,and the leadershipat both schoolssincerelyembracesthis view. In addition suchprogramsare valued as practical training for studentsin a variety of fields wheresuchpracticeis essential.Suchinitiatives also have a real public relations valueto universities.At the most superficial level, the schoolscan point to their many community-directedprogramsto show that they are giving back somethingto neighborhoodresidents.Many residents consideruniversitiesto be less than ideal neighbors;apart from the more dramatictensionsoverurbanrenewal,WestandNorth Philadelphiaresidents haveoften complainedabouttraffic, parking, and disruptivebehaviorof students.Programsthat offer concretebenefitsto communitiescan improve a university'simageamongthosewho live nearby. On a less tangiblelevel, communityoutreachprogramscan help the university win political supportthat may, in the long run, makeit easierfor the institution to achieveits own goals,including campusexpansion.Penn'seconomic developmentdirector told researchersthat the school'soutreachefforts helpedits relationswith the city council, specificallyciting the school's negotiationswith the city over the purchaseof the civic center(ICIC 2002, 17). Thosewho benefit directly from university programsare less likely to join the oppositionwhen the university seeksto closeoff a streetor erecta new building. Elected officials whose constituentsfeel well served by university-sponsoredserviceshave less incentive to win political points by demonizingthe schoolas it seeksto expand.Thereare limits to the political value of such programs,however. One knowledgeableobserversuggested that North Philadelphiacommunity organizationsare happy to take advantageof whateverin-kind servicesTempleis willing to offer, but still remain

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suspiciousof any new developmentplans. But eachpartnershiprepresents anotherrelationshipthat anchorsthe schoolin the community,and this complex web of relationshipsprovidesa goodbasisfor building political support for projectsessentialto the university'sgrowth.

Direct Institutional Engagementin the Political Process The presidentsand governmentrelations officials of both universitieswork hardto cultivatepositivepolitical relationships,althoughthis is not asstraightforward as it sounds.Philadelphiais a politically fractious city. Not only do institutionsneedto reachout to their councilrepresentatives, but they (especially state-fundedTemple) must also attendto the concernsof at least one staterepresentativeand one statesenator.Pennsylvania'slarge lower chamber means thata university'sdevelopmentmay crossdistricts, in which case additional state representativesmust be considered.In some instancesan area'srepresentatives havebeenrivals, so that a closerelationshipwith one alienatesanother. Simply doing good work in the community is not enough.Universities must make an active effort to build relationshipsbasedon small but crucial understandings.Elected officials must be kept informed. The worst thing that canhappento an electedofficial, saysoneuniversity representativewith extensivepolitical experience,is to hear about somethingfor the first time from an unhappyconstituent.Electedofficials are creditedfor positive developmentsin the area,thankedat groundbreakings,photographedat award ceremonies,and given the bestseatsat university sportingevents.One university respondentnoted that an electedofficial once told him, "You'll be able to get a lot doneherein the communityas long as you don't careabout taking credit for it." Eventhe mannerof communicationwith the "electeds"is part of the relationship. At both schoolsit is understoodthat contactwith the local council representativemustgo throughoneof two or threetop officials. If an elected official beginsreceivingcalls from dozensof peopleup and down the school hierarchy,the relationshipwill be damaged.Becausethis endeavoris socomplex, both schools have governmentand community relations staffs with experienceat the local, state,and national levels; high-level administrators are frequently drawn from the ranks of the public sectoras well.

Building Relationshipsthrough Intermediaries University leadershave been able to build political relationshipsfrom service on boardsandcommittees.All the top administratorsat PennandTemple

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serveon a variety of nonprofit boardsand governmentcommissions,from the boardsoflocal communitydevelopmentcorporations,to the United Way, to the boardoverseeingthe city's EmpowermentZone. Justaboutevery city commissionhas a Pennor Temple official on it. Judith Rodin was askedto serve on Mayor John Street'stransition team, and Street'sfirst economic developmentinitiative was to createan agency,chaired by Rodin, charged with luring high-techcompaniesthat would build on the city's universityand hospital-basedresearch. This sort of service on the part of top officials brings multiple mutual political benefits. University representativescan often bring expertiseand respectabilityto an organization.Their participationhelps smallerneighborhood groups get taken seriously by funders and political leaders,and can give weightto higher-levelefforts aswell. The newsreportannouncingStreet's economicdevelopmentinitiative, for instance,notesthe importanceof Rodin's appointmentas giving the agency "heft" (Gorensteinand Burton 2001). Templeofficials serveon the EmpowermentZone boardand are includedin virtually all North Philadelphiadevelopmentefforts. By agreeingto servein theseroles, university officials win the goodwill of political and community leaders.They also get the opportunityto meetanddeveloprelationshipswith a wide variety of city stakeholders,and theserelationshipscan be immediately beneficialor bring advantagesdown the road. Universitiesalso reachbeyondtheir paid administratorswhen seekingto win political friends. Faculty, alumni, and trusteescan all be political assets. Many local and statepoliticians havehad somekind of connectionto these two schools.For example,former mayor Ed Rendell receivedhis BA from Penn,andMayor Streetreceivedhis law degreefrom Temple.Thesekinds of personalconnectionsdon't translateinto automaticpolitical support, however. Some observersbelieve that Rendell went to great lengths to avoid showing favoritism toward Penn, and as a city council representativeJohn Streetcarriedon a running war with Temple.4 University trusteesoften are chosenpreciselybecausethey are economically and politically prominentand can help the university realize its civic goals.PenntrusteeGustaveAmsterdamwas the chair of the city's RedevelopmentAuthority throughoutthe 1960s,which no doubt helpedthe school navigatethe complexurbanrenewalprocess.Templetrusteesalso havebeen able to bring important resourcesto bear in the resolution of political conflicts surroundingcampusexpansionefforts. A Templetrusteewho was also the presidentof First PennsylvaniaBank was able to organizea bridge-loan fund that enableda nonprofit communitydevelopmentcorporationto build a housing project that helped end a political impasseover urban renewal in 1970. Another trusteeusedhis closeconnectionsto Ed Rendellto bring the

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mayorin to mediate between the universityandthen-councilmanJohnStreet, hammeringout the compromisethat allowed the constructionof Temple's long-delayedrecreationcomplex,now known as the L. When crime became a pressingconcernin North Philadelphiaand Temple officials were unable to get increasedpolice patrols at nearbybus and substations,Templeboard businessman with highchairF. EugeneDixon, a prominentPhiladelphia-area level political and social connections,met personallywith the police commissionerto bring attentionto the school'sproblems. Finally both universitieshave createdinstitutional partnershipsthrough which to carry out importantdevelopmentandcommunityimprovementtasks. Penn spearheadedthe creation of the University City District, which provides much of the sanitationand securityservicesfor the area;this organization includesrepresentationof the otherlargeWestPhiladelphiainstitutions, as well as smallerbusinessesand community organizations.Housing, community development,and educationprogramsalso work cooperativelywith local groups.Temple has fewer institutional neighborswith which to work, but hasalsolearnedto takeadvantageof existingresources.A well-respected local nonprofit developer,BeechCorporation,is currently renovatingseveral multifamily housesto serve as studentapartmentsjust west of the campus'sBroadStreetborder.Whereasthe school'sefforts to build dormitories have always encounteredcommunity resistance,and plans to build facilities to the west of Broad Street have been greetedby near universal opposition,this project has not come underfire. Apparently community activists are willing to seestudenthousingconstructedwest of Broad, providing it is built and ownedby a local entity. We can seethe importanceof nurturing good relationshipswhen we look at situationsin which they havenot prevailed.Pennencounteredits shareof community displeasureover developmentduring the 1990s, for example, whenPennboughtthe old civic centerfrom the cash-strapped city and made plans to demolishit (the new PennsylvaniaConventionCenterhad madeit obsolete).More recentlya groupcalledNeighborsAgainstMcPenntrification has protesteda number of matters, including efforts to create anhistoric district in West Philadelphiaand plans to upgraderetail along 40th Street.s But theseflare-upshavenot, sincethe last days of urbanrenewal,forced the school to derail or even seriouslyrevise its plans. BecausePennenjoys an excellentrelationshipwith its city council representative,complaintsfrom thesefringe community groupshave not eruptedinto political battles. In contrast,strainsbetweenTemple and its neighborshave proven more politically costly. John Street, who representedTemple'sneighborhoodin city council for eighteenyears, was frequently at war with the university, most notably with its former president,Peter Liacouras.Typically when

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Templewould proposea projectthat took it outsideof its zonedInstitutional DevelopmentDistrict, Streetwould put up roadblocksto the project until he had exactedconcessionsfrom the school, usually in the form of community projects.6 Beginning in 1985, when Streetheld up the constructionof a researchand developmentcenterto be funded by Bell Telephone,throughthe 1990s,whena major recreationcomplexandtwo dormitorieswerebuilt only after extensivenegotiation,Templefound itself in the unpleasantsituationof carrying out its neighborhooddevelopmentplansin oppositionto its closest electedofficial. Streetis known, even amonghis allies, as a stubbornman who insistson having things donehis way (Bissinger1997).But community battleswith TemplepredatedStreet'stenure;in insistingthat schoolofficials and their associateshavegreaterconsiderationfor the concernsof the neighborhood,he was no doubt reflecting his constituents'views. Temple presidentLiacouras,who is consideredas pugnaciousas Street, made many tactical errors as he sought to move his developmentagenda forward. Even sympatheticcommunity residentscomplainedthat he would presenta plan as afait accompli, leaving Temple'sneighborsno sensethat they could haveany input. He spentsomeeight yearsbattling John Streetto get approvalsto build a largerecreationcenteron WestBroadStreet.Hoping to managean endrun aroundStreet'sopposition,he convincedthe statelegislature, which was funding much of the project, to declareit a stateproject, thus eliminating the city's zoning authority. But the city still retainedother kinds of authority over the site so Liacouras'sstrategymanagedto infuriate Streetwithout actually removing him from the approvalprocess(Goodman 1995). It seemsthat only a changein personnel(Streetwas electedmayorin 1999 andLiacourassteppeddown asTemplepresidentin 2000) and extraordinary fence-mendingefforts on the part of currentTemplepresidentDavid Adamanyhavemadepossiblea less-fractiousrelationship. Conclusions: Political Strategiesof Public and Private Universities Urban universitiesmust cultivate a numberof relationshipson many different fronts to maintainthe friendshipsthat will allow them to carry out their developmentplans.Perhapssurprisinglythesecircumstances havebeensimilar for PennandTemple.Onemight think that Temple,the schoolfoundedto provide eveningeducationfor the city's humble strivers and a stateschool that must be adept at working with political leadersto ensureits support, would be lessenmeshedin town-gownhostilities than Ivy LeaguePenn,but this hasnot beenthe case.If anything, suspicionof Templeis greateramong North Philadelphiaresidentsandleadersthan is suspicionof Pennamongits

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West Philadelphiacounterparts.Explanationsfor thesedifferenceshave as much to do with the schools' histories in their communitiesas with their public or private status. First, althoughPenn'smain campusis larger than Temple's,Temple expandedvery rapidly in the 1960s. It had earlier been a small player in a denselypopulatedresidentialneighborhood,and overnightit becamean expandinguniversityin a shrinkingneighborhoodstrugglingto stabilize.Moreover, North Philadelphiais a poorer,more deterioratedpart of the city thanis West Philadelphia.Whereasabout20 percentof WestPhiladelphiaresidents live below the poverty line (Rodin 2001), in the North Philadelphiacommunities closestto Temple the figure is over 50 percent(Young 2000). Thus Penn is a long-time anchor in a relatively organizedcommunity, whereas Temple has a shorter history in a more volatile neighborhood,producing very different kinds of relationshipsin the two cases. WestPhiladelphia,moreover,is hometo severalnonprofitinstitutions(most notably Drexel University), and Pennhasworkedeffectively with them, earlier through the West PhiladelphiaCorporationand more recently through the University City District. This cooperationallows Pennto extendits impact, and it also servesto deflect potentialcommunity oppositionfrom the university to the largerWest Philadelphiainstitutional network. By contrast Templeis essentiallythe only major institution in its area.It hasfewer natural allies as it pursuesits developmentagenda,and community leadersare more likely to focus their energieson scrutinizingits actions.Fairly or not, many neighborhoodresidentslook to local institutions to provide the benefits that, much to their frustration, their city governmenthas failed to provide; in North Philadelphiathe servicedeficits are very great, and Temple becomesthe targetof local dissatisfaction. Third, Pennstudentsand faculty may have a greatersenseof connection to West Philadelphiathan Temple studentsand faculty have to North Philadelphia.Although Pennstudentsand faculty are drawn from aroundthe nation andthe world, most studentslive on campusor nearbyandmany faculty live in nearbycommunities.Indeedwhen Pennnegotiateswith community groups,it is often negotiatingwith Pennfaculty andstaff who are also neighborhoodresidents.Templestudents,on the otherhand,are far more likely to hail from Philadelphiaor its nearby suburbs.Most commuteto school and feel little attachmentto the neighborhood,althoughthere is a growing student presenceon campus.Templefaculty, likewise, seldomseekhousingin the public projectsand dilapidatedrow housessurroundingthe campus. Finally, Penn'sresourcesand its institutional independenceenableit to becomeactivein communityprogramsto a degreebeyondthereachof Temple officials. As a well-endowed,financially stable, private institution, Penn's

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leadershiphas the flexibility to invest its resourcesas it seesfit. Pennofficials are quick to point out that there are many demandson their resources, andin interviewsall haverejectedthe ideathat they havesimply boughttheir way to improved community relations. And to be sure, recent Pennpresidentshave exercisedeffective leadershipin West Philadelphia,formulating and carrying out well-integratedprogramsthat have deservedlywon widespreadsupport. Pennhas a greaterability than Temple to fund community developmentinitiatives and underwritethe costsof other projectsthat help promote good relations, from studentinternshipsto paid community relations staff, to sanitationand securityservices.Moreover,Pennhasthe stability to commit itself to long-term projects. At least some of Temple'spolitical difficulties of the 1980s and 1990s were self-inflicted, andLiacouras'shard-knuckletacticsat times might have hurt the university's interests.As a state school, Temple battles each year with the legislaturefor its funding; it haslessflexibility in decidinghow this moneyis spentandis less ableto commit its resourcesto long-termprojects. North Philadelphiaresidents,and many electedofficials, however, expect Templeto duplicatePenn'slevel of communityinvestment,andthey are disappointedwhenTemplefails to meetthis standard. For both PennandTemple,expandingtheir campusesand upgradingtheir surroundingshave beenclosely tied to their core institutional missionsfor severaldecades.Both havesoughtto accommodatenew facilities and introduce amenitiesthat make campuslife more attractive,and both have relied on multifacetedpolitical supportto achievethesegoals. In seekingsupport for their developmentactivities, theseuniversitiespursuestrategiessimilar to thoseof other developersseekingto cultivate good relationswith elected officials who are importantto realizing their goals. But universitieshave to rely on a more nuancedlist of strategiesto achievethesegoals, strategies that are relatively similar for public and for private universities. Notes 1. Interviews with university and civic leadersfamiliar with the University of Pennsylvaniaand Temple University haveprovidedsomeof the information in this chapter. 2. Community memberswere especiallysuspiciousof Temple'sefforts to provide housingfor moreof its studentsor staff, fearing that their presencewould transform the neighborhoodin ways that would not benefitcurrentresidents. 3. During his battlesover Temple'srecreationcenter,PeterLiacourasdid once threatento relocatemany of Temple'sprogramsto its suburbancampus(Weyrich 1998). This threat was not taken very seriously,but it indicateshow poor relations betweenTempleand cityofficials had become. 4. IndeedStreet'sill will toward Temple University, and particularly its recent

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pastpresidentPeterLiacouras,was inflamedby his closeconnectionsto the school. In the mid-1980sStreetwas servingon the city council and teachingpart-timeat the Temple Law School, when the pressreportedthat he still owed the school several thousanddollarsin unpaidstudentloans.Street,accordingto oneinterviewee,always believedthat Liacourashad providedthis informationto the pressto embarrasshim, and the incidentfed a mutual antipathy. 5. The group complainsthat Pennpromotesgentrificationin surroundingneighborhoods.It alsochargesthatPennis responsiblefor the openingof a new McDonald's restauranton 43rd Streetthat, allegedly, Pennhas promotedin an effort to close a McDonald'son 40th Street,closerto the heartof the campus.Accordingto this claim the university wantsto move the fast-food restaurant,with its low-incomeclientele, away from its own plannedretail improvements. 6. The PhiladelphiaCity Council practicesa form of "councilmaniccourtesy," refusingto act on any bill opposedby the representativeof the affecteddistrict. This gives a representativede facto veto power over any major developmentin his or her district.

References Bissinger,Buzz. 1997.A prayerfor the city. New York: RandomHouse. Dean,MensahM. 1998.Not alwaysacademic.PhiladelphiaDaily News, September 29: 8. Goodman,Howard. 1995.Apollo projectlanguishedundercloud of mistrust.Philadelphia Inquirer, November5: B4. Gorenstein,Nathan,and Cynthia Burton. 2001. New city agencywill work to lure high-techfirms. PhiladelphiaInquirer, February8: Ie. Initiative for a CompetitiveInner City andCEOsfor Cities (ICIC). 2002.Leveraging collegesand universitiesfor urban economicredevelopment:An action agenda. April (www.icic.org). Kantor, Paul, andH. V. Savitch. 1993. Canpoliticians bargainwith business?A theoretical and comparativeperspectiveon urban development.Urban Affairs Quarterly 28(3): 230-255. Lussenhop,Tom. 2001. University community development,CUED EconomicDevelopmentQuarterly, Summer. Rodin, Judith. 2001. Commoncause:Investing in the community. The Presidency. Spring. TempleUniversity. 1986. TheAcademicPlan. Philadelphia:TempleUniversity. Weyrich, Noel. 1998. The trouble with Temple. Philadelphia Weekly,August 26: 16-21. Young, Eami. 2000. Tech centerraiseshope. Philadelphia Daily News, September 25: 13.

Section 3 The University as a Collaborator in Urban Development

8 The University as an Engine for Downtown Renewal in Atlanta Lawrence R KeJley and earl

v. Patton

Severalbillion dollars in developmentis under way in downtownAtlanta, including numerousprojectsinitiated by GeorgiaStateUniversity. Working to make itself part of the community, Georgia State, along with its private foundationand businesspartners,has developeda variety of building projectsthat are breathinglife into the downtown area.Without a city masterplan for the centralcore, the university took on a planningprocess and becamethe lead institution in redevelopingthe downtown area.This chapterdescribesthe university'slearningprocesswith its partners,how it built support,utilized two private foundationsto float bond issues,leveraged private funds, and developedthe expertiserequired to rebuild itself and downtownAtlanta. Georgia State now serves40,000 studentsannually from 145 countries, but it was foundedby the GeorgiaInstitute of Technologyin 1913 as its eveningschoolof commercewith an initial classof six studentsin rented downtown office space.The school quickly developeda strong reputationfor its academictraining in businessand moved severaltimes to accommodateincreasesin enrollmentand academicscope.It eventually located permanentlyjust east of Atlanta's central downtown Five Points area(seeMap 8.1). By the late 1960sthe schoolhadbecomeGeorgiaStateUniversity, with six colleges,a campusof a dozenbuildings, and an annualenrollmentof 12,000students.Throughoutthe 1970sand 1980sthe university continued to grow but the downtown businesscommunity surroundingthe campus lost much of its vitality. Many downtown corporationsrelocatedto new spaceoutsidethe downtown core. The state,county, and city government operationscontinuedto expandsouth of the campus,but remainedphysically isolatedfrom the businesscommunity. 131

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Map 8.1

•

Georgia State University Campus

Existing University Buildings

•

Main Street Projects 1. Standard Building

2. Rialto Cenler for the Performing Arts

University Parking Non-University Property

3. Haas-Howell Building 4. Aderhold Learing Center S. Bennett Brown Commerce Building 6. One Park Place South 7. Science Teaching and Research laboratory 8. Student Activities Center 9. Student Recreation Center 10. University Lofts

Source:Usedby permissionof the SizemoreGroup,Atlanta, Georgia.

A Vision for Growth Carl Patton becamepresidentof GeorgiaState in 1992. An urban planner and academicleader,he had extensiveexperiencein urbanplanning,university campusplanning,and economicdevelopment.He wantedthe university to be a part of the community and believedthat the university should focus

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on measurableresults and be accountable.These themesguided Georgia State'sinitial academicstrategicplan that included not only annual action plans and budgetsfor the university but also beganto articulate a broader urbanplan as well. This approachstrengthenedthe bondbetweenthe university and the community and forged personalrelationshipsthat would prove to be decisivein future developmentopportunities.The focus on measurable resultsand accountabilityhelpedassuresupporters,donors,and lendersthat the university would deliver the projectsit proposed. To betterposition the university for development,Pattonmovedinto active leadershiproles with communityorganizations.This involvementalsoallowed him to help reshapemuchof the downtownenvironment.UnderPatton'sleadership,CentennialOlympic ParkArea, Inc. (COPA) leveragedhousingdevelopment around CentennialOlympic Park and began to create a lively twenty-four-hourenvironment.Patton went on to serve as chair of Central Atlanta Progress(CAP), a businesscoalition striving to makeAtlanta a more livable, workable, and safetwenty-four-hourcity. Both COPA and CAP have developedinitiatives that enhancethe projectsGeorgiaStatehasundertaken. The Plan for Development Many universities,even those located in the centerof cities, have tried to separatethemselvesfrom the community.Sometimesthey havedoneso with gatesand fences. Georgia State did this with platforms and catwalks.The platform systemat the centerof the campusraisedit abovethe streetsand sidewalksandcreatedsitting areasandplazasintendedonly for faculty, staff, and students.Today the philosophyat GeorgiaStateis quite different. The university'sacademic,strategic,and fiscal plans focus on being intertwined with the community. A conceptualmasterplan for future campusgrowth was developedin 1994,leadingto the university'sten-yearblueprintfor development,the Main StreetMasterPlan. The conceptualmasterplan was basedon academicpolicies developedthrough the university strategicplanning processled by the university's provost and voted into policy by the university senate.These policies werethentranslatedinto physicalneedsusing a student-facultyteam of plannersandarchitectsfrom neighboringGeorgiaTech'scity andregional planning and architectureprograms.Faculty, students,and staff from the university as well as downtown stakeholdersand alumni participatedin the planning process.This plan gavephysicalform to the conceptof being part of the communityby openingnew and existing campusbuildings to the city spaces andits streetsusinglargewindowsandnew, inviting community-based in which to sit, walk, and congregate.

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This conceptualmasterplan was further developedwhen the University Systemof Georgiamandateda templateto guide planningat all of its thirtyfour institutions.Becauseof the jump startwith its conceptualplan, Georgia State was able to use the templateto devise a more completeplan for its downtown campus.The refined masterplan soughtto transformone of the downtown streetsthat crossesthroughthe heartof the campusinto a pedestrian-friendly "Main Street" corridor by using a traffic-calming project that madeit even easierfor students,faculty, and staff to be a part of the urban experience.! This plan was the product of widespreadparticipation by faculty, students,staff, and neighbors,and it was presentedwidely in the local community and aroundthe stateand nation to alumni groups.It was placedon the universityWeb site wherecommentscould be receivedand shared.The plan as finalized focuseson creatingan inviting campus,outlinesthe construction of severalnew academicbuildings, and is basedon the following principles: • Integrateinstitutionalbuildings andtheir useinto the city environment. • Use existing and plannedstructuresto help define and connectcampus spaces. • Use housingopportunitiesto attractthe populationnecessaryto create a viable community. • Support transportation patternsthat encouragepedestriantraffic and enhancethe safety and convenienceof GeorgiaStatefor students,faculty, and staff. • Createa senseof placeand identity. • Establisha central core of campusfacilities and a secondaryzone of supportservices. The projectsdescribedbelow respondto theseprinciplesin variousways. They are either buildings that place activities at the centerof campusor at streetlevel, facilities that encouragepedestriantraffic along importantcorridors or define the Main Street area, or projects that attract people to the campusfor living or recreation. Funding the Projects

GeorgiaState'sdramatic growth in the early 1990sincreasedthe needfor moreteaching,research,andadministrativespace,andtheseneedswerethen specified in the Main Streetplan. With a rapidly growing state university systemof thirty-four institutions,however,public funding was not available to meetGeorgiaState'sfacility needs.In a goodyearthe statemight provide

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a total of $100million for capital projectsfor all of the state's publiccolleges anduniversitiescombined,but a typical projectat oneof the researchuniversities could be $50 million or more.2 Sinceindividual institutionsin Georgia areprohibitedfrom issuingbondsthemselves,GeorgiaStatehadto find other funding sourcesto supplementstateappropriations.This challengeled to a decadeof new institutional practicesin leasing,acquiring,and building new facilities, with eachdeal being more complicatedthan the last. To gainfinancial flexibility, the universityworkedthroughits privatefoundation, the GeorgiaStateUniversity Foundation(GSUF), which playedseveral importantdevelopmentrolesrangingfrom financial intermediaryto bond issuerto funding source.Stateof Georgiaentitiesare not allowedto contract for servicesfor morethanoneyearat a time. Thus a universityby itself is not able to float a bond issue or enter into an agreementto leasea facility for more than one yearat a time. This situationmakesit impossiblefor a university to enterinto a real estatedeal without a third party that is willing to act as an intermediaryand acceptthe risk of one-yearcontracts.This is one of the roles that GSUF played. An entity suchas GSUF can also serveas a sourceof risk capital, helping to finance up-front costsof development,such as title searches,options on land, and legal fees. GSUF directly funded someof thesecostsfor the university and loaned the funds for other expendituresto be paid back from projectcosts.GSUFalso helpedraiseprivate funds to coverthe gapbetween statefunding and total costsfor someprojectsand arrangedbond financing for others.In additionthe foundationpurchasedpropertyoutright that it later leasedto the university to meetpressingspaceneedsthat could not be met by the state. The first GSUF project was the acquisitionin 1992 of a 136,500-squarefoot office building that it now leasesto the university. The university paysa square-footrental cost. The facility housesoffice, classroom,and research functions and createsa net cashflow for the foundation. GSUF leasesthe facility to the university on a year-to-yearbasissince, as mentionedabove, statelaw prohibits the university from enteringinto multiple-yearleases.3 GSUFin 1994acquiredcontrol of threebuildings and the land undertwo of them to supportthe university'smusic programand the developmentof a centerfor performing arts. The project included the renovationof the three buildings. Financingwas achievedthrough $10 million in private contributions to GSUF and $4 million in bondsissuedby the Downtown Development Authority of the City of Atlanta, with the proceedsassignedto The University FinancingFoundation(TUFF), an independentfoundation supporting higher educationdevelopment. GSUF leasesthe facilities from TUFF and subletsthem to the university

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througha seriesof one-yearrenewableleases.The leasepaymentsareserviced with operatingrevenuefrom theperformingartscenteraswell astheuniversity's generaloperatingbudget.The fifty-year groundleasefor the performing arts centersite will resultin the reversionof the building to the ownerof the land at the end of the leaseperiod. Ownershipof the other two buildings, which housethe Schoolof Music, will revert to GSUF when the debt is expired. Also in 1994 the university acquiredpart of the site for its new student activities centerthrough an agreementwith the City of Atlanta, negotiated betweenthe mayor and the university president.The university paid half of the cost of the neededsite in the form of a $500,000line of credit against which city employeescould draw to financetheir educationat GeorgiaState. The city's new police chief will be the most recent city employeeto take advantageof this arrangement.The bond issuefor the studentactivities center is being paid off through a dedicatedstudentactivities centerfee. Anotherreal estatedeal in which the university was involved enabledthe former downtown Atlanta headquartersof First Union Bank to becomea condominiumdevelopment.GSUF was offered the building as a gift, but concludedthat renovationfor academicneedswould not be feasible.A deal was struck in which First Union tradedthe bankbuilding to a local newspaper in exchangefor a line of advertisingcredit; the newspaperthen gavethe building to GSUF, which then sold the building to a local developerat a price that allowedthebuilding to be convertedinto condominiums.The bankgained advertising and wrote the building off of its books at its basis value. The newspapergaineda charitablecontribution, andthe new housingnearcampus benefitedthe university and addeda little more life to the downtown.4 The university next steppedup to answerthe questionabout what would happento downtownAtlantain the wakeof the 1996SummerOlympic Games. GeorgiaStatehad servedas a commuterschoolfor decades,but that would changewith the establishmentof a housingdepartmentin 1993, in anticipation of the 1996 SummerOlympics. Historically being prohibitedfrom developing housing by the Regentsof the University System,the university agreedto purchasethe Olympic Village after the gamesfor use as undergraduatehousingwhen otherpotentialusersbackedout. The Regentsissued $85 million in debtfor the purchase.Studentrent paymentsservicethe debt. The GeorgiaStateVillage openedin fall 1996with a 2,000-studentcapacity. Operatedas an auxiliary service, the facility has developedan annual waiting list of 400 to 800 students.The village is locatedon nine acresoneand-a-halfmiles north of the campuson the edge of downtown and along oneof the city's rapid rail transitlines; eachresidentreceivesa transitpassas part of his or her rent. To constructa studentrecreationcenteras the nextphaseof addingstudent

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life to campus,GSUF leaseda campusparking lot from the university in 1998 as the developmentsite.s The Atlanta DevelopmentAuthority (ADA) issuedtwenty-yearbonds with the proceedsloanedto GSUF for the constructionand equippingof the recreationcenterand the expansionof an existing parkingdeckto replacethe lost parking.The recreationcenteris located acrossthe streetfrom the studentactivities centerthat hadbeenbuilt in 1995. The recreationcenterbondsare speciallimited obligation bondspayable pursuantto a promissorynote betweenthe ADA andGSUF, which leasesthe facility to the university on an annual basis.A recreationfee paid by the studentsprovidesthe revenuestreamfor paymentof the lease.Ownershipof this building will revert to the university when the bonds are retired. The recreationcenterwasopenedin August2001 andservesapproximately2,500 usersa day.6 Overthe yearsthe campushadgrown westwardacrossPeachtreeStreetto acquireoffice spaceto housea growing faculty. Becausetherewas no classroom building serving the three collegeshousedwest of PeachtreeStreet,it was deemedessentialthat a classroomfacility be constructedin this vicinity. Virtually all of the city blocks in this areawere occupiedby recently renovated or older substantialbuildings, save one block with vacant structures scatteredamongretail and office uses. The Regentsagreedto provide $23 million toward a $40 million classroom building, but following a long-standingpracticewould not provide funds to purchaseland in downtownbecauseof its high cost and an antiurban bias of the legislature. Thisfinancial shortfall left the university with the challengeof finding private funding for the acquisition of the block, demolition of the existing structureson the site, and constructionof part of the new facility. The acquisitionof the city block was controversial sincesomeof the derelict buildings had historical connections.One was a former restaurantthat had been the site of sit-ins during desegregation.Another was a building designedby the firm of a famouslocal architect.A small but vocal group of historic preservationists held thatthe universityshouldrenovatethe old buildings. The university'spositionwas that the resultwould be an inefficient and costly structure yieldingpoor results for its studentsand an equally poor accountingof both public and private funds. The preservationistsheld a small rally opposingthe university'sacquisition of the block, andmembersof the university who would benefitfrom the new building held an anti-rally punctuatedby music playedby studentsand faculty of the Schoolof Music, which would havepracticerooms on the top floor of the proposedbuilding. A flurry of pro andcon lettersappearedin the local paper, and one newspaperwriter, whose architectfather had addeda

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false facadeto one of the buildings decadesearlier, took on oppositionto the project as a personalcause.The irony was that all but one of the landowners was happyto sell. An old, well-loved "greasyspoon"on the block was even guaranteeda relocationspacein the new building. The lone holdout would not negotiatea selling price. The university successfullyacquiredthe block using a court-appointed SpecialMasterto resolvethe price of the last parcel.Becauseof the controversy over acquiring the site, the university presidentappointeda citizen advisory committee to give advice to the architects.The committee was chairedby a highly regardedlocal businessman andincludedthe deanof the Collegeof Architectureat GeorgiaTech,individualswho hadsold their property on the block to the university, preservationists,alumni, and downtown businessowners. The committeereviewed the architecturaldesign of the building and provided continuing input to the architecturalfIrm. This processassuredthat the building would fIt into the contextof the neighborhood and maintain the streetfabric in the historic area.The result was a building that evenformer critics describeas breathtaking. GSUF succeededin raising more than $13 million so the land could be gifted to the university for the constructionof the classroomfacility. The building openedfor classesin the fall of 2002, bringing 3,000 studentsper hour to the centerof the city. Tackling a Complicated Housing Deal

Building on its experiencesthus far, the university wantedto tackle another importantneed-housingfor graduateand internationalstudents.By 2000, 30 percentof total studentenrollment wasgraduatestudents,and international studentsfrom 145 countriesaccountedfor 6 percent.In additionGeorgia Statehad experienceda tripling of researchfunding during the 1990s, with an accompanyingincreasein the number of graduateresearchassistants. Expecting continuedgrowth in researchand enrollment, the master plan called for doubling the numberof studentsin university housing to a total of 4,000 by 2007. The plan for graduate,family, and internationalstudenthousing would becomethe most complicateddeal yet. The reality of the situation was that the university lackedboth moneyandland to commit to a housingproject,as well as a substantialendowmentor a long history of fund-raising. Furthermore it did not want to acceptrisk for itself or its foundation.The university decidedto usetwo foundationsto structurea nonrecourseprojectthat would be built for the universityon land it did not own andthat the universitywould operate.This approachallowedthe universityto provideinput on the location,

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design,andconstruction,eventhoughit might not own the new housing.The universityalsowantedGSUFto benefitfrom any netproceedsfrom theproject. A market study and demandanalysis conductedin 1999 identified the needamongexisting graduatestudentsfor up to 700 bedsnearcampus.Under ordinary circumstancesthe university could haveworked with any number of developersto procureprivatizedhousingbuilt on university land with arrangedfinancing. In thesesituationsthe university'srole hasbeento demonstratethe demandand agreeto refer students.Unfortunatelyat that time GeorgiaStateowned no vacantland, and none of the major playersin student housingdevelopmenthad control of land nearthe university. NonethelessGeorgia State was determinedto get a high-quality, handsomebuilding nearcampusat the lowest possiblerental coststo students.In addition the university wantedto be able to operatethe facility sinceit would be seenas responsiblefor anything that might occur there. Essentiallythe university was willing to accepta morecomplicateddealin orderto get more control over the finished product, which it did. The housing that has been built is in the popular loft style with open floor plans, high ceilings, fully furnished kitchens, and individual bathrooms.In addition the university's housingoffice has an annualcontractto operatethe facility. To createthis housing the university engagedan experienceddevelopment managementfirm to overseethe project. The developmentmanager took the university's specificationsand selectedTUFF as an independent foundationto be both the financing vehicle andthe ownerof the facility. The firm designedprototypehousingunits for the students,defineda searcharea for the projectin closeproximity to the university, preparedan initial budget for the project, createda requestfor proposals(RFP) andgatheredproposals from developers.The developmentmanageralso conducteda seconddemand study that confirmedthe previousstudy'sfinding that existing graduate studentswantedstudenthousingand would pay a marketrate for it. With advicefrom the university housingand facilities staff, the developmentmanagercalledfor potentialcontractorsanddevelopersto identify sites anddevelopmentconceptsacceptableto the university.The responseidentified only a few locationsto be considered,and none was on land ownedor controlledby the university or the developers.The most attractivelocation turnedout to be a 1.S-acresurfaceparkinglot contiguousto campusthat was ownedby a local hospital,which wasinterestedin maintainingownershipof the land while increasingrevenuefrom the location. The hospitalandTUFF subsequentlyagreedto a forty-year leaseof the land for the studenthousing. The hospital was receiving revenuefrom the leasedoperation of the parking lot on which the university wantedto build the housing.The deal includeda buyout of the agreementwith the privateparking lot operatorand

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a promiseto the hospitalof increasedfuture revenue.The hospitalboardwas cautiousabout the changeof use and the forty-year lease,but the development managerworked closely with the hospital staff and board to build a deal that was acceptable.GeorgiaStatePresidentPattonhad alreadyestablished a good relationship with the hospital'spresident,governing board, and legal team during his previous service as board chair of the hospital's HMO. When it cametime for the housingdeal to be developed,theserelationshipshelpedwhen the negotiationshit the inevitablebumpsin the road. Therealso were issuesrelatedto city restrictionson the size of the building, the relatedsetbacks,and propertytax exemptionsthat neededto be addressed.If the existing restrictions were accepted,the building could not have beenlarge enoughto generatethe neededrevenueto servicethe debt and cover operatingcosts. The developmentmanagerand university staff helped the governmentagenciesunderstandand approvethe project. One particularconcessioninvolved having the city define the structureas a longterm-stayfacility similar to a hotel. In doing so the setbackswere reduced and the footprint of the lofts could cover the entire parcelof land. With the land and the owner identified, constructionproposalsfor the facility could proceed.Independentestimatorstestedconstructioncosts,and negotiationsled to a fixed-price contractfor the new facility. Financingfor the project was expectedfrom bond proceeds,and work beganon selecting underwriters,bond counsel,and insurers.The Fulton County Development Authority issuedthe bonds.Ambac AssuranceCorporationof New York issuedan insurancecommitmentto insurethe timely paymentof the principal and intereston the bonds,andthe bondswere sold with an AAA rating from StandardandPoor's.The insuranceandAAA rating reducedthe interestrate at which the bondscould be marketed.The final structureof the ownership and operationof the facility includes: • an inducementagreementbetweenthe university andthe owner(TUFF) • a groundleasefrom the hospitalto TUFF • a facility leasebetweenTUFF and a limited liability corporation(LLC) formed by GSUF • a managementagreementbetweenthat LLC and the university. The inducementagreementwas critical to obtainingtax-exemptstatusfor the bondsby providing evidenceofthe relationshipbetweenthe university's missionandthe project, sincethis statusallowed the costof the projectto be reducedandtheresultingrent to be moreaffordable.In the inducementagreementGeorgiaStateencouraged TUFF to develophousingprimarily for graduate and married studentsattendingthe university and promisedto identify

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this housingto studentsas part of the inventory of studenthousing.The university also promised,as a part of this agreement,not to enterinto another private developmentagreementfor a studenthousing project without first conductinga marketdemandstudyto identify need.Thatmarketstudywould include the graduatehousingfacility in the inventory of existing space. The bondswere sold on April 25, 2001,and groundwas brokenthat same day for a fourteen-storyloft-style housingfacility for graduateand international studentsand their families. The structureincludes231 fully furnished units for 460 residentswith attachedparking and street-levelretail space. While the projectresultedin a beautifulbuilding for GeorgiaState'sstudents on land not ownedby the university and without using university funds, the lease-updid not go as well as expected.Ownershipissueschangedas the projectdeveloped,governingauthoritiesexpressedpositionsfocusedon their organizations'sometimes-narrowviewpoints, and graduatehousing was a new kind of endeavorfor GeorgiaState. Whenthe GeorgiaStateVillage hadopenedto undergraduates a few years before, the university anticipatedonly partial occupancyin the first year. A numberof factors were at work to promotethe facility, however:the novelty of its history as Olympic athletehousing,the hyperpublicityof the Olympic Games, anda backlogof demandfrom students.The Village leasedquickly the first year and was fully occupiedfor subsequentyearswith a waiting list of hundredsof students.The university expecteda similar demandfor units in the Lofts project. Prior to developmentof the University Lofts, demandstudiesindicateda need for housingamong the university'scurrent graduateand married students.Probableprices were shownin the demandstudiesand the response was favorable, but severalfactors were not recognized.For example,when graduateand marriedstudentsmove into a complex,they generallydo not move again during their academiccareers.Consequentlyinitial demand for the lofts was overestimated.Furthermoresince graduateand married studentsare operatingin the largermarketplaceto identify and selecthousing, graduatestudenthousingmust be marketedin a more aggressiveand competitivemannerthan is the casefor undergraduatehousing.The university housing division was not experiencedwith the necessarylevel of full-fledged marketing, and the Lofts openedin fall 2002 without a full complementof tenants. Timing was not in the university's favor either. The downturn in the economycaused othercompetingprivate housingvenuesto cut their rents, offer various concessions,and generallyappear,on the surface,to be better deals than the Lofts. Potentialrentersmay not have looked past the quick price comparisonsof baserentsadvertisedby competitorsto seethat the loft .

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rents included furniture, all utilities, local phone service, Internet connections, and no commutingcosts. The fast track establishedfor completionalso hurt the university'sability to show finished units early enoughto attractsomepotentialresidents.With no model units to show, many potentialresidentsmadeother housingdecisions. The advertisedguaranteeof housingin nearbyhotels in the unlikely eventthe Lofts building was not finished, which seemedlike a good idea at the time, promoteda senseof uneasinessamongpotentialrentersandfrightened some away. Meanwhile the local economycontinuedto decline, numerous companieshad layoffs, and the rental housing marked in the city collapsed.Apartmentcomplexescontinuedto cut their pricesand offer several monthsof free rent and other inducementssuchas enteringnew renters into raffles for SUVs. In an attemptto be competitive and attract tenants, University Lofts offered a free month'srent as an inducement,but this was the first year. On too little andtoo late. The Lofts wereonly 65 percent rented the plus side the university neededadditional facultyoffices and was able to rent one floor of the new facility to meetthat need. A beneficialfinancial deal and a beautiful new facility are not necessarily sufficient conditionsfor success,anddemandstudiescanbe misleading if not completelyinaccurate.Even with thesedifficulties, the Lofts project is an important addition to the campusand the downtown neighborhood, and fortunately the project pro forma is being met. To assurefull occupancy for the 2003-4 academicyear, the university presidentconvinced the financial partnersin the deal to reducetheir revenuesfrom the project and thus lower the rents an averageof $100 per month per unit. In addition the university's presidentialand honors scholarsand scholarshipathletes were housedin the Lofts insteadof receiving a housing allowanceto be usedelsewhere.The local housingmarkethasnow recovered,andthe Lofts have a waiting list. Using what it learnedfrom theseprojects,GSUF is now preparingto dehousingseveralblocks north of the camvelop 2,000 unitsof undergraduate puson a six-acresiteit recentlypurchasedfrom an autodealershipthatclosed. The demandfor this housing has beenmeasured,accuratelywe hope, and groundwill be brokenin 2005.7

LessonsLearned Successwith any projectbeginswith a clearvision of the future and an institutional commitmentto makethat future happen.A track record of measurablesuccesses andfinancial accountabilityalsohelpsto convincestakeholders that a certainlevel of risk is acceptable.For GeorgiaState,beinga part of the

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communityand working to build a relationshipwith the downtownbusiness community formed a solid basefor success.The university has learned a numberof lessonsthroughtheseincreasinglycomplexprojects. First, build foundationsinside andout of the institution. For GeorgiaState it was importantto build a firm foundationwithin, involving the entire university community in creatinga sharedvision. Since the growth of the university dependsheavily upon the ability to acquirequality facilities, it was important that the university community, especiallythe faculty, understand the vision and not waver whenthe going becamedifficult. Equally important was building foundationsoutsidethe institution. This lessonprovedparticularly helpful by the time the university reachedthe University Lofts project, which involved numerousgovernmentalandindependentagencies.This strategy placesthe university in a sensitiveposition, however. Having called on thesefriends also means thatthey call on the university to give backto their causes,includingfund-raising,servingon boards,anddelicateissuesinvolving requeststhat the university purchasetheir services.It also requires occasional explanationsthat the businessof the university is availableon a competitive basisand that friends have open opportunitiesfor that businessbut are not specifically advantaged. Second,build on successes.Creating a sharedvision, building relationships,being awareof the opportunities,andrelating themto the vision of the universityhelpedGeorgiaState.The time spentin masterplanningandpreparation earnedcredibility and acceptabilityin eachof the projects. Georgia Statecould not have enteredthe deal for the complicatedUniversity Lofts project without previous successfulexperiencesin leveragingfunds and issuing nonrecoursebonds. In the smaller, earlier projects, the university gained experienceand built confidenceamong its businesspartners.The relationships,funding mechanisms,and legal solutions developedalong the way allowed administratorsto find the meansto make the more complicated dealswork. Third, beflexible. During the Lofts project,the operatingstructurechanged late in the deal. Originally TUFF was to own and operatethe facility, and GSUF was not involved at all, since a specific goal had beento assurethat the university and GSUF acceptno risk in the project. However,bond counsel identified a concernaboutthe tax-exempt-status eligibility of the bonds, which required closer involvement by GSUF. If the bonds were not taxexempt,interestrateswould havebeensignificantlyhigher,resultingin higher project costs and higher rents. In responseto this issue, documentswere drawn for risk protection,and GSUF becamethe leaseholderthrougha limited liability corporationit created.Thus GSUF found the flexibility to accepta new role, andthe creativity of thoseinvolved kept the projecton course.

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Fourth, strengthenthe university foundationboard.In the early 1990sthe university and GSUF did not have the expertiseto addressthe complicated issuesinvolved with projectsthat camelater. The early, less-complexprojects strengthenedthe abilities and confidenceof the GSUF board membersand university administrators,preparingthem for the twists and turns of future deals.GSUF boardmembersdevelopeda clearunderstandingof the university vision, and this strong buy-in to the university vision resultedin more creativedevelopmentapproaches.Over ten yearsGSUF movedfrom a foundation that essentiallyprovidedstewardshipover private funds raisedfor the university to becomea dynamic foundation that aggressivelysupportsthe university'sdevelopmentplan as financier, developer,and businesspartner. Fifth, developprivate giving and the ability to securebond funds. Time and again GeorgiaStaterelied on the skill of its private foundationand developmentofficers for help with privatesupport.Financialtargetsestablished for developmentremainedsomewhatfluid and the ability to generatesupport roseto meetthe needs.But sinceGSUFbelievedin and was committed to supportingthe university'sdevelopmentprogram,funds were always locatedto finance the neededprojects.In addition GeorgiaStatefound a way to issuebondsthroughGSUF and cooperatingfoundationswhen statefunds were not available. Conclusion GeorgiaStateUniversity has servedas an enginefor downtownrenewalin Atlanta. The leadershipof the university worked closely with the business community and the city, thus allowing GeorgiaStateto developthe facilities it needsto meetits mission.The university'smasterplan, which identified its academicgoals and advancedthe university as an active member of the downtown community,led to a mutual understandingthat helpedto promote success. The university involved community leadersand neighborsin developing the physicalplansfor the campus.Communityadvisorygroupsworked with the university to be surefacility designsfit with the neighborhood,and businessleadershelpedGeorgiaStatein its capitalcampaignsboth by giving and by openingdoorsto gifts from others.Positiverelationshipswith the mayor and city staff led to assistancewith certain projects and flexibility in code interpretation. To someextent GeorgiaStatehas beenits own worst enemyin thesedevelopmentendeavors.The university'sinitial investmentsin downtown renewal did keep the lights on, but at the sametime theseinvestmentspushed up the priceof the real estatefor the universityandotherstakeholders.Georgia

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State'sactions that resultedin new life for old buildings also whetted the community'sdesireto havethe university take over other old buildings that would "savethe downtown." Even thoughGeorgiaStatemadeit as clear as possiblethat university projectswould be focusedon meetingthe academic and servicegoals of the institution, someprojectshavebeenbrought to the university "for the good of the community" and havebeenrejected. To meetthe missionof the university andservethe students,faculty, staff, and guestswho enjoy the campuseachday, GeorgiaStatehasbeenan active player in renewing downtownAtlanta. Students,faculty, and staff are now involved in and are a part of the community. The GeorgiaStatepresenceis obvious on the streets.This involvementhas certainly beena benefit to the university, and, we believe, to the entire downtown community.

Notes 1. TheAtlantaRegionalCommissionhasprovidedfunding to plan for the trafficcalmingprojectfor the DecaturStreetcorridor, with drop-off lanes,wider sidewalks, and landscaping.Constructionis being supportedby federaland university funds. 2. The four researchuniversitiesin the statesystemarethe University of Georgia, GeorgiaInstitute of Technology,the Medical Collegeof Georgia,and GeorgiaState University. 3. Another project at that time involved upgradingthe former C&S Bank headquartersoffice building. The facility was a gift to the universityfrom NationsBankin building andbecameBank 1992asit movedout of downtownto its new headquarters of America. This historic and architecturallysignificant building becamethe home for the university'sJ. Mack RobinsonCollegeof Business. 4. The university hassincealso acquiredthe historic CommerceBuilding, housing the CommerceClub, a private club where many importantcivic decisionshave beenmade.Acquiring the building allowed the CommerceClub to downscaleand rent a reducedamountof spacefrom the university, enablingit to stay in business. The university usesthe balanceof the building for meetingsand office space.The building acquisitionwas financedby gifts from NationsBank,now Bank of America, and a private foundation. Substantiallegal work went into clearing up the ground leasesunder the building, including cancelinga provision that the building be tom down at the end of the groundleaseand the land be returnedto the original owners. 5. Also in 1998 GSUF acquiredland in Alpharetta,a northernsuburbof Atlanta along the high-techcorridor, and built a classroombuilding for graduateeducation, continuing education,and outreachefforts of the university to replacean existing closer-in facility. Funding for this project camefrom bondsissuedto GSUF by the DevelopmentAuthority of Alpharetta.GSUFsubletsthe facility to the universitywith annualleases.The ownershipof the facility and land will remain with GSUF even after the debtis expired.In this caseuniversity staff membersdevelopedstrongworking relationshipswith theAlpharettamayorandcity council andhelpedcampaignfor the bond issuereferendumto finance this development.Public speaking,lawn-sign distribution, and otherpublic relationsefforts paid off when the bond issuereferendum passedby an overwhelmingmajority.

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6. A pendingproject involves a city block adjacentto campusthat had beenacquiredby the statethrougha land swapwith the city. The governorat that time agreed with GeorgiaStatethat the propertywasideal for universityuse.Approachingthe end of his term and wanting to move quickly, he initiated efforts to transferthe entire block to the universityby executiveorder.However,onestaffmemberat the Boardof Regentsexpressedconcernsaboutacceptingany land without full due diligence related to soil conditions.Even with a benign PhaseI environmentalreport, the staff memberprevailedand the property was not transferredto the university. Since that time otherstateagencieshavecomeforward to seekthe land in question.The discussion continueson this issue,as do the frustrations.Two governorslater, as this book was going to press,the land hadbeentransferredto the university for constructionof a $200 million sciencepark. 7. The foundationis also helpingto raise$25 million in nonstatefunds to match $45 million from the statefor a new $70 million scienceteachinglaboratoryto be locatedon the campusMain Street.

9 University Involvement in Downtown Revitalization Managing Political and Financial Risks Scott Cummings, Mark Rosentraub, MalY Domahidy, and Sarah Coffin

A Tale of ThreeCities: Downtown Revitalizationand the Urban Crisis Indianapolis,Louisville, and St. Louis havemuchin common,in additionto their geographicproximity in America'sheartland.By 1960 all three cities were beginningto experienceseriouschangesin the demographiccharacteristics of their residentsand were rapidly losing businessand industry to the suburbs.The downtownsin all three cities were rapidly declining and the fragmentednature of local politics made it difficult to achieveconsensus among businessand political leadersabout how to addresstheseincreasingly seriousproblems.The magnitudeof the problemsfacing eachcity and its leadersreflected all the componentparts of what plannersand policy analyststhroughoutthe 1970sand 1980spessimisticallylabeledthe "urban crisis" (Ames et al. 1992). Irrespectiveof debateover the accuracyof the term, by 1980the downtownsof Indianapolis,Louisville, andSt. Louis were deepin crises,and werebeinglabeledby many observersas "rustbeltcities." Early in the 1960spolitical and corporateleadersin Indianapolispublicly agonizedover their city's declining influencein its regionaleconomyandits lacklusternational image. During an appearanceon a late-night talk show, favorite son Kurt Vonnegutdescribedthe city as a cemeterywith lights that cameto life one day a year for the Indianapolis500. Earlier John Gunther (1949,387)in his book Inside U.S.A. describedIndianapolisas "an unkempt city, unswept,raw, a terrific placefor basketballandautoracing,anda former pivot ofthe Ku-Kluxers." In the mid-1970sa nationalsurveyby a local community group found the city had "no image" in the nationalmediaor among 147

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CUMMINGS, ROSENTRAUB, DOMAHIDY, AND COFFIN

conferenceplanners(Walls 1999).While the "no image" label was a bit better than somerepresentationsof the city, by the late 1970s it was clear to local leadersthat somethingdramaticwould be neededto changethe view of Indianapolisheld by both residentsand outsiders. Approximatelyninety miles to the south,Louisville wasundergoingsimilar changesin its fortunes.In 1950the populationof Louisville was 369,129;by 1960it had grown to 390,636;by 1980only 298,451peoplelived in the city; and by 1990 this figure dropped to 269,063. Thesepopulation shifts mirrored the underlyinggrowth of the suburbssurroundingthe city, the flight of businessand industry to other regions of the country, and the changing racial compositionof Louisville's residents.The cumulativeeffect of deindustrialization, capital migration, and disinvestmentradically changed the city's occupational structure(Cummings and Price 1997). Louisville lost 16 percentof its manufacturingjobs during the 1970s (Birch 1982). The city's decline in manufacturingwas matchedonly by the experiences of other rustbelt cities devastatedby deindustrialization(Akron, Youngstown, Gary, and JerseyCity). Crouch (1989) estimatesthat by 1988 Louisville's manufacturing workforce was approximately88,000,a figure representingthe loss of about 32,000manufacturingjobs overa fifteen-yearperiod.Major layoffs occurred at GeneralElectric'sAppliance Park and the Ford Motor Company,two of the city's largest industrial employers.International Harvester,Seagrams, and Brown & Williamson, all major industrial employers, simply left the city. Even the city's legendarytobaccoand distillery industries,traditionally assumedto be "recessionproof," experiencedmajor downturns(Yater 1987). In the face of this deindustrializationand radical demographictransformations,Louisville's downtowndeteriorated;only onemajor office complex was completedbetween1953 and 1968.For almosttwo decadesin the 1960s and 1970s,developmentactivities in the centralbusinessdistrict (CBD) remainedat a virtual standstillandnumerousoffices, hotels,departmentstores, restaurants,and commercialestablishmentsclosed their doors. The Urban Land Institute reportedthat between1963 and 1982, the number of retail establishmentsin the CBD declinedfrom 811 to 387 (Yater 1987). The city participatedin variousurbanrenewalprojectsduring the 1960sand received numerousfederal grantsthrough the CommunityDevelopmentBlock Grant (CDBG) program, the Model Cities program, and relatedprogramsduring the Johnson,Nixon, and Carteryears.Local corporateand political leaders, however, did not systematicallyaddressLouisville's downtown revitalization until the early 1980s. Between1960 and 1980 St. Louis also plungeddeeplyinto crisis. Unlike its sister river city 250 miles to the east (Louisville) and its neighbor 220

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miles to the northeast(Indianapolis),St. Louis, along with Detroit, Philadelphia, and New Orleans,emergedas a postercity symbolizingthe worst aspects of the nation's urban crisis. The infamous freeze-framephotograph capturing the implosion of the Pruitt-Igoe public housing project in 1972 brandedSt. Louis as the prototypeof what was wrong with Americancities. St. Louis was often identified as a place where racial polarizationand economic declineconspiredto produceextremeforms of racial inequality, poverty, anddowntowndeterioration.Between1970and2000the St. Louis region grew by less than 150,000people, but between1950 and 2000 more than 500,000peopleabandonedthe city proper. During this sametime frame, businessand industry were significantly restructuredand the city's dominantposition in the region's economywas radically undermined(Cummings,Tomey, and Flack 2004). In 1951 more than 85 percentof the region'sjobs were locatedin the city of St. Louis, but by 1997 less than 30 percentof jobs were locatedthere. Between1970 and 1990 the city lost approximately82,061 manufacturingjobs while the surrounding countiesgainedmore than 44,000manufacturingjobs. The currentpolitical fragmentationin the St. Louis MetropolitanStatistical Area (MSA) reflectslong-standingdisparitiesof wealthandpoweracross the region. Jones(2000) reports no less than 92 separatepolitical jurisdictions in the St. Louis metropolitanregion. In St. Louis County alone, local governmentservicedelivery is divided amongmore than 150 political jurisdictions.According to Jones(2000) theseseparategovernmentsinsulatethe wealthy from the myriad of urban problems left behind in St. Louis city. Jonescontendsthat upper- and middle-incomewhites createpolitical and legal barriersbetweenthemselvesand the African American poor living in the city throughmaintenanceof strict building codesandrestrictiveland use policies within their separatesuburbanjurisdictions. University Involvement in Downtown Revitalization

Throughoutthe 1980sand 1990sall threecities attemptedto revitalize their sluggishurbancoresandrepositiontheir respectivedowntownsas vital componentsof their regional economies.While Indianapolis has clearly been more successfulthan Louisville or St. Louis, all of them enfranchisedmajor institutionsof higher educationin their redevelopmentstrategies.The cities followed similar pathsin responseto the challengeto redeveloptheir downtowns, but the variousinstitutionsplayedquite different roles, reflecting the particulardynamicsof local politics as well as their own respectivepolitical positions.Their chosenrolesalsoreflect the political landscapeswithin which university administratorsmust operateas they attemptto interfacewith the

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CUMMINGS, ROSENTRAUB, DOMAHIDY, AND COFFIN

developmentand leadershipcoalitions responsiblefor promoting and designing local redevelopmentstrategies. In Indianapolisand Louisville the major institutions of higher education are part of the public sector: IndianaUniversity-PurdueUniversity at Indianapolis (IUPUI) and the University of Louisville (U of L). Saint Louis University (SLU), the institution of higher educationmost extensivelyinvolved in redevelopmentefforts in St. Louis, is a private Catholic institution with a substantialendowmentand is driven by a Jesuit mission linked to social justice and community outreach.Despite significant variations in mission, political constituencies,andsourcesof funding, all threeinstitutionsarestrategically situatedin partsof their cities that havebeentargetedfor revitalization and occupyparcelsof real estatethat are vital to redevelopmentefforts. Additionally all threeinstitutionsadministermedicalschoolsthat makecritically importantcontributionsto their local andregionaleconomies.The very different roles played by eachinstitution take on addedpolicy significance in light of the similar developmentchallengesfaced by their cities and the redevelopmentstrategiesadoptedand implemented. The experiencesof thesethree universitiesrepresentimportant casesin which large areasof urbanreal estatewere clearedand redevelopedthrough variouspublic-privatepartnershipsin which the universitieswere critical intermediaries.In addition to the large amountsof land acquiredand redeveloped by the institutions, the caseshave other important policy elementsin common.All three institutions were part of, and continue to be important players in, larger urban developmentagendasin which arts, entertainment, tourism, and sportsfacilities are centralto their cities' redevelopmentstrategies (Turner and Rosentraub2002). While all three institutions found it advisable to createinnovativedevelopmentalarrangementsand public-private partnershipswith private investors,federalagencies,and municipalandstate government,two of them (SLU and U of L) were more independentin designingandimplementingtheir developmentalagendas.Nonethelessall three casesplaceduniversity administratorsin a position of being major political playersin the urbanregimesandcoalitionspromotingredevelopment.There areboth political andfinancial risks that mustbe strategicallymanagedwhen universitiesbecomeplayersin larger redevelopmentagendas. In someprojectsuniversity interestsand objectivesare not always compatible with thosebeingpursuedby otherdevelopmentpartnersandpolitical constituencies.In the case of private institutions, these conflicts may not always entail extensivepolitical costs.For public institutions,however,conflict with other developmentpartnersmay generateloss of political capital and erosionof legislative support, and may compromisetheir relationships with corporatedonors.All threecasesentailedvarying degreesof community

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controversydue to the numberof residentsor businessesdisplacedby university land acquisitionand the associatedchangesin the racial and social class compositionof former land users.In all threecasesthe managementof these issuesraisedsignificant challengesfor university administratorsand officials. The political costsof communitycontroversy,however,may not be as significant as the costsassociatedwith the political mismanagement of a development agenda.When universitiesenter the developmentarena,they are often askedto compromisean educationalmissionin favor of benefitsincurredlargely by private-sectorinterests.University administratorsare often askedto reconcile decisionsthat appearincompatiblewith their educationalconstituencies and the philosophicalmissionof the institution, as well as the needsof community groupsand the economicinterestsof private investors.How universities managethesecompetingpolitical pressures,obligations,andconstituencies are importantbut largely unexploredareasof inquiry. Rebuilding Downtown Indianapolis: Higher Education as Part of a ComprehensiveRedevelopmentPlan Indianapolisestablisheda new form of governmentin 1969 to overseethe economicdevelopmentprogram that led to the rebuilding of its downtown core(Rosentraub1997).Theconsolidatedcity andcountygovernment,UniGov, administereda planfor redevelopmentanchoredby IndianaUniversity-Purdue University at Indianapolis,which becamethe westernboundaryfor the redevelopmenteffort and soughtto establishitself as a first-rate public institution to complementthe private institutions of higher educationalreadylocatedin the city. The developmentof IUPUI and the associatedIndianaUniversity Medical Schoolandhospitalinfrastructureinvolved the acquisitionof many acres of land to permit expansion,demolishinga neighborhoodthat was the historical centerof the black community of Indianapolis.The land acquisition and redevelopmentcompletelychangedthe classand racial compositionsof land useandwasaccomplishedwith considerablecontroversy.Map 9.1 shows the land occupiedby IUPUI and its location relative to downtown Indianapolis and other key facilities. The use of this land for the westernanchorof the developmentprogram placed highereducation,the university, and the Stateof Indianaas full partners in a programthat included sports,entertainment,and the establishment of an arts centerand a premier conventionfacility. In later years a new and successfulmall, upscaleresidentialunits, anda full setof retail andrestaurant facilities were addedto the downtownresurgence(the Circle Center).By the 1990s downtown Indianapolis was hailed as a "miracle" and the perfect

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152

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exampleof a rebuilt downtown areathat was the envy and model for cities throughoutthe Midwest and the nation (Rosentraub1997). The scale,scope,and successof the redevelopmentprogramsis detailed in Table9.1, which identifiesthe projectsundertakenacrossmorethantwenty years to transform downtown Indianapolis.Largely reflecting a sports and entertainmentstrategy,the magnitudeof the redevelopmentplan reflected the mobilization of state government,the new UniGov structure, and the widespreadparticipationof local corporationsand private foundations.Additionally the university was a fully enfranchisedpartnerin a powerful developmentcoalition. In fact the university was the primary intermediaryin whosenamemuch of the land was acquiredand redeveloped. In the physicalplan for a new downtown,two buildings framedthe initial reconstructionefforts as the easterncomponent:a new city-county building to housethe consolidatedgovernmentandMarketSquareArenaasthe 16,950seathomefor the IndianaPacersbasketballteam.While it is quite likely that the city-county building would have been developedeven without the creation of a new governingstructure,the placementof Market SquareArenain downtown Indianapolis was a direct result of UniGov and the downtown developmentplan (Rosentraub1997). In the absenceof UniGov, the facility probably would havebeenbuilt in a more suburbanlocation, as that was the conventionalpatternfor arenaconstructionin the 1970s(Rosentraub1997). From 1974through1999morethanfifty major developmentprojectswere initiatedfor the downtownarea.The Stateof Indianadevelopedits new GovernmentCenterat a cost of $264 million, and Indiana University's investment in its Indianapoliscampustotaled more than $230 million during this period. Sevenof the projectswere completelyrelatedto the sportsidentity that Indianapolishopedto establish.In 1984Indianapolisopenedthe 61,000seatHoosierDome (RCA purchasedthe namingrights in 1994), which becamethe homefor the IndianapolisColts football team.The Domehashosted the National CollegiateAthletic Association(NCAA) Men's BasketballFinal Four threetimes; Market SquareArenawas the one-timesite of the tournamentbeforethe Domeopened.Othernew sportsfacilities includeda tennis stadiumfor the annualprofessionalhard-courtchampionships,the Indiana University Natatorium,the IndianaUniversity Track and Field Stadium,the Velodrome(bicycle racing), andthe NationalInstitutefor Fitnessand Sports. By 1989 a total of sevennational organizations(Athletics Congressof the USA, U.S. Canoeand Kayak Team,U.S. Diving, Inc., U.S. GymnasticsFederation, U.S. Rowing, U.S. SynchronizedSwimming, and U.S. Water Polo) and two internationalorganizations(InternationalBaseballAssociationand InternationalHockey League)had moved their governing offices to Indianapolis. In 1999 the NCAA movedits headquartersto the city.

Year 1974 1976 1977 1979 1980 1982 1982 1982 1982 1982 1982 1984 1985 1985 1985 1985 1986 1986 1986 1987 1987 1988

Development projects

Market Square Arena Children's Museum Hyatt Hotel/Bank Sports Center Indiana Theater Capitol Tunnel IU Track and Field Stadium IU Natatorium Velodrome 2 W. Washington Offices 1 N. Capitol Offices Hoosier Dome Lower Canal Apartments Heliport Walker Building Embassy Suite Hotel Lockerbie Market Union Station City Market Pan Am Plaza Lockfield Apartments Canal Overlook Apartments 0 0 0 0 1.5 1.4 0 1.5 0.5 1.2 3.2 0 7.9 2.5 2 6.45 1.8 16.3 0 0 0 0

Federal 0 0 0 0 0 0 1.9 7 0 0 0 0 0 0.1 0 0 0 0 0 0 0 0

State

Private 0 0 55 1.5 4.5 0 0 0 0 11.8 10.4 0 0 2.4 0 25 14 36 0 25 24.6 11

City 16 0 0 4 0 0 0 0 1.1 0 0 48 10.3 0.6 0 0 0 1 0 5.7 0.6 0

Source of funds

Sources of Funds for Selected Downtown Indianapolis Economic Development Projects

Table 9.1

0 25 0 1.5 0 0 4 13 1.1 0 0 30 2 0 1.4 0 0 0 4.7 4.5 0 0

Philanthropic

16 25 55 7 6 1.4 5.9 21.5 2.7 13 13.6 78 20.2 5.6 3.4 31.5 15.8 53.3 4.7 35.2 25.2 11

Total investment (millions)

154

Percentage

Zoo National Institute of Sports Eiteljorg Museum Westin Hotel Indiana University Farm Bureau State Office Center Lilly Corporate Expansion Circle Centre Mall Other Projects Property Tax Abatements Victory Field Conseco Fieldhouse USA Funds NCAA Headquarters Total

1999

1988 1988 1989 1989 1975-90 1992 1992 1992 1995 1974-98 1974-98 1997 1999

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100

37.5 9 60 65.5 231 36 264 242 300 1,066.90 98 23 178 16.6 75 3,153.50

155

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CUMMINGS, ROSENTRAUB, DOMAHIDY, AND COFFIN

Severalimportantpoints emergefrom a review of Table 9.1.1 First, more than $3 billion worth of capital developmentwas investedin downtown Indianapolis,representinga substantialcommitmentof funds targetedto a specific area and in support of a comprehensivelydesignedpolicy program. Second,therewas an extensivecommitmentof private funds to the strategy. Indeed, more than half of the funds invested, 53.6percent, were from the private sector.Third, the nonprofit sectorwas anotheractive participantresponsiblefor almost one dollar of every ten invested.Taken together,then, the private and nonprofit sectorswere responsiblefor approximatelytwothirds of the funds investedin redevelopment.Fourth,the City of Indianapolis's investmentamountedto lessthan one-fifth of the total investment. Finally, the investmentsby the Stateof Indiana and Indiana University2 were virtually equalto the expendituremadeby the City of Indianapolis.As a result the city was quite successfulin leveragingfunds for its redevelopment strategy.Basically a $3.2 billion rebuilding programfor the downtown areawas securedwith only about$550million from the city. For every dollar investedby the city it was able to leverageapproximately$5.82.The Indianapolis downtown areathat peoplevisit today is far different and a vast improvementfrom the one describedin unflattering terms by critics in earlier decades(Hudnut and Rosentraub1995). Severalobservationsabout IUPUI's role in the redevelopmentof downtown Indianapolisare importanthere.First, the land acquisitionpolicies and programsthat permittedIUPUI to fulfill its role in this redevelopmenteffort were strongly supportedby local corporationsandbusinessleaders,the Lilly Foundation,and stategovernment.With thesepowerful actorsunited behind a comprehensiveredevelopmentplan, the university probablybypassedsignificant legal, racial, and political controversyas well as the associatedfinancial costs related to its land acquisition and clearanceactivities. Additionally the new UniGov governmental structure was integral to the developmenteffort. Becausemuch of the land clearanceand acquisition was undertakenin the nameof higher educationexpansion,political controversy over competinginterpretationsofthe public-interestcomponentwasundoubtedly reduced.While a historic section of the city's black community was destroyedandits residentsdisplaced,the developmentof a new institution of higher educationand an expandedmedicalresearchand hospital infrastructure was promoted as compatible with the public good. In this sensethe university playeda pivotal ideologicalrole in justifying the land acquisition and clearanceaspectof the city's redevelopmentplan. Second,theseactionsestablishedthe IUPUI campusas oneof the principal economicdevelopmentenginesfor downtownIndianapolisand the entire region. A recent report estimatesthat the researchactivities of the Indiana

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University School of Medicine have an annual economic impact of $242,811,227on the state (Przybylski 1998). The report contendsthat this economicimpact is producedby the $94,766,483in externalresearchfunds broughtinto the stateor retainedby the medical school.In terms of economic multipliers, Przybylski(1998, 1) contendsthat "for every$1 of researchfunding attractedto Indiana,medical schoolemployees,suppliers,and their employees generatean additional$1.56 of salesfor businessesthroughoutthe state." Third, and unlike the universitiesin Louisville and St. Louis, IUPUI was not a direct competitorwith the professionalsportsand entertainmentfranchisesin the city. The developmentof the campuscomplementedthe city's overall developmentplan, and the sportsfacilities on the campus(track and field, natatorium,and tennis) were designedto both accommodateexternal tourists marketsand cater to college and other amateursports enthusiasts. Thesestrategiesensuredthat the interestsof the university did not conflict with thosebeingpursuedby otherdevelopersandinvestors,compromisethe political interestsof stateandlocal government,or underminetheir relationships with the corporateand businesscommunity.As a result university administratorshavebeenable to expandtheir educationalmissionandinterests by fully cooperatingwith downtown developmentinterests. Rebuilding Downtown Louisville: Higher Education as an IndependentActor in a Fragmented DevelopmentPlan

Like Indianapolisand many other cities seekingto securea postindustrial future, Louisville's corporateand political leadershavebeendrawn to redevelopment strategiesbasedupon sports, arts, tourism, and entertainment. Unlike Indianapolis'spolitical regime,however,a fragmentedbusinessand civic leadershipstructurein Louisville hashad difficulty creatinga comprehensivedowntownredevelopmentplan and mobilizing the political support requiredto implementit (Boyd 1999).While consensusexistsaboutthe need to reversethe downtown'sfortunes and reinventthe CBD as an arts and entertainmentcenter,the identification of a strategicpath of action hasbeena slow and contentiousprocess. Louisville has redevelopedits downtown in a fragmentedand uncoordinatedmannerand without the full participationof the University of Louisville. In fact the university has often pursuedits own interestsin a manner that is not always compatiblewith thosepolitical and financial actors promoting the resurgenceof the downtown.Unlike most urbanuniversities,the U of L occupiesa uniqueposition as a major sportsvenuefor the Louisville metropolitanregion. Map 9.2 shows the major developmentprojects sponsoredby U of L in relation to the CBD.

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CUMMINGS, ROSENTRAUB, DOMAHIDY, AND COFFIN

Map 9.2

Louisville

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Source:Preparedby CarrieBundy, NormanStuppGIS Lab, Saint LouisUniversity.

The University of Louisville has two campuseswithin the central city. The main campus,Belknap, is situatedon the southernedgeof two major historic districts: Old Louisville and Limerick. The northern edgeof these historic districts graduallyblendsinto the downtown,which is locatedon the banks of the Ohio River. The main campusis boundedon its easternand westernedgesby a declining and largely abandonedindustrial and warehousedistrict, and a major interstatehighway (1-65) bordersits easternedge.

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The Health ServicesCampus(HSC), with its medical and dental schools and nursing and allied healthprograms,is situatedaboutthreemiles to the north within the city center and businessdistrict. The HSC is part of Louisville's hospital district, an areathat is vital to the region'seconomy. Both campuseshave expandedsignificantly in recent years and present two different and at times contradictory pictures of the university's real estateoperations.Driven largely by its own calculationof self-interest,the university has played both a supportiveand independentrole in response to downtown developmentstrategies. Sincethe mid-1970sredevelopmentof Louisville's downtown hasbeen characterizedby a seriesof benchmarkdevelopmentprojects,mostof which reflect pursuit of a sports,arts, entertainment,and tourism theme.In 1979 private entrepreneursin partnershipwith city officials initiated the Broadway Renaissance Project,which targetedredevelopmentof an historic hotel, three historic theaters,more than 1,000 new residential units, and 400,000squarefeet of commercialand office space(Cummings,Koebel, and Whitt 1989). The redevelopmentareacoveredmore than three square blocks of the downtown, encompassedapproximatelythirty-five acresof real estate,andentailedmorethan $154million of privateandpublic funds. The university was askedto assistin the effort by expandingits downtown operationsand assumingtenancy in one of the newly renovatedoffice spaces,but declinedto do so. Inspiredby the festival marketconceptpioneeredby the RouseCompany, the city and private investorsattemptedto revitalize the downtown'ssluggish retail sectorby architecturallycombiningseveraladjoining buildings in an area close to the Broadway RenaissanceProject. Openedin 1983, the Louisville Galleria has struggledunsuccessfullyto retain a seriesof highprofile tenants,including Dillards, Laura Ashley, The Limited, Victoria's Secret,and the FashionShop.In 1998 Mayor David Armstrongdeclaredthe Galleria was "moments away from being empty." In 2002 an effort was launchedto reinvent the retail complex as an urban entertainmentcenter. With the addition ofthe Hard Rock Cafe andBorder'sBooks andMusic, the mayorexpressedhopethat the newly named"Fourth StreetLive" and a $70million-dollar renovationplan would transformthe Galleria into "a 24-hour entertainmentand shoppingvenuelike none other in America." The university hasneverparticipatedactively in efforts to stabilizeor assistthe Galleria effort or its more recentreinventions. Largely with the supportof private investorsand stategovernment,a new Kentucky Centerfor the Arts (KCA) was constructedin the early 1980sat a cost of approximately$28 million. Openedin November 1983, the KCA servesasthe principal facility for the Louisville Orchestraandthe Louisville

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CUMMINGS, ROSENTRAUB, DOMAHIDY, AND COFFIN

Ballet, as well as the host for the nationalBroadwaySeriesand other concert and entertainmentevents.The facility is located in the heart of the historic downtownjust a few blocks from other important arts and entertainmentfacilities including Actors' Theater, theLouisville ScienceMuseum, and the Louisville Slugger Museum. This latter facility was an outgrowth of the successfuleffort by private developersand city officials to bring the Hillerich & BradsbyCompany(makerof the legendaryLouisville Sluggerbaseballbat and other sportsequipment)back to its historic location in downtown Louisville. Again the university was not directly or extensivelyinvolved in efforts to renovatehistoric Main Street,nor did it show any interestin becominga major playerin the arts, sports,and entertainmentstrategiesrelatedto theseinitiatives. Other significant developmentprojectsreflect Louisville's arts and entertainmentstrategy to revitalize the downtown. For examplethe Louisville WaterfrontDevelopmentCorporationwas createdin 1986 to oversee developmentefforts along the Ohio River, including the design,construction, and maintenanceof Waterfront Park, an area of about 100 acres of largely contaminatedland locatedbetweenthe downtown and the river. In 1999 a major $72 million renovationof the city's conventioncenteradded approximately449,000squarefeet to existingspace.In May 2000 the Louisville SluggerField was completedat a costof approximately$28 million. Modeled after CamdenYards in Baltimore, the Triple A baseballstadium seats13,000and is locatedon a former brownfield and warehousefacility near the river. Efforts are also under way to constructa MuhammadAli Museumand significantly expandnew residential,condominium,and office facilities close to the redevelopedwaterfront. The continuedabsenceof university involvementin theserecentsportsand entertainment-drivenprojects is significant for severalreasons.University participationin downtowndevelopmentefforts appearsto takeplace only whenits immediateeconomicinterestsareclearly affected.Since1980 the university hasinvestedapproximately$343 million in real estatedevelopment.More than $198 million has beenspenton the Belknap Campus, with $77 million of that amountinvestedin sportsfacilities. NCAA athletics are integral to the university'sidentity as vital componentsof its financial and political portfolios, and sports-centered facilities highlight much of the real estatedevelopmentinitiated by the university. CardinalPark,for example,is a recentlycompletedcomplexof sportsfields, including major new facilities for women'ssportsand the Miller-Rudd TennisCenter,with indoor courtsthat are availablefor an hourly fee to both the university and the GreaterLouisville community. On the Health ServicesCampusthe university has spentapproximately

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$145 million, the bulk of which has been invested in expandingmedical researchfacilities in the downtown (seeTable 9.2). Louisville's large medical complex,of which HSC comprisesa considerableportion, servesas one of the city's major employers.Between1996 and 2000 the total amountof external university researchgrants and contractsrose from $41 million to $60 million, mostly from medical school researchactivities. The HSC expansion,with new researchfacilities, offices, and dormitoriesfor the health sciencesstudents,hastakenplacewithin the contextof the medicalservices sector, which was targetedas a major part of the city's overall downtown economicdevelopmentplan. Thesereal estateactivities have removedsignificant blocks of blight closeto the CBD and, with the recentlyconstructed andproposedbiomedicalresearchbuildings,serveto advancethe city's strategy in targeting the high-technologysector. It is understandablewhy the university has been extensivelyand visibly involved in this componentof downtown redevelopment,although its absencefrom other initiatives has generatedpolitical costs. While both campusexpansionsserveprivate propertydevelopmentinterestsby generatingnew valuesand occupyinglandsthat might otherwiseremain underutilized,vacant,or contaminated,someuniversityinitiatives have beencriticized as being too project-specificwith little or no collaborationor sustained economic developmentplanning on behalf of the city and region as a whole. Most pertinentto the recent history of the university's lack of involvement in downtownredevelopment,and its independentpursuit of a separate agenda,is its reluctanceto fully embracethe professionalsportsand entertainmentstrategyaggressivelybeingpursuedby businessandpolitical leaders in the city. Fully persuadedby rhetoric that a major-leaguecity requires a major-leagueteam(Rosentraub1997),the political andcorporateleadership in the city has unsuccessfullycourtedseveralprofessionalbasketball franchises(VancouverGrizzlies, HoustonRockets,and CharlotteHornets) over the pastfive years.Recentpolicy debateover how to attracta basketball franchiseopenedseriousrifts among business,political, and university leadershipin the city. While efforts have been made to camouflage theserifts, they have frequently eruptedinto heatedexchangein the local pressand television. BecauseLouisville is a small metropolitanmarket,it has had greatdifficulty attractinga professionalfranchise. Buoyedby its successfuleffort to bring back the Louisville Sluggermanufacturingoperationfrom rural Indiana to downtown Louisville, the construction of Slugger Field, the groundbreakingfor the MuhammadAli Museum,and the transformationof the waterfront,privateinvestorsand public officials believethat a downtown

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CUMMINGS, ROSENTRAUB, DOMAHIDY, AND COFFIN

Table 9.2

University of Louisville Development Projects: Belknap Campus and Health Sciences Campus Total investment (millions)

Development projects

Year

Belknap Campus New music school Playhouse renovation Chemistry building Education building Ekstrom Library Information Center-South New business school Information Center-North New engineering building Kersey Library addition Residential dormitory Student Activities Center Faculty and Alumni Club Honors Building renovation Theatre arts building Belknap parking garage Ford renovation Miller renovation Stevenson Hall renovation New classroom building University Tower renovation Life Science Lab renovation New EHS storage facility Papa John's Cardinal Football Stadium* Soccer field' Bass Rudd Tennis Complex' Cardinal Sports Park A' Cardinal Sports Park B' Total Belknap campus investments

1980 1980 1981 1981 1981 1984 1985 1986 1987 1990 1990 1990 1990 1992 1993 1994 1994 1994 1994 1995 1995 1996 1998 1998 1994 1994 2001 2001

9.75 1.46 7.75 5.40 12.00 0.13 8.11 0.24 3.23 1.42 6.00 23.81 3.62 0.25 1.10 8.30 0.87 3.74 0.68 15.00 2.35 0.91 1.22 63.20 0.20 3.65 10.90 2.80 198.06

1980 1981 1990 1991 1991 1992 1994 1994 1994 1995 1995 1996 1996 1997

36.69 11.60 3.20 3.17 0.96 0.85 6.27 1.41 1.97 4.03 0.92 0.78 4.83 4.92

Health Sciences Campus New consecrated care building New ambulatory care building Research resource center Abell Administration renovation Building demoliltion Kidney Dialysis Building renovation Health Science Center Parking Garage Kidney Dialysis Building renovation Medical/Dental Apartment renovation K Building renovation MDR Laboratory renovation High rise sprinklers K Building renovation Lion's Eye building addition

DOWNTOWN REVITALIZATION: POLmCAL AND FINANCIAL RISKS Dental School simulation lab Baxter Biometical Research Building New research building Total health sciences investments Total University Investments

1998 2000 2002

163

1.37 21.00 41.00 144.97 343.03

Source:B. Traughber,fonner director of ULH, Inc., University of Louisville. Note: *Denotessports-relateddevelopmentprojects.

basketballarenais requiredto bring a professionalfranchiseto the city. Despitethe presenceof the Triple A Louisville Bats baseballteamin the downtown and visionsof a professionalbasketballteamin a new downtownarena, the U of L Cardinalsbaseballteamis for all practicalpurposesthe primary professionalsportsfranchisein the city. Furthermore,university officials are not enthusedaboutlosing their franchiseand monopoly control over the local marketto an outsideprofessionalcompetitor.Clearly the sportsinterests of the university are not necessarilycompatiblewith thoseinterestsdriving downtown redevelopment. During the early 1990sthe university, with corporateand political backing, initiated activities to move its football enterpriseto a parity position with its nationally prominentbasketballprogram.After successfullyrecruiting Howard Schnellenberger to headthe expansionof its football program, in the 1990s,the uniand following a seriesof postseasonbowl successes versity initiated efforts to build a first-class football stadium on campus. The stadium,with seatingfor 42,000,was completedin 1998 at a cost of $63 million andentailedredevelopmentof a brownfield site locatedsouthof the BelknapCampus.As a result the city now hastwo major sportsfacilities anchoringthe real estateapproximatelythree miles south of the downtown but situatedon or very close to the U of L campus:PapaJohn'sCardinal Stadium(U of L football stadium)and Churchill Downsracetrack,the home of the Kentucky Derby. Comparedto the more recentdebateover efforts to securea professionalbasketballfranchise,the PapaJohn'sproject was carried out with a high degreeof consensusamonguniversity officials, corporate leaders,and stateand local politicians. Throughoutthe 1980sthe U of L basketballprogrambroughtsignificant recognitionto a city that usually stoodin the nationalspotlightfor only two minutes each year during the running of the Kentucky Derby. Basketball gamesat FreedomHall (a facility locatedat the Kentucky Fair and Exposition Center)were always at peakseatingcapacity,however,and the decline of Louisville's dominancein collegebasketballin the 1990scoincidedwith increasedinterestin courting a professionalbasketballfranchise.Convinced that the city could never attract a professionalteam without a new arena,

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local officials, corporateleaders,and private investorsplacedconsiderable pressureon the university to get in line behindefforts to build a new downtown facility. Some localboostersprivately reasonedthat becausethe university receivedmajor supportfor its new football stadium,they could expect university supportfor the downtown arena. Over the pasttwo years,tough and very public negotiationsensuedover the university'scurrent contractto play basketballin FreedomHall, a campus or downtownlocation for a new arena,and the financial termsof a longterm contract that would place U of L basketballin the new arena.The university'snew andhigh-profile basketballcoach,Rick Pitino, initially made it clear that he did not supportpursuit of a professionalfranchise,but in the faceof political criticism he laterchangedhis position(Timmermann2001a). University PresidentJohn Shumakerpublicly supportedthe new arenabut preferredit be located oncampus.He eventuallywithdrew supportfor the campusarenabut demandeda lucrativecontractualarrangementbeforeagreeing to housethe basketballprogramin a downtownfacility. Thesepolicy controversiescame to a headin 2001 during negotiations with the Charlotte Hornets, before the franchise eventually selectedNew OrleansoverbothLouisville andSt. Louis. Severallocal officials commented in the pressand complainedprivately that the university'sunreasonableposition on the arenahad costLouisville a professionalfranchiseand its presidenthad squandered the region'sopportunityto becomea major-leaguecity. Somepublic officials interviewedduring the courseof this study commentedthat the university negotiatedtoo hard on the downtown arena,a fact that one official thoughtcausedthe Hornets'ownershipto selectNew Orleansover Louisville. A financial consultantfor the Board of Alderman, an individual directly involved in the negotiations,commentedduring an interview for this study that "the arenadeal did not have a chanceif the university was not on board; the university had too much power during the negotiations."There appearsto be a fair amountof lingering ill will over the collapseof the downtown arenadeal. In fact the new downtown developmentplan for the Louisville region suggeststhat the University of Louisville should try to play ball differently the next time a professional franchiseis courted: It is critical that the recently demonstratedsupport for a facility down-

town-atthe right time andcost-bemaintainedandthat the city, the university, andthe businesscommunitybeginplansto developan acceptable constructionand financing plan for a downtown facility on the proposed site (City of Louisville, Downtown DevelopmentCorporation,Louisville CentralArea, Inc. 2002,76).

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RebuildingDowntown St. Louis: Higher Education as a Leaderin a TargetedRedevelopmentPlan In anotherriver city four hoursto the west, a private, Catholic university also has struggledto balanceself-interestwith a sportsand entertainmentdowntown developmentagenda.In a region characterizedby racial polarization andinequality, disinvestmentand decline,andextremeforms of governmental fragmentation,SaintLouis University occupiesa uniquepositionof independentpowerandinfluencein local politics. The universityis locatedin the heart of Midtown St. Louis, an area linking Forest Park (site of the 1904 World's Fair) with the downtown.This sectionof St. Louis is part of what is called the Central Corridor and has been the focus of long-term efforts to revitalize the downtown. Economicdevelopmentstrategistsin the city reasonthat the CentralCorridor, the "spineof the city," hasto be securedfirst in order to revitalize the larger and more deterioratedurban areasto the north, which is predominatelyAfrican American,andsouth,which is predominately white. The CentralCorridoris a largegeographicarearunningfrom the Arch on the banksof Mississippi River through the traditional downtown to the easternedgeof ForestPark (seeMap 9.3). The CentralWest End part of the corridor is one of the most fashionable historic residentialdistricts in the city, with severalhistoric hotelsand a revitalizedcafe andrestaurantdistrict. This areahasbeensignificantly gentrified over the pasttwo decadesand now housesnumerousmembersof the city's businessandcivic elite. Anothermajor privateeducationalinstitution, Washington University (WashU), is locatedin the suburbof Clayton and is adjacent to University City, two upscaleresidential communitieslocatedjust outsidethe city limits but closeto ForestParkandthe CentralCorridor. Clayton is a chic edge city developmentseveralmiles from the center city and is viewed as a major threat to downtown revitalization plans. Washington University'smedicalcampusanchorsthe westernedgeof the CentralCorridor and is located in the heart of Central West End's commercialdistrict. Becauseof their strategiclocations,WashU and especiallySLU were destined to play major roles in the revitalizationof this part of the city. Both universitiesare significant enginesof developmentand redevelopment for the regional economy.Although WashU is often criticized for its lack of involvementin local affairs, its researchactivities make significant contributionsto the area.In fiscal year 1999 WashUrankedeighth amongall private universitiesreceiving federal supportfor researchand development. In fiscal year 2000 the university receivedmore than $364 million in researchsupport from federal and state governments,corporations,foundations, andindividuals.During fiscal year2001WashUreceivedapproximately

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Map 9.3

St. Louis Central Corridor

St. Louis Central Corridor

externalexternal

externalexternal

universities universities external universities universities external external external external external

external

universitiesuniversities universities

external external external

external external

external

universities external

total

external external external external

external

external external external external

universities universities universities

external external

universities external

external external

total

universities universities external universities universities external external

external external

external

universities

external external external external

external

Source:Preparedby CarrieBundy,NonnanStuppGIS Lab, SaintLouis University.

$411 million in total researchsupportfrom externalsources,andSLU generatedapproximately$37.8 million in researchrevenues.The medicalschools of both universities generatethe bulk of the external researchfunds, and both also have substantialendowments.Combinedwith their real estateactivities, the researchdollars receivedby the two universitiesproducesignificant multipliers in the local economy. The presenceof SLU andWashU'smedicalcomplexin the CentralCorridor has stabilizeddemographicchangein the area,strengthenedthe vitality of the retail and servicesectorsituatedthere,increasedthe volumeof private investment,and elevatedthe value of residentialand commercialreal estate. To a large extentthe real estateand developmentactivities initiated by these private universitiesare the result of independentactions madepossibleby public-sectorresourcesfor financial and polititheir lack of dependence on cal support. The direct real estateactivities of SLU, however,havebeenthe most important to the revitalization of the Central Corridor. In the late 1960sSLU was drawninto redevelopmentactivities as the beneficiaryof a controversial urbanrenewalproject.As a resultthe universitybecameextensivelyinvolved

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in a variety of public-privatepartnershipsdesignedto addressthe seriously deterioratedcommunityin which it was located.Facedwith the momentous decisionto relocateto suburbanSt. Louis or to revitalizeits immediateenvironment,SLU administratorschosethe latter option, althoughlocal political activists did not always appreciatetheir real estateinitiatives. One of the most monumentaldevelopmentprojectsin the history of St. Louis occurreddirectly acrossGrandAvenueon SLU's easternborder.The Mill CreekValley renovationwas one of the largesturban renewalprojects ever sponsoredby the federalgovernmentand possiblyone of the mostcontentious.The areaconsistedof 465 acresand was frequently referredto as the city's worst eyesore.Political leadershipin the city supporteddemolition and clearanceof the area becauseit was the first impressionof St. Louis obtainedby visitors arriving at Union Station, a major St. Louis landmark. The valley was also hometo approximately19,700residents,95 percentof whom were African American, and it contained839 businessesand institutions, including churches,theaters,communitycenters,grocerystores,anda baseballpark for the St. Louis Stars, the city's historic African American baseballteam (Fagerstrom2000). The urban renewal plan for redevelopmentof this areacalled for a mix betweenresidential,industry, and businessuses and the expansionof the SLU campus.The original plan set aside 165 acresfor industrial development; 22 acresfor SLU; 20 acresfor commercialdevelopment;75 acresfor residences(1,700units); and 165 acresfor expresswaysandroads(Fagerstrom 2000). The plan provideda convenientopportunityfor the university to expand andSLU ultimately submitteda bid for the twenty-two acresof land. Three local taxpayersassociatedwith the Protestantsand OtherAmericans United for Separationof Churchand Statecontestedtheir bid. The salewas upheld by the circuit court and SLU acquiredthe twenty-two acresfor the price of $535,742. Participationin the Mill CreekValley Project,despitethe intensity of the controversysurroundingit, was a precursorto the university'Sincreasedinvolvementin real estateacquisition and developmentactivities throughout Midtown. Indeedmany thoughtthe future of SLU itself was directly tied to the long-term successof its redevelopmentactivities. The intensepolitical controversyand racial conflict accompanyingthe Mill CreekValley project, however,eventuallytempereduniversity enthusiasmfor direct involvement in land acquisition and expansion(Reinert and Shore 1996). Former SLU PresidentFatherPaulReinertworkedwith local businesses andpolitical leaders to form a nonprofit developmentcorporation,New TowniSt. Louis, Inc., partly as a way of deflectingpolitical controversyaway from the university while it aggressivelypursuedthe stabilizationof Midtown.

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In January1973 the PlanningCommissionof the City of St. Louis recommendedapprovalof a plan for redevelopmentin a 1AOO-acreareaidentified as the New Town/St.Louis initiative. Partial supportcamefrom the federal governmentthrough the Urban Growth and New Community Development Act of 1970(Canfield 1973).The goal of New TowniSt. Louis was to revitalize Midtown by improving the quality of life for its residents,businesses, and institutions by assuringthe safety and the appearanceof the area.The group facilitated strategicpublic-privatepartnerships,assistedin the preservation and renovationof existing buildings, andstimulatedinterestand investmentin the area(Reinertand Shore1996).The formation of New Townl St. Louis led to the creation of three separate,independentredevelopment organizations:LafayetteTown Redevelopment Corporation,Midtown Medical Center RedevelopmentCorporation, and City Center Redevelopment Corporation(New TowniSt. Louis, n.d). SLU playedvital financial andleadership roles in all three organizations. The City CenterRedevelopmentCorporation(CCRC) was establishedin 1980and is currentlyknown as GrandCenter,Inc. The original shareholders were SLU, the Urban Leagueof Metropolitan St. Louis, Saint Louis SymphonySociety,Third BaptistChurch,ScottishRite Masons,MercantileBank, and CenterreBank (Reinertand Shore1996).The.focus of this development coalition was to utilize the existing buildings to recreatean arts and entertainmentdistrict for St. Louis. The university ultimately embracedthis strategy, publicly proclaimed its presencein the heart of the city's "urban renaissance,"and widely promotedits commitmentto rebuild the Grand Centerarts and entertainmentdistrict. The Midtown Medical CenterRedevelopmentCorporationfocused its activities on the area immediately surrounding SLU's medical campus,and the LafayetteTown Redevelopment Corporationfocused on residentialrevitalization immediately south of the medical campus(New TowniSt. Louis, n.d). The activities initiated by New TowniSt. Louis contributedto a seriesof major developmentprojectsin the Midtown sectionof the CentralCorridor and led to additional land clearanceand real estateacquisitionsby the university. Table 9.3 summarizesthe more significant developmentprojectslocatedin the original areatargetedby the New TowniSt. Louis initiative and thosein the expandedareathat includesthe easternedgeof ForestPark and the westernedgeof downtownSt. Louis. The projectsin the tablerepresenta variety of investors and do not necessarilyhave their origins in the New TowniSt. Louis initiative, althoughmosthavebeeninfluencedin somemanner by SLU's leadershipor financial support.Between1980 and 2002 approximately $1.76 billion was investedin the Midtown area,and more than 47 percentwas investedby SLU ($300 million) and WashU ($529 million).

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Table 9.3

Investments in the Central Corridor of St. Louis by Saint Louis University, Washington University, and Other Investors

Development projects Saint Louis University campus expansion WashU Medical School and Barnes Jewish Hospital: BJC Cancer and Outpatient BJC South Campus St. Louis Children'S Hospital McDonnell Research Building Harris-Stowe State College campus expansion Other Investments: Public, nonprofit, and private A.G. Edwards Adams School Argyle Garage and Library Blumeyer Housing Cardinal Ritter High School Center for Emerging Technologies Central Institute for the Deaf Chase Park Plaza Childgarden Child Care Center Chouteau and Compton (future manufacturing site) Continental Building Coronado Hotel Federal Bureau of Investigation Building Forest Park Hotel Forum for Contemporary Arts KETCI Channel 9 Lofts at Lafayette Square Maison Lofts McCormack House (part of Westminster Place) Mississippi Lofts Newstead Condos Otis Elevator Building Phyllis Wheatley YWCA Pulitzer Foundation Sheldon Theater Annex Sigma Aldrich Corporation SJI Building SSM Cardinal Glennon Children's Hospital St. Vincent Park Welsh, Flatness, and Lutz Building Westminster Place Wireworks Loft Fox Theater Total investments

ongoing

Total investment (millions) 300.0

2001 ongoing 2000 2002 ongoing

320.0 90.0 30.0 89.0 37.0

2002 2001 2001 ongoing 2002 2001 2001 1999 2001

180.0 14.0 12.0 166.0 25.5 14.9 11.6 100.0 1.9 17.0 25.0 27.0 7.5 20.0 7.6 13.0 15.7 5.5 9.1 10.0 4.5 2.1 7.2 30.0 5.0 55.0 9.2 56.7 20.0 6.5 7.0 14.5 2.0 1,769.0

Year

2002 ongoing 1999 2002 2003 1998 ongoing 2002 2000 2001 2000 2001 2003 2001 1998 2002 2000 2003 2004 2001 2001 2002 1982

Sources:DevelopmentStrategiesReport,RecentInvestments,City of St. Louis, USA, City of St. Louis DevelopmentActivities (http://stlcin.missouri.org/devprojects/).

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SLU has dramaticallyexpandedits campuseastwardand in the process has clearedand redevelopedthe earlier Mill CreekValley project. Over the pasttwo decades,campusreal estatedevelopmentat SLU hastransformeda deterioratedurbanlandscapeinto spectaculargreenspacecompletewith gardens, flowers, ponds, fountains, and sculptures.Over the past five years, direct SLU investmentsand the aggressivepolitical leadershipof its current president,Dr. LawrenceBiondi, SJ, havebeencreditedwith stimulating the redevelopmentof a vacantoffice tower (ContinentalBuilding) and an abandonedhistoric hotel (the Coronado)and the constructionof a new private educationalfacility (Cardinal Ritter High School), all on the edge of SLU's main campus. Somevestigesof political resentmentremainoverSLU'searlierland clearanceand demolition activities, but the university'srelations with local minority leadershavebeenlargely repairedandmostlocal observersregardthe university as one of the most important politicaland financial leadersin St. Louis's downtown redevelopmentinitiatives. When the city was immobilized by the politics of racial conflict or hamperedby ongoingfiscal crises, the university was able to take independentaction to organize,design, and implementplans to revitalize its immediateand surroundingenvironment. While revitalization, pursuedlargely through acquisition, demolition, and land clearance,was not without controversy,few critics currently question the pathof actiontakenby the university or arguethat the public interestwas not effectively served(Thompson1997). Interestingly,the pursuit of the CharlotteHornetsbasketballfranchiseby local investorspulled SLU administratorsback into the turbulent watersof downtown developmentpolitics. SLU's relationshipto the courtshipof the Hornets,however,was very different from the eventsthat characterizedthe Louisville case.Unlike at the U of L, NCAA athletics at SLU has a very small market shareof the disposableincome spenton sports as an entertainmentvenue.While its basketballteamhas aloyal fan following andthe soccerprogramis always nationally competitive,SLU is inclined to boast more about having the largest shareof scholar athletesof any school in ConferenceUSA. MoreoverSt. Louis (especiallyin comparisonto Louisville) hasprobably overinvestedin a sports and entertainmentstrategy(Timmermann2001b). The city has three professionalsports franchises:the Blues (hockey), the Cardinals(baseball),and the Rams (football). It has a downtown football dome(EdwardJonesDome),a downtownbaseballstadium(BuschStadium), a downtown arenathat housesthe St. Louis Blues (Savvis Center),and casino gambling on the riverfront. The Savvis Center and the Edward Jones Dome also serveasthe major venuesfor concerts,tradeshows,conventions,

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and other live entertainmentextravaganzas. Notwithstandingthe abundance of entertainmentand sports options, efforts to lure the Charlotte Hornets basketballteamby the ownersof the BluescompelledSLU administratorsto reevaluatetheir wholesalesupport of the city's downtown redevelopment strategies(Carey2001). Ironically, controversyover an on-campusor downtown basketballarenaopenedrifts betweenuniversity officials and private developersnot unlike thosethat surfacedin Louisville. Like their private-sector counterparts in Louisville, St. Louis Blues owners Bill and Nancy Laurie have worked aggressivelyto lure a professional basketballfranchise.They unsuccessfullycourtedthe VancouverGrizzlies and competedforcefully with Louisville, Norfolk, and New Orleansfor the Hornets.Accordingto local accounts,"St. Louis University officials watched nervously... as Laurie ... tried to add the Grizzlies to his sportsholdings" (Carey 2001, Fl). University concernwas driven by the fact that the men's basketballprogram schedulesseventeento twenty gameseach year at the SavvisCenter,a facility also operatedby the Laurie family. Shouldthe effort to bring a professionalteam to the city be successful,university officials fearedsignificantcompromisesin schedulingflexibility and a drop in potential televisionrevenue. While PresidentBiondi has often expressedinterestin having a top-fifty basketballprogram,university officials have neverbeenaltogetherpositive aboutplaying in the SavvisCenter.This cavernousfacility is much too large for an NCAA basketballprogramthat consistentlydrawsonly between10,000 and 12,000fans (Gregorian2002).As a result university officials haveperiodically considered buildinga smaller on-campusarena. Some downtown developmentinterestshave been lukewarm about the idea, arguing that it might competewith establishedconcertvenuesand undermineexisting revenuesthat might be harvestedby the SavvisCenteror other facilities. Even within the university community, supportfor a new arenahas beencontroversial. Some faculty groups have arguedthat SLU's educationalmission might be compromisedby the needto reallocatefunds away from academics and into an expensivearena. During the negotiationsfor the Hornets, the debateover the wisdom of building an on-campusarenaagain surfacedwithin the university, and administratorsbecameconcernedas they watchedthe Laurie family makenumerousconcessionsto the Hornets'owners.While university administrators madefew public statementsabout the negotiations,it was clear that SLU's interestswerenot necessarilytied to the Lauries' visionto housefour professional sportsfranchisesin the city. Shortly after the bid to attractthe Hornets failed, university officials placedthe on-campusarenaissueback on its active real estatedevelopmentagenda.

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CUMMINGS. ROSENTRAUB. DOMAHIDY. AND COFFIN

With its current contractto play at Savvis due to expire in the 2003-4 season,SLU had to make a decision.and in January2003 SLU administrators announcedtheir intention to constructan on-campusarena.The Board of Trusteesapprovedthe plan in February2003 to build a 12,000-to 14,000seatfacility at the estimatedcostof $80 million. The universityleft no ambiguity about its intentions to competedirectly with other concert and entertainmentvenuessuchas the SavvisCenterand the Family Centerin St. Charles(Munz 2003). The area targetedfor the new arenawas initially a severalblock site locatedin the heartof the GrandCenterarts and entertainment district directly acrossfrom the SLU campus(seeMap 9.3). The university beganrapidly acquiring land and buildings in that areaand initially teamedup with the arts and entertainmentfacilities already located there, including the Fox Theater,Powell SymphonyHall, SheldonConcertHall, and the Black RepertoryTheater.In fact expansioninto this geographicarea was totally consistentwith SLU's prior history of real estatedevelopment andcompatiblewith its promotionof an arts andentertainmentdistrict close to campus.PresidentBiondi reinforcedthis view whenhe stated,"This project will keepthe momentumin this areamoving forward" (Munz 2003, B 1). Expansionin this area,however,was stalled due to the cost of land acquisition and the associatedprice of real estatebeing chargedby entrepreneurial developers,speculators,and landowners.As a result the SLU administrationrecently moved the location of the new arenato a second areaidentified in Map 9.3. The proposednew arenais closeto the original location and requiresSLU to acquireless land. In a recentpressrelease, the university contendedthat "the new arenawill be located two blocks from GrandCenter,which will allow people,who cometo the arenafor an event,to also spendtime in the arts-and-entertainment district" (SaintLouis University 2003).The 13,OOO-seatbasketballarenawill also accommodate numerousotheractivities,including 13,000patronsfor stageconcerts,with 10,000seatshaving 180-degreeseating;6,800seatsto accommodatesmaller concerts; 14,000 seatsfor boxing, wrestling, and concertsin the round; 12,000seatsfor circus and family shows;and 100 boothsto accommodate tradeshowsand exhibits with more than 18,000squarefeet of floor space (Saint Louis University, n.d). The new arenawill also accommodateother university eventssuch as meetingsand graduationexercises,cultural extravaganzas,national conferencesand conventions,massesand religious events,high school athletic contests,as well as large trade shows and exhibits. As distinct from the U of L case,SLU hasthe financial andpolitical independenceto constructan on-campusarenawithout public-sectorsupport.It also hasthe political independence to move the location of its arenain order

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to bypassthe financial pressuresbeingexertedby entrepreneurialdevelopers andspeculators.Nonethelessboth universitieswerefacedwith strategicdevelopmentchoicestied to political and financial intereststhat were not necessarily consistentwith the educationalmission of the academy.In the caseof Louisville, it seemsapparentthat a downtownarenais inevitable,irrespective of the wishesof university administratorsor high-profile coachesto build an on-campusfacility. In the caseof St. Louis, however,failure to accommodate the university will likely producea competitive setof entertainmentchoices and stimulateadditionalclearanceandredevelopmentof the Midtown arts and entertainmentdistrict. Developmentof the on-campusarenawill also likely add to the growing reputationof SLU as an independentandprogressiveforce transformingthe Midtown sectionof its namesakecity.

Notes 1. The projectsidentified in Table 9.1 do not include all developmentthat took place in the downtown area. Somedevelopments(the city's monuments,new fire stations,etc.) werenot consideredherebecausethey would havetakenplaceevenif a new downtownstrategyhadnot beendevelopedandimplemented.Otherinvestments wherepropertytax abatementswere not providedalso are not includedin the table. 2. Indiana University is the managingpartnerof the joint campuswith Purdue and is responsiblefor all fiscal matters.

References Ames, D., N. Brown, M. Callahan,S. Cummings,S. Smock, and J. Ziegler. 1992. RethinkingAmericanurbanpolicy. Journal of Urban Affairs 14(3/4): 197-216. Birch, D.L. 1982.Who createsjobs?In A forum for small businesses. Transcription of a presentationin Louisville, KY. November3. Boyd, T. 1999. The downtown puzzle: How should the piecesfit? BusinessFirst, March 5. Available at http://louisville.bizjournals.com/louisville/stories!1999/03/ 08/story2.html. Canfield, M. 1973. $320-million neighborhoodupgradeprogram urged. St. Louis Globe-Democrat,January23: 12A. Carey,C. 2001.ExpertssuggestHornets,Blues,Savvisshouldbe run as one: IfNBA team comeshere it should be part of larger operation.St. Louis Post-Dispatch, December2: F1. City of Louisville, Downtown DevelopmentCorporation,Louisville Central Area, Plan. Louisville, KY: Authors. Inc. 2002. DowntownRedevelopment Crouch,R. 1989.MetropolitanLouisville's humancapital: Our future workforce at risk. Unpublishedmanuscript,University of Louisville Urban StudiesCenter, Louisville, KY. Cummings,S., T. Koebel, and A. Whitt. 1989. Redevelopmentin downtownLouisville: Public investments,privateprofits, andsharedrisks. In Unequalpartnerships: Thepolitical economyofurban redevelopment in postwarAmerica,ed. G. Squires, pp. 202-221.New Brunswick,NJ: RutgersUniversity Press.

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Cummings,S., and M. Price. 1997. Racerelations and public policy in Louisville: Historical developmentof an urban underclass.Journal of Black Studies27(5): 615-649. Cummings,S., A. Tomey, and R. Flack. 2004.Workforce developmentpolicy in the St. Louis metropolitanregion: A critical overview and assessment. In Workforce developmentpolitics: Civic capacity and performance,ed. R. Giloth, pp. 176211. Philadelphia,PA: TempleUniversity Press. Fagerstrom,R. 2000. Mill CreekValley: A soul of St. Louis. St. Louis: Missouri Historical Society. Gregorian,V. 2002. Biondi eyesnew arena:I hopeit's going to be reality. St. Louis Post-Dispatch,April 13: 4. Gunther,J. 1949. Inside U.S.A. New York: Harperand Row. Hudnut,W, andM. Rosentraub.1995. The Hudnutyearsin Indianapolis, 1976-1991. Bloomington: IndianaUniversity Press. Jones,E. T. 2000. Fragmentedby design. St. Louis: Palmerston and ReedPublishing Co. Munz, M. 2003. SLU arenawill competefor events.St. Louis Post-Dispatch,February 24: Bl. New TowniSt. Louis. (n.d.). New TowniSt. Louis [Brochure]. St. Louis, MO. Przybylski, M. 1998. The annual economicimpact of the researchactivities of the Indiana University Schoolof Medicine on the Indiana economy.IndianaUniversity: Centerfor Urban Policy and the Environment. Reinert, P.C., and P. Shore. 1996. Seasonsof change.St. Louis: University of Saint Louis Press. Rosentraub,M. 1997.Major leaguelosers: The real costofsportsand who'spaying for it. New York: Basic Books. SaintLouis University. 2003. SLU snnouncesarena location. SaintLouis University News Release,December18. Available at www.slu.edu/readstory/newinfo/3611. - - - . n.d. First tip-off. Arena stats. Available at http://arena.slu.eduJarena4.html [May 2004]. Thompson,S. 1997.Man with a mission:TheReverendLawrenceBiondi hasn'twasted any time during his 10 yearsat the helm of SaintLouis University. St. Louis PostDispatch,April 17: Cl. Timmermann,T. 200la. Sauerpreachescautionon NBA team:The meetingshowed "complications"to moving the Hornets.St. Louis Post-Dispatch,October26: Dl. - - - . 2001b. Can the NBA court successin crowdedSt. Louis market?St. Louis Post-Dispatch,October28: D 1. Turner, R., and M. Rosentraub.2002. Tourism, sports and the centrality of cities. Journal of Urban Affairs 24(5): 487-92. Walls, J. W. 1999.Onwardand upward: The story ofthe greaterIndianapolisprogress committee.Indianapolis:GreaterIndianapolisProgressCommittee. Yater, G. H. 1987. Two hundredyearsat the Falls of the Ohio: A history ofLouisville and JeffersonCounty, 2nd ed. Louisville, KY: The Filson Club.

10 Ryerson University and Toronto's Dundas Square Metropolis Project David Amborski

RyersonUniversity, a public university servingapproximately16,000students, is locatedin the centralpart of the City of Toronto.1 This casestudy describes a joint university-cityprojectadjacentto a public squarein downtownToronto: The Dundas SquareMetropolis Project. The university becameinvolved becauseit possesses a key land parcelon the northernedgeof the square. Circumstances fosteredby the City of Toronto'sdesireto revitalizea stagnant retail areaadjacentto the Ryersoncampuspresenteda unique opportunity for the university to enterinto a public-privatepartnershipwith the developer,Pen Equity. Specifically,Ryersontransferreddevelopmentrights to the developerin exchangefor accessto twelve new movie theatersfor classroomuse. Participation in this project providedRyersonwith much-neededclassroomspaceand a prominentlocation on the new public square.The City of Toronto Official Plan and the RyersonUniversity CampusMaster Plan offered the institutional and regulatory context for the developmentof the project becausethey permit the transferof developmentrights betweencampusland parcels. The casestudy examinesconditionsand negotiationsleading to an anticipatedmutually beneficial outcomefor the three keyparticipants:the City of Toronto, RyersonUniversity, and PenEquity. The study beginswith the context for the project, including the developmentpartnersand their motivations, followed by the planningand structuringof the deal and the eventualcomponentsof the project, and concludingwith the lessonslearnedfrom the negotiations and the resultingoutcome.

The Context Dundas SquarerepresentsToronto's first public-square projectin twentyfive years,providing an importanturban designand redevelopmentopportunity for the city. It is locatedat the intersectionofYonge and Dundasstreets, 175

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Map 10.1

Ryerson Campus

complement

A

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A complement complement

A

A

A

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RYERSON CAMPUS MAP Source:RyersonUniversity CampusPlanningDocuments.Usedby permission.

a vibrant comerthat is estimatedto havethe highestpedestriantraffic levelsof any intersectionin Canada,with an annualflow of approximately50 million people (see Map 10.1). The redevelopmentplan is a responseto the recent declining condition of the area,including concernsover increaseddrug transactionsand other criminal activity. The areasurroundingDundasSquarewas comprisedlargelyof marginallandusesandundesirableretailers,suchasabout thirty "dollar stores"within threeblocks of the redevelopmentsite. Several assetsare notable exceptionsto overall district decline: Eaton Centreand two Victorian theatersthat will complementthe DundasSquare

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development.The Eaton Centreis a downtown galleria-styleshoppingmall that attractsa large percentageof shoppersvia public transit. It is locatedon the southwestcornerofYonge andDundasstreets,at the southwestcornerof the square.The original EatonCentredesignturnedits backon Yonge Street by focusing activity on the interior of the mall, with negativeresultson the retail environmentin the vicinity of what is now DundasSquare.In recent yearsa city initiative hastransformedthe mall's blank wall into vibrantYonge Street storefrontsthat are contributing to the downtown retail revival. The refurbishedtheaters,locatedon the block southof the square,are significant becauseToronto ranks third behind New York and London in terms of live theater.Various policies and land usecontrols are employedto preserveand nurture this activity. The Participants The key participantsin the developmentof DundasSquareand the Metropolis Projectare the City of Toronto, RyersonUniversity, PenEquity, and their leadtenantAMC Theatresof Canada,as well as the businessand residential community. With a populationof 2.5 million people,Toronto is Canada'slargestcity and its downtown is the economicand cultural centerof the country. The entire city is regulatedby the City of Toronto Official Plan (masterplan) as well as the zoning bylaws. All cities in Ontario are requiredto prepareand regularly updatetheir official plans under the requirementsof the Ontario PlanningAct. Plansmay be amendedunderthe process specified in the act at the initiation of a property owner or the city. The act has a provision for appealsto the Ontario Municipal Board (OMB) by "interestedparties" who disagreewith city council decisionsregardinga new plan or amendmentsto an existing plan. The OMB is a quasi-judicialbody set up underprovincial legislationto hearappealsregardinga rangeof planningdecisions.As noted below the OMB held a hearingwith respectto the planninganddevelopment of DundasSquare. RyersonUniversity, like all universitiesin Ontario, is a public institution. University tuition fees are regulated,which meansschoolsrely on the provincial governmentfor both operatingand capital funds, augmentedby other fund-raising activities. FurthermoreRyersonhas the lowest amount of spaceper studentin Ontario, which is significantbecauseof the unusual increasein enrollment in the fall of 2003. This suddenchangeoccurred becausethe Ontario secondaryschoolsystemreducedthe numberof years in the high schoolcurriculumfrom five to four. Consequentlystudentscompleting the new four-yearcurriculumin 2003 weregraduatingandapplying

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for universitiesat the sametime as those graduatingfrom the former fiveyear curriculum. To meetthis demandRyersondevelopeda building programthat included new spacefor the Faculty of CommunityServices,Graphics,and Communication Management,as well as new buildings for the Engineeringand Continuing Education departmentsand the BusinessSchool. In addition to a generalneedfor more space,Ryersonalso requiredlarger classrooms.Under Ryerson'shistorical unionizedteachingcontract, class sizes have been kept relatively small. Consequentlythe old physicalplant createdand maintained classroomsizesthat were consistentwith that institutional structure. However,recentamendmentsto the faculty contractpermitlargerclasssizes, requiring larger classroomsto capitalizeon potentialefficiencies. Ryerson's1997 CampusMasterPlan is regulatedby and consistentwith the City of Toronto Official Plan.An importantprovisionin the Toronto plan permits Ryersonto transferdevelopmentrights, meaningthe university can consolidateunusedair rights onto one parcelof land. Air rights are defined as unusedpermittedbuilding spacedefined by city zoning bylaws. In exchangefor this ability to transferdevelopmentrights, Ryersonmust agreeto maintaintwo historic properties,OakhamHouseandO'KeefeHouse(Ryerson University 1997). The site for the proposedMetropolis developmentin DundasSquareintegratesRyerson'sexisting four-story parking structureand its associatedair rights. The structurewas built in 1986 and includestwo ground-floorretail uses:the RyersonBookstoreand a Tim Horton'sdonut shop.The site forms the easternhalf of a block that bordersonYongeStreet,andRyersonofficials have long recognizedthe potential to undertakea joint ventureto incorporatethe Ryersonpropertywith valuableYongeStreetfrontage(seeMap 10.2). Pen Equity is a wholly Canadian-ownedassetmanagerthat undertakes residential,commercial,office, and retail developmenton behalfof its pension fund clients. The city conducteda competitiveprocessthat resultedin the selectionof Pen Equity as the developerto acquire and constructthe Metropolis site, including use of Ryerson'stransferreddevelopmentrights. The firm hadexperiencein Toronto, Ottawa,andVancouver,but the Dundas Squaresite was its first major large-scaledowntown developmentproject. PenEquity's lead tenant,AMC EntertainmentInternational,is a large-scale businessowning 226 theatersin the United Statesconsistingof 1,719screens located in 22 statesand the District of Columbia. Through its subsidiary, AMC Theatresof Canada,the companyis developingentertainmentcenters in Ontario,Alberta, and British Columbia. Residentialgroupsand businessorganizationsalso havebeensignificant playersin the developmentof DundasSquare.Kyle Rae, the city councilor

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Map 10.2

179

Dundas Square CENTRE CENTRE

CENTRECENTRE

CENTRE CENTRE CENTRE

CENTRE CENTRE

CENTRECENTRE CEN TRC EEN TRC EEN TR E CENTRECENTRE CENTRE ATON CENTRE

Source:RyersonUniversity PlanningDocuments.Usedby permission.

representingthe area, led community input into the planning processand worked collaboratively with all parties in the formation of a development strategyfor the square.The Toronto EastDowntown ResidentsAssociation (TEDRA) , acitizens' organizationspeakingfor the broadercommunity, and theYongeStreetbusinesscommunityandpropertyownersall articulatedstrong interestin the project. Togetherthesestakeholdersformed the Yonge Street Businessand ResidentsAssociation(YSBRA) in the summerof 1995. Their concernsfocusedon the area'sdeclining condition and an ongoing desireto createan enhancedretail environment.A January 1996 consultant'sreport (Soskolne1996)was submittedto the city on behalfof the two associationsin an effort to promoteYonge Streetrevitalization in the vicinity of the Dundas Streetintersection,and the authorplayeda significantrole in representingthe businessassociationin subsequentplanningand negotiations. The Process Ryersonbecamemost deeply involved in the planningof DundasSquareat the final stage, when it becameopportunefor the university to exchange

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developmentrights for a negotiatedset of benefits.In addition to its direct interestsin the Metropolis development,Ryerson'sconcernfor the ongoing functioning of the squarepushedthe university to becomea member of the managementcommitteethat would overseethe square'songoing programming.

Planningfor the Area The City of Toronto initiated a planning study for the revitalizationof the Yonge and Dundasareain responseto a redevelopmentapplication filed for a nearbysite in 1992. The resulting analysiswas incorporatedinto the city's new official plan that was approvedin July 1993 and later amended for the developmentof DundasSquare.In the summerof 1994,responding in part to the desireof Eaton'sdepartmentstoreto strengthenits downtown retail presence,the city council approveda community developmentplan. This plan was the catalystfor the Downtown Yonge StreetRegeneration Program,which was approvedin March 1996 andincludedDundasSquare (City of Toronto 1996). TEDRA andYSBRA becameactively involved with the city council during the initial efforts to adoptthe CommunityImprovementPlanArea Bylaw that wasusedto implementthe proposalsdevelopedin the earlierdevelopment plan and subsequentregenerationprogram (City of Toronto, Planning and DevelopmentDepartment1996). This regenerationstrategywas a collaborative andjointly fundedeffort betweenthe cityandYSBRA andwasdirectedby a steeringcommitteechairedby Councilor Kyle Rae. Ryersonwas not involved at this stage,but the plan introducedthe DundasSquareconceptand instituteda joint public-privateapproachto the developmentof the plan. The plan statedthe desirability of combining the Ryersonparcel of land on the north sideof the squarewith the adjacentprivately ownedsitesto the westthat borderYonge Street.This combinationcreateda parcelof significant dimensionsfor a major anchorproject to be built adjacentto the square. The city apparentlydoubtedthe willingness of the Ryersonadministration to participatein the DundasSquareproject. Originally the city intended to assemblea large-scaledevelopmentsite on the easternsideofYongeStreet using its expropriationpowers to acquire the privately owned properties.2 The key Ryersonparcel was the subjectof correspondence indicating that the Ryersonland could also be subjectto expropriationif the university was unwilling to participatein the project. Ryersonwas not approachedregarding its participationin the projectuntil 1997. Despitethe expropriationthreat, that outcomewould havebeenin doubt anyway,becauseRyersonis a public institution with a similar power to acquireproperty.

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Ultimately Ryersonand the city both viewed DundasSquareas an opportunity to obtainimportantbenefitsthrougha negotiationprocess.Ryerson still neededaccessto the parkingfacilities on the parcelandthe city needed the parcel to implement its large-scaleredevelopmentplan. Subsequent negotiationsled to Ryersonretaining the existing land and parking garage while giving up the developmentand air rights associatedwith the site.3 The preparationof the Dundas Squareredevelopmentplan required the city to amendits official plan and zoning bylaw amendments.Preparation for the plan beganin 1997, with the city gaining expropriationpermission from the Provinceof Ontario to begin its aggressivesite assemblyof ten Yonge Street properties,including those adjacentto the Ryerson parcel that were targetedfor the developmentof the Metropolis project. The city met significant resistancefrom property ownersover the proposedexpropriationand the approvedplan and zoningbylaw amendments. The landownersclaimed they were not receiving fair and full compensation for the expropriationof their properties.The objectionscamelargely from long-termpropertyownerswho wereupsetover their inability to benefit from the anticipatedpropertyvalueincreases associated with theYonge and Dundasredevelopment.They questionedwhetherthe city should be able to expropriatetheir land andthen sell it to a private developerwithout giving them the opportunity to participatein the redevelopmentscheme. Consequentlynine of the ten expropriatedproperty ownersand one tenant exercisedtheir right to appealboth the amendmentsand the expropriation to the OMB. Ryersonhad a vestedinterestin the outcomeof theseactions, so it was considereda party to the hearing and was representedby legal counselto protectits interestsif necessary. The hearing concludedin May 1998, and the written decision on the matterwas releasedin June 1998. The OMB decisiondismissedall of the planningappealsand approvedthe official plan and zoning bylaw amendmentsas well as the CommunityImprovementPlan. The OMB found that the proposedproject constituted"good planning," meaningthat the redevelopmentobjectiveswere deemedto be in the public interest. Furthermore the OMB agreedwith the argumentthat the project would act as a catalyst for improving the economicand social well-being of the area. The city's applicationfor expropriationwas deemedto have merit and it was approved.Howeverthe OMB approvalwas conditionaluponthe city's endorsementof a commitmentto proceedwith the entire project, including funding, land expropriation,final agreementsbetweenthe city and PenEquity, a final leasebetweenAMC Theatresof Canadaand Pen Equity, and a numberof other associatedplanning conditions(Ontario Municipal Board 1998).

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Designingthe Squareandthe Metropolis Development The OMB approval permittedthe city to move forward on initiatives related to the developmentof the DundasSquarearea.First, during the summer of 1998, the city held a designcompetitionfor the squareitself; and second,it called for expressionsof interestin the developmentof the Metropolis land in conjunctionwith the Ryersonproperty.The designfor the 3,250-square-meter open spacewas expectedto include a 250-spaceundergroundparking garage,to be built by the Toronto Parking Authority, and a new entranceto the Dundassubwaystation.The plan had to account for both new developmentand redevelopmenton adjacentsites. The first phasequalification documentswere to be submittedby October, and the deadlinefor thoseselectedfor the secondphasewas the end of November. Among the forty-eight entries to the first phaseof the competition, six were selectedto participatein the secondphase.By the end of 1998 the city selectedthe Toronto-basedfirm Brown and StoreyArchitects, which also won a nationalAward for Excellencefrom CanadianArchitectmagazine for the project. After agreeingto participatein the Metropolis project, Ryersonand the City of Toronto negotiateda memorandumof understandingthat ultimately evolvedinto an agreementfor the transferof the university'Sair rights. This agreementwould ultimately be assignedto the developerselectedto purchaseand develop the site. Three companiesrespondedto the requestfor qualifications issuedin early 1997, and a consulting firm completeda detailed financial analysisof the proposals.A requirementplacedon all Metropolis developmentproposalswasthe inclusionof movie theatersthat would fulfill the city's agreementto provide Ryersonwith theaterseatingfor classroom use. PenEquity was selectedto undertakethe developmentof the site, including the useof Ryerson'sdevelopmentrights. This part of the site wasintegral to the successof the square,so the city wantedto ensurethat the development would be built and would be a successfulventure.The selectionand evaluationwas also importantfor Ryerson,to ensurethat the project could supportthe university'Sclassroomneeds.Pen Equity enteredinto an agreementwith AMC Theatresof Canadato be the primary tenantin the development, building on their previous working relationship in some suburban developments.The details of the proposeddevelopmentare in Table 10.1. Following the selectionprocess,the city assignedthe Ryersondevelopment rights agreementto Pen Equity, but retained a central role in this public-private partnership.The general requirementsresulting from these negotiationsare:

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Table 10.1

Metropolis Theatre Project, Toronto Project:

A 340,000-square-foot entertainment-based retail center anchored by an AMC 30-screen megaplex theater.

AMC30 Ancillary Total

115,000 sq ft 225,000 sq ft 340,000 sq ft

Parking for 6,100 spaces within a three-block radius. Tenant Mix:

AMC 30-screen/6000-seat megaplex theater, entertainment-based retail, interactive retail, leisure retail (books, music), leading fashion, themed restaurants and bars.

• The city andPenEquity will enterinto a developmentagreementandin conjunctionAMC and PenEquity will enterinto a lease.Ryersonalso will enter into an agreementwith Pen Equity concerningthe Ryerson land/developmentrights. • The city will assemblethe six lots of retail propertyonYongeStreetand secureair rights abovethe Ryersonlands. • The city will transfer the retail property on Yonge Street and the air rights abovethe Ryersonlands to PenEquity. • PenEquity will developandfinancethe theaterandthe retail space,andbe responsiblefor permanentfinancing of the development.PenEquity will coverthe costsof an incentivepaymentto Ryersonup to an agreedlimit. • AMC will operatethe theaterand pay rent to PenEquity. • Retail tenantswill pay rent to PenEquity. • Pen Equity will provide participation paymentsto the city in accordancewith the agreedformula. The benefits that Ryersonwill receive in exchangefor relinquishing its developmentpotentialon the parking garagesite to PenEquity are specified in Table 10.2.It is importantto note that the parking garageitself will remain in Ryersonhands,as will the retail spacefor the bookstore. Ryerson would be grantedweekday accessto the twelve theatersfrom 8:00 a.m. to 1:00 p.m. daily, which had an estimatedannual value of $3.6 million. A minimum estimatecould be valuedas low as $1.3 million, which would have a downwardimpact on the total benefits.The cashamountsfor the Victoria Mall and Lake Devo infrastructureimprovementswere fixed. The parking and Tim Horton's revenueswere estimatedfrom the project at currentrates.

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Table 10.2

Ryerson University Benefits, July 1997 Theater access (12 @ 5hrs/day) Cash (area improvements) Refurbishing Victoria Mall Parking revenue (20 Years) Tim Horton's Donut Shop (10 years) Lake Devo refurbishing Tax indemnity Total

$3,600,000 $1,000,000 $900,000 $10,000,000 (+ increases) $650,000 (+ increases) $700,000 Unknown $15,850,000

Source: Thesefigures were preparedby Ryersonstaff and presentedto the Ryerson Board of Governors. Note: The theaterbenefitswere basedon the building cost of Ryersonclassroomspace proratedto the percentageof the day that they may be used.The parking andTim Horton's Donout Shop revenuesrelate to guaranteesabovethe actual rents over the specifiedtime periods.

In addition to the developmentrights transfer, negotiationsbetween Ryersonand Pen Equity led to agreementon severalother issues.In conjunction with AMC, Ryersonformed a committeeof classroomusersto participatein finalizing a theaterdesignthat would be appropriatefor classroom activities.Additionally PenEquity wantedto alter the existingparkingstructure, and Ryersonagreedto the changesin exchangefor a large electronic billboard on the eastside of the building nearthe north end that is centralto the Ryersoncampus.Ryersonalso gainedless quantifiablebenefits associated with the developmentof the new squareand the Metropolis project: a long-soughtsubway linkage to the university; and a new Dundas Square addressthat was a reasonablealternativeto its long-time desirefor exposure on Yonge Street.

Establishinga ManagementCommittee Ryersonfelt it deserveda role in the managementof DundasSquarebased on its participationin the Metropolisproject,as well as the university'sinfluence over the successof the areawiderevitalization effort. Subsequently Ryersonand the City of Toronto organizeda Yonge-DundasSquareSymposium in May 2000 to seek community input regardingthe operationand managementof the square.The symposiumaddresseda broad rangeof issuesincluding security and safety, maintenance,programming,and crowd andnoisecontrol.A reportby the city's Policy andFinanceCommittee(2001) consideredseveral managementmodels but recommendeda board of managementmodel madeup of thirteenmembersincluding a city councilor,

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businessandcommunitygroupmembers,city staff, police:, andRyersonUniversity.4In December2001 the city council adoptedthe report'srecommendationsas the governancemodel for the square. The Boardof Managementhas a programplanningand operationaloversight role in managingthe square.In accordancewith its prescribedbylaws, the committeemust periodically review the operatingguidelines,developa sponsorshipprogram,identify issuesandseeksolutionsrelatedto the square's management,and formulate a businessplan and annual budget (City of Toronto Policy and FinanceCommittee2001). The expectationis that the Board of Managementbe financially self-sufficient within three years of becomingresponsiblefor DundasSquare. Statusof the Metropolis Project The original expectationwas that PenEquity would begin the projectimmediately after receiving approvalsin 1998, but it was delayedcontinuously andsomeobserversquestionedwhetherthe projectwould everbeconstructed. By mid-2003 the public-squarecomponentof the developmenthad been completed,programmingwas taking place on a regularbasis,and someadditional improvementsand developmenthad been initiated. In June 2003 Pen Equity obtainedpermits for excavationand shoring work for the constructionof the Metropolis Theatreproject on the north edgeof the square. Thesepermitsreflectedthe initial plan that had beenapprovedfor development, andthe expectationwas that the constructionwould proceedon a continuous basis until completion, althoughno specific time frame was announced.The lead tenantsremainedin place for the major retail component andAMC was committedto the theatercomponent. Becauseof the delaysRyersonwas seriouslyimpactedby lack of access to the theatersfor classroomspace.To addressthis deficit the university found a solution by using the Pen Equity/AMC project as its model. It negotiatedwith the ownersof the Carlton theatercomplexto makealternations to their nine theaters,which are located a short distancefrom the campus.Ryersonhas use of those theatersfrom 8:00 a.m. to 1:00 p.m., Monday through Friday. Presumably,after the Metropolis project is completed,Ryersonwill assesstheir needfor the continueduse of the Carlton theaters. Analysis of the Outcomes An assessment of Ryerson'sbenefitsfrom this developmentpartnershipshould considerthe following:

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• ShouldRyersonhaveparticipatedin this venture? • Did Ryersonreceivea fair exchangefor its developmentrights? • How did the delaysaffect the currentstatusof the project? Any evaluationmustacknowledgethat strongredevelopmentpressuresin the areabasedon a city policy initiative drovethe developmentof the Ryerson site, with supportfrom local businessand residentsgroups.Hints at a possible expropriationof Ryerson'sland if the university was uncooperative strongly motivatedthe university to participateand negotiatethe best deal possible.A prime benefit for Ryersonis the ability to use the Metropolis Theatrecomplexfor classes.This innovativeapproachprovidesRyersonwith classroomspacethat is appropriatein size andin termsof quality andequipment for lectures. Evenif the Ryersonparcelwerenot part of the designatedredevelopment, the university should have beeninvolved in the planning and designof the square,for two reasons.First, as an appliedlearningandresearchinstitution, Ryersonis already actively involved with its surroundingdowntown community through studio coursesand workshopsconductedin programssuch as urbanplanning,social work, early childhoodeducation,architecture,and environmentalhealth.Second,Ryersonneedsto havea voice in the development and managementof all areasadjacentto its campus.For exampleconstructionof the new squareand the associateddevelopmentaroundit could potentially have negativetraffic and crime impactson the Ryersoncampus. Traffic impactsmay affect adjacentstreetsand parking facilities, especially during the peak periodsof the university'S large continuing educationprogram. Crime and drug problemsin and aroundthe squarealso may lead to additional university policing costs if criminal activity gravitates into the greenspaceson the Ryersoncampus. Ryersonrequiresongoinginput into the DundasSquaredecision-making processto addressissuesrelatedto the developmentof the square,andmore specifically the programmingthat shouldbe consistentwith the educational use of the theaters.This input hasbeenachievedby granting a Ryersonrepresentativea position on the ManagementCommittee.If Ryersonhad not cooperatedin the developmentof the property aroundthe square,it could havebeenexcludedfrom participationin the committee. AssessingwhetherRyerson'sbenefitsas a result of the transferof developmentrights were a fair exchangerequiresviewing the partnershipfrom severaldifferent perspectives.First, the partnershipmust be consideredin the contextof Ryerson'sfinancial positionandthe availability of capitalfunding. Despitefund-raisingefforts and somecapital grantsfrom the Province of Ontario, the university would have had great difficulty funding a new

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building on the Metropolis site at the time the deal was negotiated.Consequently having a partnershoulderthe capital financing cost for the new facilities was very attractive, especiallybasedon the university'S immediate needsandthe studentenrollmentpressuresanticipatedfor 2003 andbeyond. A valid assessment must also comparethe value of air rights sold to Pen Equity relative to the benefitsreceivedby Ryerson.This may be difficult to assesssincethe saleof air rights is relatively uniquein Toronto, particularly for universities.Early versionsof Toronto'splanning regulationspermitted densitytransfersin designatedpartsof the city for small sitesandthe theater district. However, basedon the expectedRyersonbenefits of close to $16 million, andcomparingthatfigure to the developmentpotentialfor the 340,000 squarefeet on the Ryersonsite, one can make a rough analysisof the benefits andopportunitycosts.If the developmentvalue at the time of the agreement (1997) is estimatedin the rangeof the low $30s per squarefoot, the valueof the developmentpotentialwould be in the $10 to $11 million range, which is less than the almost $16 million in benefits to the university. A more conservativeestimateof $13.5 million, basedon a lower economic benefit for the use of the theaters,would still be greaterthan the opportunity forgone. Despitethis apparentpositive trade-off for the development rights, somemay still wonderif a greaterfinancial benefit could havebeen achievedif Ryersonhad beenable to deal directly on a competitivebasis with the site developers. Finally, havethe delaysin the developmentof the Metropolis projecthad importantimpactson the project?This questionis relevantbecausethe Metropolis developmenttook out permits and beganconstructiononly in the summerof2003.Given an original projectedstartdateof 1998,the projectis alreadyfive yearsbehindschedule,directly affectingRyerson'sneedfor use of the theatersfor classrooms.Somepartieshave been concernedthat the project would be abortedand beganquestioningthe likelihood that the developmentwould everbe completed.However,throughoutthe period of delays, therewerepositive signsthat PenEquity would not walk away from its commitmentto build the entire project. The deal structurespecifiescertain paymentsto be madeby the developerto the City of Toronto over time. In September2002the developermadea scheduled$10 million payment,bringing the grandtotal of paymentsreceivedby the city to $30 million. Uncertaintyaboutthe future of the Metropolis project haspersistedsince it was first announcedand throughoutthe delays.Reportsbeganto surface that the theaterindustry was curtailing some of its plans to build new megaplexesacrossNorth America, and it appearedthat somemarkets,including Toronto, could be overbuilt. Astute negotiationson behalf of the city and Ryerson should have included a compliancetime frame in the

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final agreementor a penalty clausefor noncompliance.This would have beenespeciallybeneficialfor Ryersonbecauseof its need for accessto the AMC theatersin the fall of 2003. Conclusion

Ryerson University'S role in the developmentof Dundas Squareis not surprisinggiven the typical consultativeprocessundertakenby communities affected by major developments,nor in terms of the university's mandatefor local community involvement. However, when considering the specificsof Ryerson'sparticipationthrough the transferof its developmentrights to the Metropolis Theatreproject, the university'Srole and approachare not standardbut rather innovative and probably unique in Ontario, if not Canada.Transfersof developmentrights have beena part of previous city plans, but they have typically been "as of right" rather than through a negotiateddeal brokeredby the city and involving more than two parties. The city appearedto use a carrot and stick strategy, suggestingthe possibility of expropriationwhile at the sametime enticing Ryersonwith someneededbenefits;that is, large well-equippedclassroom spaceand infrastructureimprovements.It appearsthat the sharing of commercialmovie theaterspacewith university classroomuse is unprecedented.This approachis especially attractive since many institutions such as Ryerson not only need additional space,but also have a shortageof funds for capital expenditures. Concernsover the desirability of this arrangementare nonethelessjustified, basedon the protractedtime to initiate andcompletethe project.When universitiesnegotiatefor this type of joint venturein the future, they need to considerwhen the benefitswill begin to accrue.The delayedtime frame in this caseintroduceda seriouselementof uncertainty,as the availability of classroomspaceremainedunknownand ultimately the university had to leasealternativespacein the Carlton theaters.Additional costs also must be considered,suchas thoseincurredby Ryersonto leasethe Carltonspace, provide additional multimediafacilities, and locate technicaland security staff on an off-campussite. This casestudy also may raisequestionsabout the desirability of universitiesenteringinto agreementswith developersin any situation. The Ryersoncaseappearsto demonstratea positive net benefitfrom this joint venture.However, universitiesshouldcarefully considerthe timing of the dispositionof their limited landholdings,particularly when undertaking a collaborativeproject contingentupon the useof their most valuabledevelopableproperty.

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Notes 1. The "new" City of Toronto was createdin 1998 when the provincial government requiredthe six municipalitiesthat formerly constitutedMetropolitanToronto to be unitedinto a single-tiergovernmentalunit. 2. Expropriationpowers given to municipalitiesin the Provinceof Ontario are similar to the powerof eminentdomain. 3. TheMetropolisprojectwasdesignedandconstructedoverthetop of theRyerson parking garage.It usesthe physicalspaceof the air rights abovethe structureplus the transferabledevelopmentrights from the campuslands. 4. The committeeconsistsof the ward councilor,four membersfrom the business community, one from the neighborhoodassociation,one from RyersonUniversity, onefrom the TorontoParkingAuthority, onefrom theYongeStreetMission, onefrom the Toronto TheatreAlliance, two city staff (economicdevelopment,and facilities and real estate),and one from the Toronto Police Services.For the operationof this committeeseeCity of Toronto, Policy and FinanceCommittee(2001).

References City of Toronto, 1996.DowntownYongeStreetregenerationprogram,Yonge-Dundas redevelopmentproject,projectplan. Toronto. City of Toronto,PlanningandDevelopmentDepartment.1996. Newplanningamendmentsfor DowntownYonge Street.Toronto. City of Toronto,Policy andFinanceCommittee.2001.YongelDundasSquare-Operations resulting from urban developmentservicesand governancemodel. Report No. 16. Toronto. Ontario Municipal Board. 1998.Yonge Streetregenerationproject decisionand reasonsfor decision.The Joint ConsolidatedHearingsAct. Toronto. RyersonUniversity. 1997. CampusMasterPlan.Toronto Soskolne,RonaldL. 1996.DowntownYonge:A programto promotethe regeneration of Toronto's main street. Preparedon behalf of the Yonge StreetBusinessand ResidentsAssociation(YSBRA). Toronto.

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Part III University Development Practices: Acquisition, Finance, Development, and the Deal

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11 An Overview of University Real Estate Investment Practices Ziona Austrian and Jill S. Norton

To understandthe role of the university as developer,it is importantto investigate the issuesthat affect a university'sacquisitionand developmentpractices and how theseissuesmanifestthemselvesin day-to-dayactivities. This chapterexplainsthe various approachesusedby universitiesto acquireand developreal estatearoundtheir campuses and proposesa framework within which universities'real estateinvestmentpracticescan be understood.The frameworkis basedon casestudiesand in-depthinvestigationof real estate investmentactivities at five universitiesacrossthe United States.While their experiencescannotbe expectedto representthoseof all universities,the case studiesprovide valuableinsight into the broad issuesthat affect university real estateinvestmentactivities. The five universities selectedfor study are The University of Arizona, PortlandStateUniversity, MarquetteUniversity, WayneStateUniversity, and the University of Pittsburgh.The criteria usedto selectthemincludedpublic versusprivate status,sizeof studentenrollment,location, and characteristics of the surroundingneighborhoods.The five casesinclude both public and private institutions with wide-rangingstudentenrollments.They are located in different regionsof the country, and their surroundingcommunitiesvary in termsof their economicstability andtheir designationas residential,commercial, or mixed-useenvironments.In addition to the formal criteria, the authorsselecteduniversitieswhosereal estateactivities were not well studied previously; exceptfor MarquetteUniversity and the University of Pittsburgh (seechapter2 of this volume) this criterion was satisfied.Information was collectedfrom a numberof sourcesincluding Internetsites, newspaper reports, planning documents,policy documents,and in-personinterviews with key individuals associatedwith the universitiesand surroundingneighborhoods(seeAppendix 11.1). 193

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Table 11.1 presentsbackgroundinformation about each university. The University of Arizona is a public university with nearly 37,000students.It is locatednorthwestof downtownTucsonandis surroundedby residentialneighborhoods.Portland StateUniversity is a relatively young public university locatedin downtown Portlandin a commercialareaadjacentto the central businessdistrict. Studentenrollmenthas grown steadily sincethe university was founded in 1955 and now exceeds20,000. It is currently the largest university in the OregonUniversity System. MarquetteUniversity, founded in 1881, is a private Jesuit university of about 11,000studentslocatedwest of downtownMilwaukee, Wisconsin.It is surroundedby expresswaysto the south and east and by primarily lowincome, renter-occupiedresidential neighborhoodsto the north and west. Wayne State University is a large public university with an enrollment of morethan 31,000.It is locatedin Detroit'sMidtown district, which lies north of downtown andis also hometo many of the city's cultural institutions.The areais boundedby expresswaysand the neighborhoodsthat lie within it are primarily low-income and havehigh renter occupancyrates. The University of Pittsburghis locatedin the city's Oaklandneighborhood, the educationalandcultural centerof Pittsburghandlocationof otheruniversities, large health carefacilities, museums,and other cultural institutions.The University of Pittsburghis a state-relateduniversity, that is, a hybrid of public and privateinstitution. Its Oaklandcampusenrolls more than 27,000students, and the university also has a smaller branchcampusoutsidePittsburgh.Oakland includesfour distinct residentialneighborhoods(north, west, central,and south) with varying demographicand economiccharacteristicsthat include bothlow-incomeandupper-incomehouseholds;someareasareprimarily renter occupied,while othershavehigh homeownershiprates. Following a brief descriptionof the analyticalframeworkguiding the study, the chapterdescribesfour factors that shapefour distinct aspectsof the real estateinvestmentpracticesof universities, using examplesfrom the fives casestudiesto demonstratehow this occurs.The chapterconcludesby highlighting theseconnectionsand discussingthe importanceof understanding university real estateinvestmentactivities in this context. Analytical Framework

The analyticframeworkthat emergedfrom the five casestudiessuggeststhat four primary factors influence the real estateacquisition and development practicesof universities.Thesefactors are referred to as the independent variables: motivation for investment,characteristicsof the physical environment surroundingthe campus,degreeof policy oversight facing the

Midwest (East North Central) Northeast (Middle Atlantic)

Tucson, AZ

Portland, OR

Milwaukee, WI

Detroit, MI

Pittsburgh, PA

The University of Arizona

Portland State University

Marquette University

Wayne State University

University of Pittsburgh

Midwest (East North Central)

West (Pacific)

West (Mountain)

Location

Institution

Census division (region)

Case Studies in University Real Estate Investment Practices

Table 11.1

31,168 27,190

State-related

10,988

20,110

36,847

Student enrollment

Public

Private

Public

Public

Type of university

Mixed-use

Mixed-use

Residential

Commercial

Residential

Surrounding neighborhoods

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university, and leadershipstyles and vision of university and civic officials. The realestateacquisitionanddevelopmentpracticesof universitiesaredriven by thesefactors and are referredto as the dependentvariables:the natureof the decision-makingprocess,type of projectsundertaken,financing mechanisms employed,and dynamicsof university-communityrelations(seeFigure 11.1). It is the complexinteractionof motivation, physicalenvironment, policy oversight,and leadership that shapeshow universitiesmakedecisions aboutreal estateacquisitionand development,the typesof projectsin which they chooseto invest, the financing mechanismsthey utilize, and how they manageuniversity-communityrelations.

University Real EstateInvestments:The IndependentFactors Although therewere many differencesamongthe five universitiesselected for study, it becameapparentthat many commonissuesaffectedtheir real estateacquisition and developmentpractices.In all casesthe motivation for development,physicalenvironmentof the university, the types of policies that govern university actions,and leadershipstyles of university administrators and local officials were important to understandingthe developmentprocess. Motivation Recognizingwhat motivatesuniversities'real estatedevelopmentactivities is importantin studying the developmentprocess.Motivation obviously affects the types of projectsthat universitiesundertake,but it can also affect the structureof the decision-makingprocess,availability of various financing mechanisms,and the natureof university-communityrelations. The primemotivationfor physicalexpansionby manyuniversitiesis steady growth in studentenrollment.A greaternationalemphasison postsecondary education,accompaniedby broaderaccess,hasresultedin dramaticincreases in the numberof peopleattendinginstitutionsof higher education.Over the last threedecades,total fall enrollment indegree-grantinginstitutionsin the United Statesincreasednearly 70 percent(Snyder, Hoffman, and Geddes 1998). Increasedenrollment leads to higher demandfor classroomsand laboratories,office space,studenthousing, and recreationfacilities. For exampleThe University of Arizona experienceda steady rise in student enrollment,growing from 6,200studentsin 1950to almost37,000by 2002. PortlandStateUniversity had about 16,000studentsin the mid-1990s,but by 2002 had more than 20,000, and the number is projectedto grow to 35,000by 2012.

UNIVERSITY REAL ESTATE INVESTMENT PRAcrICES 197

Figure 11.1

Analytical Framework

Independent Factors

Dependent Factors

Motivation

Decision-Making Process

PhysicalEnvironment

Type of Real Estate Projects

Policy Oversight

FinancingMechanisms

Leadership

University-Community Relations

Another motivation for much of the constructionon campusesis the need for top-notch facilities to attract and retain faculty and students. This is true for universitiesthat have traditionally had a strong research component,suchas The University of Arizona, and for thosethat want to build their researchcapacity or transform themselvesfrom commuter schoolsto more traditional universities, such as Wayne State and Portland State.Both universitiestraditionally serveda large numberof commuter students,but are making an effort to attract more studentsto live on campusand createa twenty-four-hourcommunity aroundthe university. They sharea commonvision, althoughPortlandStateis locatedin a vital downtown district andWayneStateis locatedin an areaundergoing significant redevelopment. While many universitiesengagein real estatedevelopmentto accommodate or facilitate growth, others are motivatedby a concernabout student recruitmentand retention that stemsfrom problemsin surroundingneighborhoods.Some collegesand universities,once part of vibrant urban centers, haveseentheir neighborhoodsdecline(primarily from the 1960sto the 1980s) and are now surroundedby urban blight. University leadersoften respondedto neighborhooddecline by constructingphysical and symbolic barriersaroundthe campusin an attemptto isolatethemselvesfrom the conditions plaguingthoseoutsidethe academiccommunity.This responsegenerally failed to satisfy studentsand their parents,who wanted a safer and more stimulatingenvironmentfor learning, and led to a greaterwillingness

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amonginstitutions to engagein large-scaleefforts to improve the surrounding physical landscape.The prime example among our case studies is MarquetteUniversity, which establishedtwo developmentorganizationsto revitalize the residentialand commercialbaseof the neighborhoodand devoted considerablefinancial resourcesto the effort. Its actions were solely motivatedby the needto improvethe conditionof the surroundingneighborhoodfollowing declinesin studentenrollmentthat stemmedfrom fearsabout neighborhoodsafety. By most accounts,both studentsand residentsbenefited from the university'sinvestment.

PhysicalEnvironment A university'sphysicalsettinghas adirect influenceon its propertyacquisition and developmentprocess.If a university needsadditionalspace,is there sufficient room to grow or will expansionput pressureon the surrounding land area?What are the specific typesof land usesthat surroundthe campus and how do they affect the process?The answerto thesequestionsdetermines what types of projects are possible, what funding mechanismsare available, who will be involved in decision making, and how community memberswill react.Rural andsuburbancampusesoftenhaveopenland available for development,but urban campusesare often landlockedby property that hasbeendevelopedfor otherpurposesor presentsimpedimentssuchas expressways,waterways,or railroads. Surroundingland usescan representa variety of problems.As might be expected,universitiesadjacentto residentialneighborhoodsoften encounter the greatestobstaclesin acquiringand developingreal estate.Residentsmay appreciateuniversitiesfor the many amenitiesthey bring (e.g., cultural and sporting eventsand community outreachservices),but the dominantpresence of a university in a residentialneighborhoodoften leaves neighbors feeling wary. When a university is in a growth mode, this warinessintensifies, becauseresidentsmay believetheir homesand quality of life arethreatenedby campusexpansion.Communityoppositioncan affectthe development processin various ways, dependingon how the university choosesto respondand whetherresidentshavepolitical powerto fight the university. The universitiesin PittsburghandTucsonareboundedby both upper-incomeand lower-incomeneighborhoods,but in both casesthe lower-incomeneighborhoodshavebornethe brunt of university expansion.As expected,the stable, upper-incomeneighborhoodsare less vulnerableto university expansion. They generallyhavethe resourcesand political influenceto fight encroachment, andthe highermarketvaluesmakeit more difficult for the universities to acquireproperties.

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Assemblingtracts of land is also particularly challenging.Sinceresidentiallots in urbanareastend to be small, it cantakeyearsto assembleenough land to build a neededfacility. The universitymustaggressivelypursueproperties when they becomeavailable and wait patiently for others. This not only makes it difficult for the university to meet its objectives,it also adds fuel to an alreadycontentioussituation. Residentsgenerallyopposeproperties being land bankedfor future development.A major complaint among neighborhoodresidentsin Tucson is that the university useshousesit acquires for purposesnot appropriatefor residentialneighborhoods(such as maintenanceor storagefacilities) or demolisheshousesonly to leavethe lots vacant or use them for surfaceparking. Even if residential structuresare maintainedto houseoffice activities, a scatteredpatternof university versus residentownershipchangesthe characterof the neighborhood. Universitieslocatedin commercialdistricts encounterdifferent issuesin the acquisitionanddevelopmentprocess.PortlandStateUniversity faces less oppositionto campusexpansion,but confrontsanotherset of obstacles,including intensecompetition for property in the city's vibrant commercial zones.The university must be able to competeon the openmarketfor available properties,which meansgarneringthe financial resourcesneededto match offers of private developers.Furthermoreuniversities are large bureaucraciesand not always structuredto make decisionsquickly, which is a seriousdisadvantagein a competitivemarket.To addressthis challenge,all universitiesin this studyhavedevelopedefficient decision-makingprocesses for actionsinvolving real estateacquisitionand development. While surroundingland usescan presentobstacles,they can also provide opportunities.Wayne StateUniversity, which is locatedin a deteriorated urbanarea,is able to benefit from underutilizedland by converting vacant buildings or industrial sites to meet its real estateneeds.The university's plans generally causelittle opposition, becausethe City of Detroit and some of the neighborsfavor any form of investmentover no investment.Moreover,acquisitioncostsaregenerallylow. WayneStatefaces other challengesin the developmentphase,however,becausethe time and expenseassociatedwith demolition, conversion,andenvironmentalcleanup can derail projects. At the same time some membersof the community would like to seelessdemolition and more historic preservationand highquality projects.They think the attitudethat any developmentis betterthan no developmenthas resultedin poorly designedbuildings that are out of characterwith the neighborhood. The physicalenvironmentintroducesanothersetof difficulties for universities with a rigid campusboundary,suchas a major thoroughfare,expressway, waterway,or railroad. Both MarquetteUniversity and The University

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of Arizona haveattemptedto reroutestreets,althoughthey failed becauseof strong community opposition. Thesetypes of boundarieshave also led to creative developmentstrategies.For examplePortland State University is exploring the possibility of cappinga low-level highway to allow construction overheadand is consideringan aerial tram as a river crossing. Stateand Local Policy Oversight Stateand local policies relating to real estateacquisition and development have a less visible but significant impact on university developmentactivities. The extentto which policies facilitate or restrict a university'sability to operatein the real estatemarketvariesconsiderably.Furthermore,oversight of university activities can originatefrom multiple sources. Thereare often significant differencesin the extentto which formal policies govern a university's actions with respectto real estatedevelopment. Privateuniversities,for example,aregenerallysubjectto therestrictionsplaced upon them by their boardsof trustees.While the possibility exists for disagreementbetweenboardmembersand administrators,both groupsare ultimately responsibleonly to the university, lesseningthe likelihood that other considerationswould interfere in the decision-makingprocess.This independencereducesdelays, facilitates funding approval, and makesit much easierfor the university to competein the real estatemarket. In the caseof MarquetteUniversity the president'sdecisionto investlarge sumsof university funds to revitalize the neighborhoodrequired only board approval. It shouldbe notedthat someprivate universitiesarrangebond finance through a public entity, and under such circumstancesmust considerpublic comment; however,their decision-makingprocessinvolving real estatedevelopment remainsprimarily internal. The level of autonomygrantedto public institutions differs widely from stateto state.Somepublic universitiesenjoy a level of independencethat is more characteristicof private universities; they do not have to go beyond their own board for project or funding approval.For exampleWayne State University (like all public universitiesin Michigan) is constitutionally autonomousand the governingresponsibilitylies with the university'sboard. Wayne Statedoes not face state-imposedrestrictionson the amountit can offer for real property and is not requiredto wait for approvalfrom a statewide body. The university issuesits own bonds,is responsiblefor the debt service,and has its own bond rating. In otherstatesthe boardthat governsall public institutionsof highereducation (e.g., a board of regents,a boardof higher education)must approve capital budgets,agreeto property acquisitionsover a specifiedamount,and

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authorizethe sale of bonds.In somecasesuniversitiesmust also obtain approval from the statelegislaturebeforethey can move forward with real estate acquisition and developmentplans, and some public universitiesface restrictions with respectto the price they can pay for real estate.Portland State,for example,operatesunderthe policies of the OregonUniversity System and the state legislature.Thesepolicies include a restriction on how much the university can bid for a propertyrelative to the appraisalprice (the bid cannotexceedthe averageof two appraisals);a requirementfor approval from the boardof the OregonUniversity Systemwhen the purchaseprice of a property exceeds$100,000;and approvalfrom the statelegislaturewhen the price exceeds$1 million (OregonSecretaryof Staten.d.) . Similarly, The University of Arizona must receiveapprovalfrom the Arizona Board of Regents(ABOR) for real estatetransactionsvaluedat morethan$250,000(Arizona Board of Regents1983). The restrictionson acquisitionprice and the time delaysinvolved in obtainingtheseapprovalscanbe substantialobstacles in the developmentprocess,limiting the university'S ability to competein the market. Someuniversitiesmay also face restrictionson the amountof bond debt they canissue(or canbe issuedon their behalf), which clearly influencesthe feasibility and timing of developmentplans. For examplethe OregonUniversity Systemissuesbondson behalfof PortlandState,but bond salesalso must be approvedby the statelegislature.In Arizona the Board of Regents issuesbondson behalfof the state'spublic universities.The statelegislature mustnot only approvebondsales,but also authorizesthe amountof debtthat the Board of Regentscan issue over severalyears. Even if some debt has beenretired, additionalbondscannotbe issuedduring that time period. Statepolicy can be particularly restrictive if it limits where a university can acquireproperty. PortlandStateUniversity'Sreal estateacquisitionsare guided by boundariesnegotiatedby the university and the city (Portland State University District Partnershipfor Community Development1993). Although the university can purchasepropertyoutsidethe limits for student housingor investmentpurposes,most acquisitionsoccur within the agreedupon boundaries.All public universitiesin the Stateof Arizona are required to restrict property acquisition to a clearly defined area(University of Arizona1988,2000).As a result greaterimportanceis placedon acquiringland whenit becomesavailablewithin the planningarea,anduniversitiesareforced to carefully consideroptimal land uses.The University of Arizona can purchasepropertiesonly within negotiatedboundariesand is subject to even strongerlimitations. In someareaswithin the definedboundariesthe university cannot buy property unless the owner initiates contact and expresses interestin selling.

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Local governmentstend to have little direct control over university real estateacquisitionand developmentplans, but may be able to influencehow projectsare developedthroughthe designreview process.Someuniversities in this study were requiredto submit their plans to the local planningboard for review. This mandategives public officials andcitizensan opportunityto voice concernsabout how proposedprojects mightaffect their community and may help ensurethat proposalsare sensitiveto surroundingarchitecture andland uses.Designreview can also be used as a tool to ensurecommunity involvementa,nd acceptanceof university developmentactivities. The City of Pittsburghhas usedthis approacheffectively to encouragethe University of Pittsburghandotherlargeinstitutional developersto involve residentsand community groupsin their decision-makingprocesses.

University Leadership The direction that a university takes with respectto real estateacquisition and developmentultimately dependson its leadership.The university president and top-level administratorsset the agendafor physical development. Their vision for the future of the university andtheir perceptionof the role of the university as a civic partnerdeterminewhat they do and how they do it. Real estatedevelopmentis sometimesdriven by a new vision for the university, as when a changein leadershipresultsin a dramaticshift in the focus and priorities of the institution. For example,at The University of Arizona, an increasedemphasison the bioscienceshascreatedthe needfor new hightech laboratoryfacilities. At Portland State and Wayne State, the desire to transformfrom commutercampusesto moretraditionalresidentialcampuses is precipitatingthe constructionof additionaluniversity-ownedhousing. Leadershipalsoplaysthe key role in determininghow the universitymoves through the developmentprocess.Leaderswho seethe university as an importantpart of the neighborhoodand city are more responsiveto the needs and concernsof the larger community. The neighborhoodrevitalization effort initiated by MarquetteUniversity occurredbecausethe institution welcomed a new presidentwho recognizedthat the university's fate was intertwined with that of the neighborhood.He knew that fast and drastic action had to be takento addressthe poor condition of the neighborhoodin orderto preservethe university'sfuture. The presidentwas able to convince the university board to devotethe necessaryresourcesto make a difference in the neighborhood,and redevelopmentactivities were carriedout in a way that addressedthe needsof local residentswhile stopping the downward trend in enrollment. Someuniversity leadersassesstheir plans in light of broadercommunity

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goals,show willingnessto partnerwith public agenciesfor mutually beneficial outcomes,and ensureavenuesfor community participationin decision making.Whenthe University of Pittsburghnameda new chancellorin 1996, it usheredin a new era in university-communityrelations.The chancellor placed greaterimportanceon establishingpositive relationshipswith residents,neighborhoodorganizations,and city officials, and he communicated this vision to his top administrators.In contrast,otheruniversitiesact quietly on issuesinvolving real estate,hoping to avoid complicationsand controversy. The approachthat a university selects appears to be a direct reflection of how the core leadershipviews the role of the institution in civic affairs.

University Real EstateInvestments:The DependentFactors This sectionexploresthe decisior.-makingprocessin somedetail, including what guidesdecisions,who is involved in decisionmaking, andhow barriers to developmentare addressed.It also identifiesthe typesof real estatedevelopment projects that are undertaken,how they are financed, and how the developmentprocessaffects university-communityrelations. It is in these discussionsthat the impact of the independentfactors becomesapparent.

Decision-MakingProcess University real estateinvestmentdecisionsareguidedby long-termacademic needsas well as short-termopportunities.As explainedearlier, many universities are experiencinggrowth in studentenrollmentand are increasingacademicofferings.They alsorecognizethat cutting-edgeresearchfacilities and a safe, vibrant campusenvironmentare neededto attract top studentsand faculty. All universitiesin this study arelocatedin centralcities andsomeare in or near the downtown area. As such they are landlockedby residential neighborhoods,other large institutions,freeways,or other physicalbarriers. Someof the universitiesare locatedin growing cities wherereal estateis in high demand,while others are in redevelopingareaswhere somecompetition exists for the most favorablesites or for new or rehabilitatedbuildings. Theseissuesaffect how universitiesact in the real estatemarket. Many universitieshavea masterplan that guideslong-termdecisionsand takesinto accountthe factorsthat affect the real estateacquisitionanddevelopmentprocess,whetherdirectly or indirectly. The motivation for new development,opportunitiesandobstaclesthat exist in the physicalenvironment of the campus,policy restrictions,and the vision of university leadersare generallyreflectedin the masterplan. WayneStateUniversity'smasterplan, completedin 2001, supportsthe objectivesto enhancethe researchcapacity

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of the institution and to develop a more traditional, residentialcampus.It identifies where expansionopportunitiesexist and where further development would be more problematic.The masterplan includes elementsthat support the vision of the current leadershipto better connectthe campus with the surroundingcommunity by creatinga twenty-four-houruniversity district (WayneStateUniversity 2001). PortlandStateUniversity'smasterplan not only addresses the institution's long-termacademicneeds,but also reflectshow leadersenvisionthe role of the university in the larger community. The university's plan is integrated with the city's CentralCity Plan, which includesa universitydistrict (Bureau of Planning1988).PortlandStateled the planningeffort for the district, working alongsideresidentsandotherstakeholders.The resultof this processwas a plan that addressedthe needsof the university while respectingthe interestsof thoseoutsidethe academiccommunity. Although universitiesare guidedby masterplans that addresslong-term needs,they mustbe able to respondto opportunitiesas they arisein the local real estatemarket. How do universitiesstructuredecision-makingprocesses that guide real estateacquisition and development?Becausemost institutions competewith private-sectordevelopersor other large institutions,they find ways to streamlinetheir decision-makingprocessesto respondquickly when to opportunities.Universitiesareknown as slow-movingbureaucracies it comesto curriculum changes,educationalinnovations, and hiring practices, but the institutionsin this study developedstrategiesthat haveallowed them to act quickly on decisionsinvolving real estateacquisition. In both public and private institutions, the decisionsare usually madeby a handful of top administratorswho have easyaccessto the university president. For example,at the University of Pittsburgh,a state-affiliated(quasi-public) university, the assistantvice chancellorfor businesscontinuouslyreceives information on real estateopportunitiesand can approachthe vice chancellor and chancellorwhen needed.Administratorshave the authority to approve deals of less than $1 million. More expensivedealsrequire approval from the Board of Trustees'propertyandfacilities committee,but this group also works quickly to authorizedeals.Becausethe university is locatedin a denselypopulatedareawherereal estateis relatively scarceand other large institutionscompetefor the sameproperties,the university'scurrentadministration and Board of Trusteeshave structuredthemselvesto act quickly when making decisionson real estate. As describedpreviously,universitiesare guidedby different policies concerning real estateacquisition. Universities frequently need to circumvent the restrictionsimposedon them and developmechanismsthat enablethem to be active playersin the real estatemarket.A university foundationcan be

UNIVERSITY REAL ESTATE INVESTMENT PRACTICES 205

an importantpartnerin this effort. As stategovernmentagencies,the public universitiesin this study were generally restrictedto making an offer at or below the averageof two appraisals.In localities with a competitive real estatemarket, increaseddemandmay push the price beyondappraisedvalues,makingit impossiblefor a university to competewith the private sector. As an independentorganization,a university foundation does not face the sametype of restrictions and, with the appropriateresources,can make a more competitivebid. The University of Arizona andThe University of Arizona Foundationhave usedthis approachto their mutualadvantage.The foundationpurchasespropertiesof interestto the university and then entersinto an agreementwhereby the university leasesthe propertyfor a period of time. At the end of the lease the foundation deedsthe property to the university. The foundationbenefits becauserent paymentsare structuredto provide a good rate of return on the investment,and the university benefitsbecauseit gainsimmediateaccessto the property and eventualownership.This arrangementhas also beenused whenthe universityhasbeeninterestedin propertyoutsideits planningboundary, and when quick action is required and the university cannot wait for approvalfrom the board of regentsor statelegislature.This type of partnership is possibleonly when the foundationhas adequatefinancial resources. PortlandStateUniversity, for example,has not yet beenable to rely on its foundationbecausethe universityis relatively young,it doesnot havea large, well-establishedalumni base,and the foundation'sassetsare fairly limited.

TypeofRealEstateProjects Most universitiesinvest in different types of real estateprojects, including studenthousing,office andacademicbuildings,researchlabs,researchparks, parking garages,recreationand athletic facilities, and mixed-usestructures. The specific typesof projectsin which a university choosesto invest reflect its motivationfor development,the opportunitiesandconstraintsin the physical environment,and the agendaof university leaders. All five universitiesin this studyhaverecentlydeveloped,or haveplansto develop,new residentialunits for students.Motivatedby eitherrapid growth in enrollmentor the desireto bring more studentsto campus,all are focused on developing more university-ownedhousing. Wayne State University openeda new dormitory-style undergraduatehousingcomplex in 2002, its first newly constructedresidentialbuilding in almost a decade,and additional units are planned as part of the effort to create a twenty-four-hour campuscommunity.The University of Arizona hasmultiple housingprojects underway to meetthe needsof its growing studentbody.

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More studentsmeansincreaseddemandfor parking, and both The University of Arizona and Wayne State have had to make substantialinvestmentsin parking facilities. PortlandState,despiteits rapid growth, hasbeen ableto focus its investmentson classrooms,office space,andresearchfacilities becauseit benefitsfrom a highly utilized public transportationsystem. The University of Arizona and Wayne Statealso boastnew studentcenters. The University of Arizona openeda studentunion and bookstorein November 2002 to replacea smaller, outdatedfacility, and WayneStateUniversity recently completeda 700,000-square-footwelcome center that includes a bookstoreand servesas a one-stop-shopfor new or prospectivestudents. The University of Pittsburghhasundertakena numberof projectsto meet the demandsbroughton by continuousgrowth overthe last severaldecades. Studenthousing was a top priority becausethe large influx of studentsin surroundingneighborhoodswas having a negativeimpact on the local housing stock. A SOO-unit, garden-styleapartmentcomplex was recently completed to addressthat need. The university also built a large convocation centerto host basketballgamesand specialevents;and it providesa student recreationcenter and spacefor retail establishmentsand restaurants.Anotherrecentprojectis a multipurposeacademiccomplexthat providesspace for classroomsand offices as well as ground-floor retail (Gallinger 2001; Schacknew1999). The University of Arizona took advantageof an unusualopportunity in the real estatemarket to develop a researchpark that supportsits research mission.IBM was having difficulty finding a buyerfor the propertyin 1994, and the university was able to negotiatea very favorablefinancing arrangement for its acquisition.Locatedseveralmiles from the university, the ScienceandTechnologyParkis consideredits mostvaluablereal estateholding outsidethe main campus. Portland State'sreal estateinvestmentstrategiesmust capitalize on the limited developmentopportunitiesthat exist in the campus'sdenselypopulated downtown location. The university carefully monitors the local real estatemarket and strategically acquiresproperty as it becomesavailable. This policy has allowed the university to build some new facilities and to adaptmanyexistingbuildings for academicuse.PortlandStaterecentlyconstructeda new building to housethe College of Urban and Public Affairs; otherprojectsunderway include a new studenthousingfacility anda Native American studentand communitycenter. To accomplishits goal of improving andstabilizingits surroundingneighborhood, MarquetteUniversity (through the developmentorganizationsit created)investedin hundredsof propertiesover a period of severalyears. Most of their acquisitionsinvolvedmultiunit apartmentbuildings,which were

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renovatedand then leasedto responsibletenants.Marquettealso investedin a large mixed-usecomplex in an effort to revitalize the commercialbaseof the neighborhood.The $30 million CampusTown project included 88,000 squarefeet of retail spaceand 153 units of studenthousing (Carlson 1994; Farbsteinand Wener 1996; Tijerina 1994).

FinancingMechanisms Universities rely on a variety of methodsand tools to finance real estate acquisitionand development,suchas generalobligation and revenuebonds, state capital budget allocations, partnershipagreements,tax incrementfinancing,commercialloans, and university endowmentand operatingfunds. Specific funding choicesare affectedby various factors, including in large part the policies regulatingthe university. Bonds The most popularmeansof financing large real estatedevelopmentprojects is the sale of bonds.They are generallyissuedby the university or a statewide administrativebody (suchas a boardof regents),but may be issuedby otherentities,suchasa dormitory authority.Generalobligationbondspledge the full faith and credit of the institution to securethe debt. The bondsmay be tax-exempt(that is, the interestpaymentsto bondholdersare tax-exempt) if proceedsof the sale are used to constructacademicfacilities; bonds are taxableif usedfor for-profit enterprises,suchas retail space.Revenuebonds are securedby a specific revenuesourceand are thereforeusedfor revenueproducingprojects,suchas studenthousingcomplexesor parking garages. For somepublic universitiesthe statelegislaturemust approvethe saleof bonds,which may influencethe financing mechanismselected.For example the Arizona legislaturerestrictsthe amountof debt that the Arizona Boardof Regents(ABOR) can issuein the form of generalobligation bonds(referred to as systembonds in Arizona) for a given period of time. When the debt limit is reached,ABOR must go backto the legislatureto requestmore bonding authority.Becauseof theselimitations The University of Arizona also uses instrumentssimilar to revenuebondscalledCertificatesof Participation(COPs), for which a specificprojectservesasthe collateral.COPshavea slightly higher interestrate,but they do not put the institution at risk, becausethey pledgeonly thebuilding beingfinanced.Furthermore,COPsmustbe approvedby theBoard of Regentsand reviewed (but not approved)by the legislature.Debt issued through COPsdoes not reducethe amountof debt that ABOR can issue on behalfof the university in the form of generalobligation bonds.

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PortlandStatealso must contendwith statepolicy when consideringthe useof bondsto financereal estatedevelopment.Sincethe OregonUniversity Systemmust issuethe bonds, its board must approvethe sale; in addition, statelegislative approvalis required.The systemhas two types of bonding authority: Article XI G Bonds,for which the statepaysthe debt service;and Article XI F Bonds,which placeresponsibilityfor debt servicewith the university for which the bonds were issued.The choice of debt instrumentis clearly influencedby policies and decisionsmadeat the statelevel. By contrastWayneStateUniversity is solely responsiblefor its debtservice and is able to issueits own bondsand maintainits own credit rating without stateinvolvementin financingdecisions.Similarly the Universityof Pittsburgh, a state-relatedbut not a public university, issuesits own bonds accordingto how much debtit needsandits credit rating allows. About 70 to 75 percentof the university'sbuildings havebeenfunded throughtax-exemptbonds. State Capital Budget

All public universitiesin this study also use somestatecapital funds to financetheir real estateacquisitionand development.The availability of state funds determinesthe extent of needfor alternativefunding mechanisms.In Michigan, public universitiessubmit a five-year capital outlay requestto the state each year. Over the last ten years the state funded five or six major projectsat WayneStateUniversity, althoughit did not budgetany moneyfor capital expendituresin the pasttwo years.Michigan has a 75125 rule, which means thatfor approvedcapital outlay projectsthe stateprovides75 percent of the cost and the university must finance the remaining 25 percent.The University of Pittsburgh'sstatusas a state-affiliateduniversity allows it to fund real estateacquisitionand developmentthrough the capital budgetof the commonwealth.Eachyearthe universityidentifiesits top ten capitalbudget priorities and submitsthem to the state.The governorguaranteesa specific amountover a period of time, which allows the university to proceed with its highestpriorities; most recently,the university was guaranteed$100 million over five years. PartnershipsAgreements

Partnershipsare an increasinglypopularway for universitiesto financereal estate development,and all of the universitiesin this study worked with privatesectordevelopersor other entities to meettheir developmentobjectives.The reasonsfor doing so varied, but generallywere relatedto funding limitations or policy restrictionsthat madeit difficult for the university to act alone.

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The University of Arizona frequently relies on private-sectordevelopers and local foundationsas developmentpartnersbecauseof its own debt limitations, time delays associatedwith seekingstateapproval,and restrictions on wherethe university can acquirepropertyand how muchit can offer. For examplethe university partneredwith the private sector to finance its researchpark at a site built by IBM as a researchand productioncenter.The property was purchasedfor $98 million, financed by bonds floated by the Arizona ResearchPark Authority, a nonprofit organizationcreatedto help acquire,develop,andfinanceresearchparksin the state.IBM agreedto lease back 60 percentof the spacein the park for twenty years; the annuallease paymentsreceivedfrom IBM are sufficient to repay the annualdebt on the bond. At the end of the twenty-yearperiod, the park will belong to the ArizonaBoard of Regents.The university is now planninga large development around the medical campusand is again looking to partnerwith a private developerin a lease-backarrangement. PortlandStateUniversity providesanotherinterestingexampleof the benefits of partneringwith the private sector.A private companyfinanced and installedthe electrical,heating,and telecommunicationdistribution systems in the building that housesthe College of Urban and Public Affairs. The companyretainedownershipof the equipmentanddistribution systems,and the university enteredinto a thirty-year leasefor their use.At the end of the leasethe university takes ownership. A new type of partnershiparrangementused by universitiesand private financial entity developersto build studenthousinginvolves a special-purpose establishedsolely for this purpose(Brick 2002). The University of Arizona servesas an example.The universityobtainedpermissionfrom ABOR to form the SouthernArizona Capital Facilities FinanceCorporation,which operates as a distinct nonprofit entity with the authorityto issuetax-exemptbonds.The corporationsold the bondsneededto finance a housing complex,the university leasedthe land to the corporation,and the corporationhired a private developer to build the complex for a one-time fee. Revenuereceivedfrom rentsis usedto repaythe debtissuedby the corporationandto makepayments to the universityfor the groundlease.The university will takeownershipof the building in twenty years.The advantageof this type of arrangementis that the university does not have to cover the cost of development.It is considered "off-balance-sheetfinancing." The controversyrelatesto the questionof who is ultimately responsiblefor the debt should revenuefall and default occur. The financecorporationis essentiallya creationof the university; however,as a separatelegal entity it carriesits own debt. Despiteconcernsby outsidefinancial analysts,this remainsa popular financial tool for The University of Arizona and otherpublic universitiesin the state.

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Tax IncrementFinancing

Tax incrementfinancing (TIP) allows propertytax receiptsthat governments receivefrom new developmentin a definedareato be divertedto pay for the area'sdevelopmentcosts.Any future growth in propertytax revenueis used to pay for the development.Once an areais formally designatedas a TIP district, the initial assessedproperty valuation servesas a baseline.As the areais developedand property valuesincrease,the tax increments(the differencebetweenthe initial assessed value and the increasedvalue) pay for the bondsthat were issuedto financeimprovements.Universitiesmay enlist the supportof the city in which they are locatedto establisha TIP district to financedevelopmentcosts,but the projectmustinvolve a public purposeand thereforeopportunitiesare limited. Marquettewas the only university in this study to use TIP. One of the largestefforts of Marquette'sredevelopmentinitiative was CampusTown, the $33 million project that includedresidentialand commercialspace.The developmentorganizationschargedwith managingthe effort worked with the City of Milwaukeeto arrangefor TIP to supportthe commercialdevelopmentportion of the project.The TIP was only one sourceof funding for this project, accountingfor about 13 percentof its cost. CommercialLoans

Most universitiesdo not use commercialloans to finance their real estate acquisitionor development,althoughthe organizationsworking on behalfof MarquetteUniversity usedstandardcommercial loansand mortgagesto acquire andrenovateproperties.In severalcasesthey agreedto fifteen- or twentyyear mortgagesat market rates, but only where they believedthe property would earna rate of return sufficient to cover mortgagepayments. EndowmentFunds and Other University Funds

Someuniversities,especiallythose with large endowments,use endowment funds to finance portions of their real estateinvestments.During the 1960s the University of Pittsburgh'sBoard of Trusteesdecided to designateone-halfof all unrestrictedendowmentfunds for property acquisition. Recently its endowmentfunds were used to finance the forprofit portion of a multipurposeacademicbuilding otherwisefunded by tax-exemptbonds.MarquetteUniversity also madea large investmentin its redevelopmentinitiative, committing $9 million of unrestrictedfunds to get the effort underway.

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University-CommunityRelations Universities are large and powerful institutions with their own visions and agendas.The real estateacquisitionand developmentactivities that support theseagendashavean importantimpact on university-communityrelations. Thereis often an expectationthat universitiesshouldwork for the betterment of the surroundingcommunity and that they should be active "civic partners."In manycasesuniversitiesdo makeimportantcontributionsto the larger community; however,a university'sreal estateacquisitionand development activities often createconflicts that offset those contributions.For eachof the universitieswe studied,effectively managinguniversity-communityrelations was an importantpart of the real estatedevelopmentprocess. A university's motivation for developmentis critical in this context. MarquetteUniversity managedto maintain positive relations with the surrounding neighborhoodbecauseits efforts involved rehabilitationof neighborhood structures,and most stakeholdersbelieved the university's redevelopmentactivities would benefit the community. The university was generallyableto dispelconcernsaboutgentrificationby promisingthat rents would be held at a rate affordableto neighborhoodresidents.In contrastThe University of Arizona has struggledto establishpositive relations with its neighborswho fear encroachmentcausedby the university'srapid growth. The characterof the physicalenvironmentcan createchallengesandhave an importantimpacton university-communityrelations.By all accountsPortland Statehas maintaineda very positive relationshipwith stakeholdersin the downtown areasurroundingthe campusand the city as a whole. Whenever possiblethe university has usedexisting buildings to meetits growing Neighborhood needs,andhasdoneso with little displacementof businesses. residentscommonlyexpressedthe view that the university has actually contributed to the vitality of downtown. The importanceof leadershipin shapinguniversity-communityrelations was apparentin each of the five casestudies,and in all casesthe current leadershipis believedto be more sensitiveto the university'sneighborsthan previousadministrations.Someof this sentimentstemsfrom the realization that a healthyneighborhoodis importantto the future of the institution and the recognitionthat information sharingcan go a long way toward improving the university-communityrelations.The University of Pittsburgh'sneighbors took a more favorable view as a result of some key changesin administrativeprocesses.The university establisheda singlepoint of contact to whom neighborscould direct their concernsand thus eliminatedinternal communicationgaps.That individual also was given adequateauthority to representthe university and make decisionson its behalf.

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While the leadersat the five universitiesin this study showedvarying degreesof sensitivity toward their neighbors,they all recognizedthe importance of at leastinforming neighborsabouttheir developmentplans to avoid speculation. Therewere no instanceswherecommunityoppositioncauseduniversities to significantly changetheir overall developmentagendas;howeversome specific projects were blocked or concessionswere madeto satisfy community stakeholders.For examplecommunity opposition to The University of Arizona's proposedpurchaseof an apartmentbuilding createdsuch negative public relationsthatABORrefusedto approvethe purchase.The University of Pittsburghaltered design plans on a studenthousing complex to meet residents'requestto have doors face the streetratherthan an inner courtyard,resulting in the complexbeing betterintegratedwith the neighborhood. The extent to which community groups can affect the developmentprocessis partly a function of their sophistication.Well-organizedgroupswith highly skilled leadersare betterable to exert pressureand more equippedto negotiatewith the university.In Tucson,leadersfrom the neighborhoodsouth of the main campuswere able to negotiatea memorandumof understanding with the university that establishedguidelinesfor acquisition of properties (with greaterspecificity than the state-imposedpolicy relating to acquisition within the planningboundaries).The agreementalso definedacceptableand unacceptable land usesfor university-ownedproperty within the residential area (Memorandumof Understanding1996). In contrastthe neighborhood north of the campuslacked strong community leadershipand the university expandedmore rapidly in that direction. Good communicationbetweenthe university and community groupscan providebenefitsfor both parties.For examplethe university canbenefitfrom neighborhoodknowledgeof the real estatemarket. A community group in Pittsburgh'sOaklandareanotified the universityof a run-downbar that might be going on the marketbecausethey preferredto havethe university acquire it ratherthananotherbar owner.The mayorof Pittsburghbelievesin empowering the neighborhoods,and his policies encouragecollaborationbetween large institutions and residentsaffectedby their developmentpatterns.Institutions also can createsomegoodwill with the neighborhoodby providing grants for youth programs,workforce training, and facade improvements. The University of PittsburghMedical Center,for example,allocates$100,000 annually to fund a residential facade improvementprogram for the areas surroundingits main medical campus. University-communityrelationsandthe developmentof trusting andconsistentrelationshipswith residentsandneighborhoodorganizationstaketime. Resentmentgeneratedfrom pastwrongscan linger for a long time, and one controversialact by a university can eraseyearsof progress.

UNIVERSITY REAL ESTATE INVESTMENT PRACTICES 213

Conclusions

This chapteris basedon the premisethat four key factors influencethe real estateacquisition and developmentpracticesof universities. Case studies illustrate the importanceof the motivation for investment,characteristicsof the physicalenvironmentsurroundingthe campus,degreeof policy oversight facing the university, and leadershipstyles and vision of university and civic officials in shapingthe developmentprocess.Specifically they affect the nature of the decision-makingprocess,type of projects undertaken,financing mechanismsemployed,and the dynamicsof university-communityrelations. Motivation for development-thatis, whetherto addressneedsbrought by growth or decline-clearlydeterminesthe type of projectsthat universities undertake.The universitiesexperiencinggrowth in studentenrollment tendedto focus on classroom,office, research,athletic, and studenthousing facilities, whereasthe one institution motivatedby declining enrollmentand the needto stabilizeits neighborhoodconcentratedon residentialand commercial development.The casestudiesalso demonstratethe impact of motivation on university-communityrelations.Universitiesundergoingexpansion must contendwith neighbors'fears of encroachment,which addstensionto university-communityrelations. MarquetteUniversity had to addressconcerns about gentrification, but generally had the support of neighborhood residents.Similarly someresidentsand stakeholdersaroundWayne Stateare wary of the university's activities, but supportthe overall goal of bringing more peopleto the neighborhoodto createa more vital district. The implications of motivation on decision making and financing may not be as immediately obvious, but are nonethelessimportant. The parties involved in decisionmaking tendedto vary in accordancewith the motivation for specific projects. For instance,universitieswere more likely to involve outsidersin the decision-makingprocesswhen planning for the developmentof residentialor commercialunits than when planningfor academic facilities. MarquetteUniversity servesas an exampleof how motivation can have implications for financing. Becausethe project benefitedthe public, the city allowedfor tax-incrementfinancing, andMarquettewas able to leveragefunding from local companiesand private donors. The degreeof policy oversightvaried considerablyamongthe five universitiesstudied.Marquette,Wayne State,andthe University of Pittsburgh were guidedprimarily by internal policies, whereasThe University of Arizonaand PortlandStatewere subjectto policies adoptedby statewidegoverning bodies. The most significant impacts of policy oversight were on the decision-makingprocessandchoiceof financing. Universitieswith strict oversightfaced lengthy approvalprocessesand were often requiredto seek

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approvalat variousphasesof the project and obtain authorizationfrom multiple parties,including both administrativeandlegislativebodies.The ability to draw upon various funding sourcesalso dependedupon the policies that governedthe institutions. For examplethe bondingcapacityof The University of Arizona and PortlandStatewas determinednot by the bond market but by statewidebodiesgoverningthe institutions. Finally, policy oversight can playarole in university-communityrelations.For examplethe planning boundariesfor The University of Arizona, adoptedby the ABOR on behalf of the university, were intendedto alleviatetensionswith residentsand businessownersin the surroundingneighborhoodby providing greatercertainty aboutthe university'sacquisitionplans. The physical environmentof universitiescan provide both opportunities and constraintsfor the developmentprocess.The types of projectsthat universitiesare able to developdependin largepart on the availability of land in and around the campus.Wayne State hasbeen able to take advantageof underutilizedpropertiesin the surroundingneighborhoodsto supportits development agenda.In contrastThe University of Arizona strugglesto assembleland in its predominatelyresidentialarea.The University of Pittsburgh was forced to demolishits football stadiumin orderto build an eventscenter becauselarge plots of land are scarcein its neighborhood.The physicalenvironment also has a critical impact on university-communityrelations. Universitieslocatedin residentialareas,such as The University of Arizona, will likely experiencegreaterdifficulty in establishingpositive universitycommunityrelations.In this respect,the physicalenvironmentmay also affect the decision-makingprocess.The lengthof time requiredto obtainproject approvalandthe partiesinvolved in decisionmaking will often vary depending on how the project is perceivedto impact the neighborhood. The importanceof leadershipin shapingdevelopmentagendaswas evident for eachof the universitiesstudied.The specific projectsthat were developed dependedon motivation, but they alsoreflectedthe broadervision of the institutions' leaders.For most of the universitiesstudied, developmentpriorities changedsubstantiallywith the introductionof a new administration.The role of leadershipin shapinguniversity-communityrelations was also apparent, dependingon how leadersperceivedthe role of the university in the community. Leadershipcan also affect the decision-makingprocessby determining the inclusivity or exclusivity of the process,and it can have an influence on projectfinancingby encouragingcreativestrategiesratherthanrelying on more traditional financing mechanisms.Furthermore,charismaticleadersmay be more effective in attractingfunding from outsidesources. Examining university real estateinvestmentactivities through this framework revealsimportantconnectionsthat affectthe acquisitionanddevelopment

UNIVERSIlY REAL ESTATE INVESTMENT PRACflCES 215

process.For exampleconsiderationof a university'smotivationfor development leads to thoughtsabout university-communityrelations. Some would arguethat universitieshavean obligationto servethosein surroundingcommunities, particularly when locatedin low-income neighborhoods.But the questioncanbe raisedas to whethera university canmeetboth its own needs andthe needsof the largercommunity.This study also drew attentionto how characteristicsof the physical environmentof universitiesfacilitate or limit developmentand, in part, determinethe amountof controversythat accompaniesthe developmentprocess.A review of policies governingreal estate acquisitionand developmentrevealedthat universitiesoften adapttheir approachesto circumventrestrictions.Somewould credit universitieswith developing creativefinancing strategies,while others might be concernedthat they are engagingin riskier ventures.The importanceof effective leadership was apparentin all aspectsof the developmentprocess,but especiallywith respectto university-communityrelations.Leaderswho perceivedthe university andmembersof the largercommunityas civic partnerswerebetterableto establishpositive relationshipswith thoseoutsidethe university and more adequatelyaddressconcernsinvolving the institution's development activities. Universitiesare key playersin the physicaldevelopmentof their communities, and their actionshaveimportantimplications for the economicwellbeing of neighborhoods,cities, andregions.It is importantto be awareof the factors that affect the developmentprocessand understandhow they shape what universitiesare willing and able to do.

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Appendix 11.1 The University of Arizona Jaime Gutierrez AssistantVice President,Office of Community Relations The University of Arizona 88 N. Euclid Avenue Tucson,AZ 85721-0158 Interview: March 11,2002 David Harris AssistantExecutiveDirector for FinancialAffairs and Capital Resources Arizona Board of Regents 2020 North CentralAvenue, Suite 230 Phoenix,AZ 85004 Interview: March 14,2002

Charles Poster AssociateProfessor College of Architecture,Planning & LandscapeArchitecture Director, Community Planning & DesignWorkshop Roy P. DrachmanInstitute The University of Arizona 819 EastFirst Street Tucson,AZ 85721-0483 Interview: March 11,2002

Joel Valdez SeniorVice Presidentfor BusinessAffairs The University of Arizona 1401 E. University Boulevard Tucson,AZ 85721-0066 Mark Homan and JosephEsposito Interview: March 11, 2002 Rincon Heights Neighborhood Association Mercy Valencia 1619 E. 8th Street Director, SpaceManagement Tucson,AZ 85719-5518 The University of Arizona Interview: March 12, 2002 800 E. University Boulevard, Melodie Peters Rincon Heights Neighborhood Association 1416 E. 10th Street Tucson,AZ 85719-5809 Interview: March 12,2002

Suite 326 Tucson,AZ 85721 Interview: March 12, 2002

Bruce Wright AssociateVice President,Economic Development Chuck Pettis Chief OperatingOfficer, University Real EstateConsultant of Arizona Scienceand The Universityof ArizonaFoundation TechnologyPark 1111 N. CherryAvenue P.O. Box 210458 Tucson,AZ 85721-0109 Tucson,AZ 85721-9007 Interview: March 11, 2002 Interview: March 13, 2002

UNIVERSITY REAL ESTATE INVESTMENT PRACflCES 2 t 7

PortlandStateUniversity

Gary Aas Chief OperatingOfficer College HousingNorthwest 2121 SW Broadway,Suite 111 Portland,OR 97201 Interview: August 14, 2002 SteveDotterer Principal Planner City of PortlandBureauof Planning 1900 SW Fourth Street,Suite 4100 Portland,OR 97201 Interview: August 13, 2002 AbrahamFarkas Director of Development PortlandDevelopmentCommission 1900 SW FourthAvenue, Suite7000 Portland,OR 97201 Interview: August 13, 2002 SusanHartnett ProjectManager City of PortlandBureauof Planning 1900 SW Fourth Street,Suite4100 Portland,OR 97201 Interview: August 13, 2002

Jay Kenton Vice Presidentfor Financeand Administration PortlandStateUniversity 207 ExtendedStudiesBuilding Portland,OR 97207-0751 Interview: August 15, 2002 Daniel Potter Vice President CollegeHousingNorthwest 2121 SW Broadway,Suite 111 Portland,OR 97201 Interview: August 14, 2002 Erika Silver Vice Chair Downtown CommunityAssociation P.O. Box 1534 Portland,OR 97207 Interview: August 14, 2002 NohadToulan Dean,Collegeof Urban and Public Affairs PortlandStateUniversity POB 751 Portland,OR 97207-0751 Interview: August 15, 2002

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MarquetteUniversity

SteveCottingham AssistantVice Presidentand Counsel Office of the GeneralCounsel MarquetteUniversity 615 North 11th Street O'HaraHall, Rm. 015 Interview: April 2, 2002

june Moberly ExecutiveDirector AvenuesWestAssociation 2040W. WisconsinAvenue,Suite778 Milwaukee, WI 53233 Interview: April 1, 2002

jamesSankovitz

Vice PresidentGovernmentRelations (1987-1996) CampusCircle Project(1991-1994) MarquetteUniversity 4057 N. ProspectStreet ExecutiveDirector Milwaukee, WI 53211-2121 Village Adult Services,Inc. Interview: April 1,2002 Aurora Health Care 336 W. Walnut Street Allison Semandel Milwaukee, WI 53212 AssociatePlanner Interview: April 1, 2002 Departmentof City Development City of Milwaukee TheoLipscomb Directorof CommunityDevelopment 809 North Broadway West End DevelopmentCorporation Milwaukee, WI 53202 Interview: April 1,2002 3034 W. WisconsinAvenue Milwaukee, WI 53208 Carol Winkel Interview: April 2, 2002 Director of CommunityRelations MarquetteUniversity PatrickLeSage Director, Campus Circle Project HolthusenHall, 419 P.O. Box 1881 (1992-1995) Milwaukee, WI 53201-5936 Principal, PettiboneGroup LLC Interview: April 1, 2002 126 N. JeffersonStreet Milwaukee, WI 53202-6120 Interview: April 2, 2002

juli Kaufmann

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WayneStateUniversity

MarshaBruhn Director City PlanningCommission ColemanA. Young Municipal Center 2 WoodwardAvenue, Suite 202 Detroit, MI 48226 Interview: August 20, 2002

Jim Sears AssistantVice President Facilities Planningand Management Wayne StateUniversity 5454 CassAvenue Detroit, MI 48202 Interview: August 20, 2002

Michael Solaka AndreaZack Burg AssistantDirector Design & ConstructionServices Wayne StateUniversity 5454 CassAvenue Detroit, MI 48202 Interview: August 20, 2002

SueMosey President University Cultural Center Association 4735 CassAvenue Detroit, MI48201 Interview: August 19, 2002

President New CenterArea Council, Inc. 3011 West GrandBoulevard Detroit, MI 48202 Interview: August 20, 2002

Carol Wells Director CommunityAffairs Wayne StateUniversity 3006 Faculty Administration Building Detroit, MI 48202 Interview: August 20, 2002

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University of Pittsburgh

David Blenk ExecutiveDirector OaklandPlanningand Development Corporation 235 Atwood Street Pittsburgh,PA 15213 Interview: November29, 2001 Sabina Deitrick AssociateProfessor GraduateSchoolof Public and InternationalAffairs University of Pittsburgh 3E25 PosvarHall Pittsburgh,PA 15260 Interview: November16, 2001 Richard Florida Professorof RegionalEconomic Development Heinz Schoolof Public Policy CarnegieMellon University 4800 ForbesAvenue,Room 2508 Pittsburgh,PA 15213 Interview: November15, 2001

Scarlet Morgan ExecutiveDirector Breachmenders Ministries 200 RobinsonStreet Pittsburgh,PA 15213 Interview: November29,2001 Arthur G. Ramicone Vice ChancellorBudgetand Controller University of Pittsburgh 1817 Cathedralof Learning Pittsburgh,PA 15260 Interview: November30,2001 Eli Shorak AssociateVice Chancellorfor Business University of Pittsburgh 124 Cathedralof Learning Pittsburgh,PA 15260 Interview: November16, 2001

Tracy Soska Co-Director,CommunityOutreach PartnershipCenter Director of Continuing Professional Martha Garvey Specialties,Schoolof SocialWork Presidentof the Board University of Pittsburgh OaklandPlanningand Development 2025 Cathedralof Learning Corporation Pittsburgh,PA 15260 235 Atwood Street Interview: December4,2001 Pittsburgh,PA 15213 John Wilds Interview: November29,2001 Director SusanGolomb Community and Governmental PlanningDirector Relations City of Pittsburgh University of Pittsburgh 200 RossStreet 4227 Fifth Avenue Pittsburgh,PA 15219 Pittsburgh,PA 15260 Interview: November30, 2001 Interview: November30, 2001

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References Arizona Boardof Regents.1983.ArizonaBoardofRegentspolicy manual.Available at www.abor.asu.edu/1_the_regents/policymanual/index.html. Brick, M. 2002. Big deals on campus:Special-purposeentities. New York Times, July: Section3, 6. Bureauof Planning,City of Portland,Oregon. 1988. Central City Plan, August. Carlson,J. A. 1994. Neighborhoodresurrection:MarquetteUniversity tacklesinnercity redevelopmentin Milwaukee. ChicagoTribune, April 24. Farbstein,J., and R. Wener. 1996. Building coalitionsfor urban excellence.Cambridge,MA: BrunerFoundation. Gallinger, J. 2001. There'ssomethingaboutOakland:And Pitt projectsdrive development. Pittsburgh BusinessTimes, March 9. Available at http://pittsburgh .bizjoumals.comlpittsburghlstoriesI2001/03/12/focus5.html. Memorandumof UnderstandingBetweenThe University of Arizona,RinconHeights NeighborhoodAssociation, and City of Tucson. 1996. Available at htttp:// w3.arizona.edu/-cfp/adopted_campus_plans/lrdvp_plans/scap/mou.htm. OregonSecretaryof State.n.d. Oregonadministrativerules, Oregon University System, Division 50, real property,facility, and campusplanning. Available at http:// arcweb.sos. state.or.us/rules/OARS _500/0AR_580/580_050.html. PortlandStateUniversity District Partnershipfor Community Development.1993. Visionfor a universitydistrict: a working concept. Schacknew,B. 1999. Couplegives $10 million to Pitt. PittsburghPost-Gazette,June 23. Available at www.post-gazette.comlregionstateI19990623pitt1.asp/. Snyder,T., C. Hoffman, andC. Geddes.1998.U.S. Departmentof Education,National Centerfor EducationStatistics.Statecomparisonsof educationstatistics: 196970 to 1996-97 (November). Available at http://nces.ed.gov/pubsearch/ pubsinfo.asp?pubid=98018/. Tijerina, E. S. 1994.Housingwork, tot lot plannedfor WestSide.MilwaukeeJournal, August 17: B1. The University of Arizona. 1988. The University ofArizona comprehensivecampus plan,April. ---.2000.FY2002-2005capital improvementplan bienniumupdate. WayneStateUniversity. 2001. 2020 Campusmasterplan.

12 Leasing for Profit and Control The Case of Victoria University at the University of Toronto Larry R. Kurtz

How doesa small arts and theologicaluniversity come to be a major landowner and commerciallandlord in the middle of Toronto, Canada'slargest city and Ontario'sprovincial capital?What doesit take to turn university propertyinto endowmentreal estate?And what impact doesthe university as developerhave on its surroundingcommunity?Someanswersto these questionscanbe found by analyzingthreedifferent real estateinitiatives of Victoria University. The projectshave two commonelements:eachrepresentsa decision to use property to generaterevenueto supportthe academy ratherthanfor facilities of the university; andeachrepresentsa decision to generaterevenueby leasinguniversity property ratherthan by selling it and converting the proceedsto other assetscommonly found in endowment portfolios. By way of generalbackground,Victoria was establishedby pioneering EnglishMethodistsin 1837 in the small town of Cobourgeastof Toronto. In 1892Victoria soughtto improveits prospectsby moving westandfederating with the largerUniversity of Toronto (U of T) on a block of land leasedfrom it on the edgeof the Queen'sPark, then at the outskirtsof Toronto (seeMap 12.1). Federationmeantan initial pooling and later almost total integration of academicresources,while maintaining independentcorporatefinancial and businessstructures.The first academicbuilding on Victoria's leasehold block, dating from 1892,is now surroundedby other academicand residential facilities addedsince 1908. The last readily buildable site on this block wasusedto constructa SOO-seattheaterandsmall office complexthat opened in 2001. Victoria today has about 110 faculty fellows and about 3,800 fulltime students(of whom some77Slive on campus). 222

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Less than a decadeafter the move to Toronto, and severalyears before doing any more building, Victoria's Board of Regentsbeganacquiringadditional propertiesto the north andeast,someon a freeholdbasisandotherson a leaseholdbasis.Theseproperties,acquiredfrom U of T and small private landholdersas opportunityoffered andin a few casesby gifts or trade,cover an areaslightly larger than the original leaseholdblock. The university itself

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usedall of them at one time for office space,studentand family housing,service buildings, and so forth. About half of the actual land on this north block still is devotedto Victoria facilities. The balance,for now, is viewedasendowment real estateservingthe university'spurposesby generatingincome. The changein thinking about how Victoria's property holdings could or should be used evolved gradually. BecauseVictoria is a church-affiliated institution, it has no direct accessto the provincial governmentgrant funding, which is the financial mainstayof mostOntario universities.Thus it has had to look to private sourcesof supportto cover a large proportion of its ongoing operatingand capital expenses.In this context it is not surprising that Victoria's boardfrequently turnedits thoughtsto the possibleexploitation of property assetsto bolster the institution's financial position, especially asToronto'seconomyboomed,commercialdevelopmentcrowdedthe edgesof the campus,and propertyvaluesescalateddramatically.

CaseStudy 1 On July 1, 1960,Victoria executeda 100-yearland leasewith private interests to allow the building of a mixed-usecommercial/residentialproject on Toronto'sBloor StreetWest, then developinga reputationas the city's premier shoppingdistrict. The site with a streetfrontageof 480 feet and a depth of 150 feet had been clearedof buildings. The new project was leasedto yield a rent at 6 percentof its marketvaluefor an initial term of thirty years, with rent thereafterto be revisitedevery twenty yearsas a 6 percentfunction of marketvalue on the renewaldates.! This land, originally ownedby U of T, was leasedin the 1890sto private individuals who built themselvessubstantialsingle-family houses.Starting in the 1920sVictoria beganacquiringthe leaseholdrights to individual properties in this block, and by the late 1940shad gainedcontrol of them all. In 1949Victoria boughtfreeholdtitle from U of T for $240,000,with a proviso in the title deedsthat the landswould be usedfor educationalpurposesonly; if Victoria later no longer wished to use them for such purposes,U of T would repurchasethe landsat the 1949 saleprice. No long-termplan for this major parcelof land appearsto haveinformed the decisionsto acquireit on a piecemealleaseholdbasis,or to negotiatefor its conversionto freehold in 1949. If there had been any plan to exploit its commercialpotential, it is unlikely that Victoria would have agreedto the restrictive covenantin the 1949 deed.Yet just a decadelater the wheelswere in motion to do a major commercialleaseof this property. As early as 1950therearereferencesin boardproceedingsto the possibility of exploitingthis parcelcommercially.2Unsolicitedexpressionsof interest from

VIcrORlA UNIVERSITY AT THE UNIVERSITY OF TORONTO

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privatepartiesto buy or leaseprovidedstimulusto internaldiscussionsabout how the property might best serve the university's goals. Board members closestto thesediscussionswere well awareof the restrictive covenantsin the 1949title deeds,andin early 1953 setaboutgetting the U ofT to agreeto their removal. After an initial rebuff the U of T agreedin 1956, after what appearsto have been some informal arm-twisting by Ontario's provincial premierof the day, to issuea quitclaim deedin this regard,openingthe door to eventualcommercialuse.3 In the interim the board'sFinanceand PropertyCommitteein 1955 commissioneda consultingstudy from a prominentlocal realtor who, after consideringvariousalternativesfor useof the lands,concludedthatthe immediate annualincomewas likely to be greaterfrom leasingthan selling the land and investingthe fundsin other assets,noting that leasingwould take advantage of increasingcapital values over time and act as an inflation hedge.4 Just a month after receiving this consulting report the board resolvedto explore private developmentof the property. Their explorations,despitesuccessin removing the restrictive covenantsin 1956, proceededslowly, but in 1959 action on this project finally went into high gear. Since commercialuse of the Bloor lands would require a zoning change from the prevailing residentialand institutional permissionsthen in effect, the chairmanof the boardin June 1959 directedstaff to work on a rezoning to allow the samecommercialusesas the lands acrossthe streetand down the block to the east.Within a monthVictoria's solicitors had madethe requisite rezoningapplicationto the City of Toronto'sCommitteeon Buildings and Development. An outsidevaluationreportdatedSeptember30, 1959,recommendedthat the propertybe listed for leaseat "a rental basedon $35 sq.ft. on the 72,000 sq.ft., which producesa valueof $2,520,000and at 6% representsa net rental of $151,200."The report went on to say "an aggressivecampaignof canvassingand advertisingin Toronto and other cities should be madeto producea leaseor leases."5The boardsoonthereafterapproveda recommendation of its Financeand PropertyCommitteeto take immediatestepsto leasethe property on the terms recommended. Plansto use theselands as endowmentreal estatewere proceedingeven asVictoria waslaying ambitiousplansfor new facilities of its own. A women's residencewas startedbefore the Bloor leaseswere assured.A new library and a new administrativeand faculty office building would follow within a few years.All of theseprojects would shrink the remaining supply of land for future buildings. Nonetheless,in thosemore deferentialtimes there appearsto havebeenno significantoppositionfrom students,faculty, or alumni to the board'splanningfor theselandsto generatecommercialrevenue.6 The

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availability of other sites to accommodateplanneduniversity facilities and the prospectof new revenuefrom a land leaseto help pay for them no doubt helpedin this regard.Nearby propertyownerswere evidently happy to see Victoria's stretchof Bloor Streetdevelopcommercially.The only recorded opposition to the rezoning applicationcamefrom the city's planning commissionerwho was overruledat the political level. On December2, 1959, Toronto'sGlobe and Mail reportedas follows: Undera zoningchangeapprovedyesterdayby theTorontoPlanningBoard, a 25-storyoffice building with more than twice the floor spaceat the new city hall could be built on the southsideof Bloor St. eastof Queen'sPark. The boardapproveda requestfrom Victoria (University) to rezonea strip of its propertyto C IV 4, the highestcommercialdensityallowed,despitea warningfrom PlanningCommissionerM.V. Lawsonthat therewas no justification for rezoningto C IV 4. (He) said that the high densityrequested by the university appearedto be out of proportionto possibledemand. By the time of the board'smeetingof April 21, 1960, an outsideconsulting report was in handrecommendinga leaseto a consortiumof threelocal businessmen,one of whom was the owner of a small hotel nearby.?While therewere threeotherbidders,noneapparentlywas preparedto pay the land rent requested.Even beforethe meeting'sformal approvalto proceed,however, the lesseeswere working with Victoria to secureanotherzoning variance,this time to permit a mixed-usecommercial/residentialproject on the land that was now officially rezonedfor commercialusesonly. The lessees had concludedthat the highest and best use would be a mixed-useproject with a substantialresidentialrental component.The prevailing orthodoxyof local plannersat the time did not welcome such mixed uses (i.e., people living above storesor in commercialareas).Approval for a secondzoning changewas nonethelessgiven by the Ontario Municipal Boardson June 10, 1960, even though this variance also was opposedby the city's planning commissioner,who gaveevidenceat the hearingsto the effect that he did not believea mixed residentiaVcommercial developmentwaspracticalin Toronto, andthat existingbylawsin any casehadno provisionsto coverthis situation. Two buildings were later constructed:a twelve-story office tower with ground-floorretail space;and a mixed-usebuilding with three floors of office and high-endretail space(Chanel,Prada,and Max Mara are amongthe current tenants)and elevenfloors of luxury rental apartments.The latter is now listed as a local heritagebuilding preciselybecauseit blazeda trail for other mixed-usecommercial/residentialdevelopmentsin modem Toronto, bringing peopleto live in high-densitycommercialareas.

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Notions aboutwhat constitutesgood urbanplanningand zoning bylaws to safeguardthe public interestobviously evolveover time. While the decision to seekthis additionalvariancewasdriven by the lessees'marketsense aboutwhat would maximize return ratherthan any university sensibilities aboutprogressiveurbanplanning,Victoria's willingness to cooperatewith the lesseesto challengethe conventionalplanning wisdom of the day had an entirely salutaryinfluenceon the direction of future urbandevelopment in Toronto. Since this was the fIrst of Victoria's commercialreal estateventuresand now hasa track recordof more thanfour decades,it is worth taking stockof the decisionto leaseratherthensell. Nothing in the statutesby which Victoria is governedpreventsit from selling land, but there is nothing in the formal recordsof the board or its committeesindicating there was ever a direct or extendeddebateon this leaseversussalequestion,which at severalpoints in the 1950sappearedto be entirely open.Professionaladvicegiven to the board in 1955 did suggestthat leasingwas likely to yield more revenuethan selling. The consultantsassumedthat the probablealternativeinvestmentswould be heavily tilted to fIxed-incomesecuritiesthen typical of university endowments (long-term bond and mortgagerates at the time were in the 5 to 6 percentrange). We know that continuedownershipof the land assetwas seento havethe additional advantageof being a hedgeagainstinflation; that pursuit of any schemeto sell the land wouldlikely havemet someactive oppositionin the board9 ; thatVictoria decisionmakerswere well awarethat othercommercial and high-densityresidentialrental projects were then being undertakenon leasedland sitesin Toronto10; and that the potentialusesof the site and consequentlyits marketvalue would not havebeenmaterially affectedby offering it only on a leaseholdbasis. Was leasingthe betterchoice?Long before the fIrst thirty-year term was up, and with inflation soaringin the late 1970sand early 1980s,many wondered. Cumulativeground rent paid up to 1990 was just $4.5 million. But in 1990, rents as a 6 when the market value of the lands was reassessed percentfunction of marketvalue for the next twenty-yeartermjumpedfrom $151,000to $3.653million peryear. Securingthis increaserequireda lengthy arbitration followed by court proceedingswhen the tenantslaunched(ultimately unsuccessful)legal appealsagainstthe arbitrators'fIndings. After the rent increasein 1990, the rent over forty-one years (through 2001) totaled $44.7 million. If the land had beensold at 1960 marketvalue and the proceedsinvested in the Toronto StockExchange(TSE) 300 Index, usedhereas a proxy for the most aggressivealternativeinvestmentthat might then havebeenconsidered

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by a Canadianendowmentfund, the cumulative payout would have been some $9.2 million over thirty years and $17.5 million over the forty-one years to 2001 (i.e., assumingthe capital in the initial index purchasehad beenheld whole againstinflation as measuredby the consumerprice index and total index returnsover this time were achievedat a constantor annualized rate). We cannotknow the future TSE 300 Index return, but the lease providesthat the rent going forward in the next renewalperiodcannotbe less than what is now being paid, so there is downsideprotection againstthe possibility of decliningrealty values.Becauseland rent underthe leaseterms cannotbe subordinatedto any other claims on the propertyand nonpayment triggers default, the currentrent is virtually guaranteedinto the future. Exceptfor the time and cost of the proceedingsto resetrents from 1990, this investmentto date has requiredlittle effort by Victoria as lessor, apart from scrutinyof the lessees'periodicrenovationplans,mortgagerefinancings, and changesin ownershipstructureover time. Where this scrutiny has requiredoutsidelegal or otherprofessionalhelp, the lesseeshavepaidthe costs. The buildings on site and their tenantsform part of a varied, urbanebackdrop to the campuswith almostno friction betweentown and gown. From hindsight, we would write land leasesdifferently today with much more frequent rent review dates,perhapsat five- or ten-yearintervals; in 1960commercialandresidentialmortgageswith thirty-yearfixed termswere still commonplace. Nonetheless the leasesstruck in 1960 are widely seenas far-sightedinvestments(especiallyafter the stockmarketmeltdownof 2002), producing excellentreturns and giving a future generationa chanceto rethink how this property abutting the campuscan best servethe university. The relative illiquidity of the land assethas removedthat temptationto dip into capital in difficult times, which can occur when highly liquid papersecurities are the assetat hand.

CaseStudy 2 With one successfulforay into commercialproperty developmentbehind them,Victoria's boardspentthe next two decadesacquiringadditionalsmall propertyholdings nearbyand, at intervals,consideringmore unsolicitedoffers to developuniversity land and possiblerealty initiatives of their own to increaserevenue.The secondactual developmentinitiative came in 1979 whenVictoria "inherited" a three-story,neoclassicacademicbuilding of some 50,000squarefeet, containinga fadedgymnasium,classrooms,kitchen/laboratories,faculty offices, and a disused swimmingpool under its rear courtyard. The building was locatedat a prominentintersectionjust west of the Bloor Streetlands leasedin 1960 and borderedby otherVictoria properties

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to its south. Built in 1908 as a School of HouseholdSciencefor U of T, which owned the land under it, the building was a gift of an heiressof the former Masseyagriculturalmachineryempire.The donor, whosefamily also had beenmajor benefactorsto Victoria, specifiedthat if the school should everbe closed,U of T would havethe option of "purchasing"the building by making a cashpaymentto Victoria approximatingits then market value, or selling the land underit to Victoria (also at marketvalue). NeitherVictoria nor U of T had any practicalacademicusefor the structure at that time. From the outsetof negotiationsabout the eventualfate of the propertytherewere differencesaboutthe respectivemarketvaluesof the land and the building. Victoria was initially reluctantto contemplatebuying the land becauseof the cashoutlay requiredand consideredsimply accepting cashfor its claim to the building. U ofT wantedto pursuethe saleof both land andbuilding to a third party, giving Victoria that portion of the proceeds attributableto the building's value. The terms of the donor's bequesthad spelledout arbitrationprovisionsin the eventU of T andVictoria could not themselvesagreeon values.Perhapsfearing that a final cashpayoutfor the building would yield lessthan hoped,Victoria proposedthat the two institutions jointly find a tenant,leasethe building for a periodof fifteen to twentyfive yearsand split the net revenuein order to keeplong-termcontrol of the property in university hands.When U of T's hope for a quick third-party offer to buy the propertydid not materializeandthey turneddown Victoria's proposalfor a joint leaseholdventure,Victoria decidedto buy the land and try to finance the acquisition by leasing the building itself. Although the building had style and an eminently commerciallocation, it was zonedfor institutional usesonly. While negotiationsover land price draggedon, a governmentagencydecidedto rent mostof the spacein the building. Victoria then undertookmajor renovationsto adapt the spacefor institutional office uses and the tenant moved in on February1, 1981.Another leaseholdfollowed for the balance of the space,and a secondgovernmenttenant took occupancyon April 1, 1982.The cost ofleaseholdimprovementswas $2.6 million; coupledwith a land purchaseprice of $1.7 million (finally agreedin a 1982 settlement), Victoria's out-of-pocket investment to gain control ofthe propertyandmake improvementstotaledsome$4.3 million. Part of the agreementon price was that U of T, in the eventthe propertywere everto be sold by Victoria, would receive 50 percentof any increasein land value attributableto any subsequentrezoningpermitting additional density on the site. By the early 1990s the smaller of the two governmentagencieshad outgrown its premisesand gave notice to vacate, at a time when local office vacancyrateswere approaching15 percentandrentshad plummeted.

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Fortunatelythe spacevacatedcomprisedonly part of the overall leaseable spacein the building and it had direct accessfrom Bloor Street, by now Toronto'smost fashionableshoppingprecinct. Nonethelessthe institutional zoning on the property and the lack of demandfor office spaceat the time meantthat the premisesvacatedwould sit idle for almost two yearsbefore beingleasedagainas commercialretail space.The institutionalzoningin the university area did allow for a limited range of commercialuses, such as banks,retail stores,or bookshopsseenas serving the campuscommunity, providedsuchpremisesdid not occupymore than 5,000squarefeet of space in the building. To lease6,500squarefeet of vacantmain-floor spacefor one of the permittedcommercialusesrequireda zoning variancefrom Toronto's Committeeof Adjustment.City planners,recognizingthat long-termpreservation of heritagebuildings may require someflexibility in their uses,were helpful in securingthe varianceneeded.II Negotiationsto relet the vacantspaceas commercialpremisesproceeded in tandemwith the zoningvarianceprocesses. The new tenantwould be Club Monaco,a trendsettingandgrowingfashionretailerwith morethan 100stores in Canada,the United States,andthe FarEast.The companywantedspacein the neoclassic buildingwith its high-profile locationto createa Torontoflagship store.They acceptedthe spaceon an as-isbasisand agreedto make all leaseholdimprovementsandpay Victoria marketratesfor retail space,which were significantly higher than local office rents. Their renovationsopened up a clutteredfloor plan, reclaimedthe disusedswimmingpool asstorespace, and won them a local heritageawardfor "sensitiveinsertion of a retail store into a heritagestructure"12 In a secondround of zoning negotiationswith city officials a few years later, Victoria was successfulin getting commercialzoning permissionsfor 13 for the entirebuilding by signing a formal heritage preservation agreement the building'sexteriorfor a twenty-yearperiod, andagreeingthat any further retail expansionin the building take its accessfrom Bloor, the commercial streetwhere the building'S secondaryentrancewas then located.The main entrancearoundthe comeris directly oppositeone of Canada'smostimportant museumsand close to other institutions such as the provincial parliamentat Queen'sPark.This newly won commercialdesignationfor the entire building then allowed Victoria's remaining governmenttenantto surrender some office spacein a time of public-sectorcost cutting. That spacewas simultaneouslytaken up by Club Monaco (now a wholly owned subsidiary of Ralph Lauren,Inc.); the firm currently rentsall threefloors and basement of the building's north wing (about40 percentof the building). In this secondventureinto using university property as endowmentreal estate,Victoria had two options: buy the land on opportunity and leasethe

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building to pay the cost of acquisition and improvementsin order to gain control of a key comerof a majorcity block ownedalmostentirelyby Victoria, or seethe propertysold into otherhandsby U of T, albeit with Victoria sharing in the proceeds.While the move to close the Schoolof HouseholdScience had generatedsome controversywithin U of T, particularly among alumnaeof its programs,there was no oppositionwithin the Victoria community to treating it as endowmentreal estatebecausethe property had not previouslybelongedto or beenusedby Victoria. In this caseVictoria is the landlord and property managerto office and retail tenants,with direct exposureto their financial healthandmarketsuccess.Suchexposureis mitigatedby the quality of the governmenttenant's covenantand by Club Monaco'sagreementto rent on an as-is basis and convert outdatedinstitutional spaceto first-class retail spaceat its own expense.In a worst-casescenario,if the retail tenantdefaultsthe leasehold improvementsremainfor the landlord'sbenefit; the risk of default is itself minimized becausethe retail tenanthas a major immovableinvestmentin the building. In private handsthis property would long sincehavebeenunderpressure for higher-densitycommercialredevelopment.Indeedtherehavebeenunsolicited approachesin this regard. Both Victoria and the community benefit from preservationof a low-rise historic building in this particularurbancontext, and the municipality gains property tax revenuesfrom its commercial use, which would not obtain if the property were being useddirectly by the university or other tax-exemptinstitutions. Net annualincomeover the first ten yearsrepresenteda return of between 6 and7 percenton Victoria's original out-of-pocketinvestment.With significantly higher rents today, and with the cost of the original improvements fully amortizedover twenty years,the net annualdollar incomeis now more than 2.5 times that obtainedin the 1980s.Apart from this incomeVictoria has the benefit of knowing that as early as 2006 it could reclaim some 60 percentof the building for its own institutional usesif its nearer-termpriorities suggestsuch a course,and it could reclaim the balanceof the building from Club Monacoin 2015.14 None of the leaseswritten for thesepremises over the yearshas ever exceededtwenty years,even with renewaloptions.

CaseStudy 3 Over several decades Victoria consolidatedits hold on a sizablerectangular block at the northeastfringe of its campusboundedby threecity streetsand a Victoria playing field. On part of that block satan unsightly (but profitable) surfaceparking lot. The larger part of the block was occupiedby a seriesof

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aging turn-of-the-centurytownhousesand a pair of low-gradeservicebuildings. Victoria's board decidedin 1987 that thesepropertieswere surplusto any currentinstitutional needs.They executedan agreementto leasethe site to a developer(selectedin an invitational competition)and set about securing zoning amendmentsto permit mixed-usecommercial/residentialdevelopment.The rezoningprocessbecamea messypolitical exercisewhenstudent oppositionto commercialdevelopmentof the lands surfacedafter the agreement to leasehad beensigned.It took more than threeyearsto be resolved, from 1987, when local realty markets were thriving, to early 1991, when they were nearly comatose.IS The developer,who proposedto build a 270room luxury hotel, was given extra time by Victoria to wait out the market downturn in exchangefor removing all conditionson his leaseholddeposit. Ultimately he defaultedwith nothing built, forfeiting a $2 million depositin its entirety. With a partialrecoveryin commercialreal estatein the mid-1990s,Victoria begananew the searchfor a developmentpartnerto take advantageof the marketpotentialof this block. In late January1997a chanceencounterbrought to the door the Toronto partnersof McKinsey and Co. Inc., a prominentinternationalmanagement consultingfirm, looking for a site to build an "office of the future." In a seriesof blue-sky discussionswith their staff and a local architectwho hadpreviousexperienceworking on major universityresearch, college, and library facilities, the McKinsey partnersdeterminedthat they would like somethingthat looked and felt like a collegebuilding, locatedon or adjacentto a university campusif possible.Within little more than six monthsVictoria and McKinsey reachedagreementon major businessterms, approveddesign and developmentdrawings, hired constructionmanagers, and begandemolition of three small structureson site. Excavationand construction work beganin earnestat the end of 1997, and McKinsey moved into its new Toronto offices in June 1999. This time aroundtherewas no seriousoppositionto commercialdevelopment, either inside or outsideVictoria, in part perhapsbecausethe scaleof the building proposedwas much reducedfrom the earlier hotel plans. The new facility is a 60,000-square-foot, modernist,three-storystructurein stone and glasswith teakwindows, a sky-lightedatrium, one level of underground parking, and a walled garden,sited at the easternedgeof a Victoria playing field. The university's board and internal community see this project as a possiblecollege building-in-waiting, and are especiallypleasedwith that prospectgiven severalglowing architecturalreviews and awardsthe building hasreceivedsinceits opening. Designedto McKinsey'sspecifications,the projectwas built by an establishedconstructionmanagement firm undercontractto Victoria, which secured

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constructionand takeoutfinancing from the university'sbanker.McKinsey is leasingthe building for an initial fifteen-year term and is paying annual net rentssufficientto amortizethe entirecapitalandinterestcostof the project over that period.Thereafter,they havethreefive-year renewaloptionsat preset annualnet rents.At the end of thirty years(at the latest),useof the building revertsto Victoria. This third venture in endowmentreal estateraised severalissuesfor Victoria, but the sale/leasedebatefor this site took place long before McKinsey'srepresentatives camecalling. As early as 1986Victoria's board had hired professionalplanning consultantsto do a site-plan study for the commercialpossibilities of this northeastcorner of its landholdings.The consultantssuggestedthat mixed-usedcommercial/residentialuses would probably be the easiestto achievein political and zoning terms, and would likely also maximizethe site'sland value. But to capitalizeon the residential potentialof the site, the possibility of selling a portion of the propertywas to be left open for discussion.This aspectof the report was the only one the boardsawfit to change.After reservationsaboutthe saleoption werevoiced, the boardvotedto deleteany mentionof a possiblesale,evena portion of the site. The consultantshadexplainedthat if any saleof land was entirely ruled out, Victoria might well compromisethe residualland value for up to twothirds of the site's density potential. The reasonfor this had to do with the market'skeen interest in condominiumsites and almost completelack of interestin sites for residentialrental buildings; condominiumscould not at that time be built in Ontario on leasedland. McKinsey's approachdid not require revisiting the possibility of sale, becausethe companyhad no interestin buying the land. The original hope was to craft a land leasein which somedeveloperwould be the actuallessee and would constructfacilities that McKinsey would rent. Victoria was entirely preparedto leaselandfor the sortof building proposed,but the McKinsey project would not require all of the available site-anL-shaped plotabout two-thirds of which bordereda midblock playing field and the remaining third having a valuable corner exposure.McKinsey wanted the midblock part of the site, desirablebecauseit abuttedthe playing field, but in some respectsthe leastinterestingpart of the site from the standpointof having a conventionalcommercialaddress.After considerablediscussionaboutsplitting the parcel into two pieces,Victoria's board agreedin principle to lease the midblock portion and take its chanceson a later redevelopmentof the remaining smaller corner site.16 Negotiationsthen beganwith respectto a suitableland rent formula. MeanwhileMcKinsey'shope of finding a commercialdeveloperto realize its office building stalled,in part at leastbecausethe firm wantedoptions

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for a leaseof up to thirty years,but the ability to leaveafter twelve years,on suitablenotice, if their businessneedschanged.Given the highly particular single-tenantbuilding they hadin mind, the somewhatunusuallocationfor a commercialoffice building, andthe relatively shorttime frame (twelveyears) to which they werepreparedto commit absolutely,no commercialdeveloper appearedready to take on the project. In these circumstancesthe question for Victoria was whether it would itself assumean active developer'srole. From the outsetMcKinsey's covenantto pay rent for at leasttwelve yearslooked very solid to all concerned, including Victoria's and McKinsey's separatebankers,both of whom were preparedto lend Victoria money tofinancethe project,andindeedcompeted to do so. The only significant risk to Victoria appearedto be the possibility that McKinsey might exercisean option to vacateafter twelve years,leaving Victoria with many years of mortgagepaymentsstill to go to pay for the project, and no guaranteeof a replacementtenant. The way out of this dilemmawas a leasein which rent paymentswere in a sensefront-end loaded. McKinsey agreedto pay level annual net rents adequateto amortizethe building fully in just fifteen years,rents that on a square-footbasiswere as high as almost any in the city, and well abovethe going rate for first-class office spacein Victoria's midtown neighborhood when the project was started.If the tenantwere to leaveafter twelve years, Victoria would havejust threeyearsof amortizationpaymentsremainingto be free and clearof any debton the project. Becausenet annualrent payable in the first five-year renewalterm (i.e., after the initial fifteen years)is substantially lower than rent now being paid, there is a considerableincentive built into the leasefor McKinsey to stay on and profit from the front-end loading of rentsin the first fifteen years.Shouldthe tenantnonethelessleave after twelve years,Victoria will have the option of renting to anothercommercial tenant on entirely new terms, or using the building itself. In any eventthreeyearsof uncoveredamortizationpaymentsarea known andmanageableburdenbecauseinterestrateson the borrowedfunds are guaranteed for a fifteen-yearterm. In this casethe tenant has chosento do its own property management, including custodial,maintenance,and groundsservices,and paysmunicipal propertyand businesstaxesdirectly. Now that the projectis up and running, Victoria's ongoingrole as developerand landlordis minimal. The university and local community benefit from an attractivenew midblock public walkway separatingthe building from the adjacentplaying field. This developmentproject requiredVictoria to take a long-term view on financial return becausethe tenant'srent for fifteen yearsis devotedentirely to amortizingthe costof the building; only whenthis ambitiousamortization

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scheduleis endedwill the university enjoy the benefit of rent that it cantreat as disposableincome. This aspectof the leasearrangementwas, however, seenas a way of mitigating significant risk for a future generationin the eventthe tenantexercisesits option to leaveafter twelve years;it would have beenpossibleto extendthe amortizationterm to twenty or twenty-five years, for example,and in doing so take someportion of the currentrental income streamas a land rent from the outsetfor immediateoperationalpriorities. Conclusion The threecasesdetailedabovesuggestthat Victoria hascreated,in opportunistic fashion, a sizableendowmentreal estateportfolio from propertiesit acquiredmore by acquisitive,expansionistinstinct than any consciousdecision to invest in real estateper se. Propertiesacquiredto securepossible future needs,or simply to ensurecontrol of developmenton Victoria's periphery, have themselvesacquiredthe statusof a quasi-sacredtrust in the university'sinternal mythology. This makesany discussionsof sale fraught with emotion in a way that seldomobtainsin discussionsaboutthe relative merits of holding or selling assetsin a securitiesendowmentportfolio. Fortunatelyfor Victoria its center-citylocationhasallowedit to tum property assetsto financial advantageby leasing;salewas not requiredto realize respectableinvestmentreturns. Ownershipallows the university to control what gets built at the edgesof its campus,and if future academicpriorities suggestphysicalexpansionit will have someoptions at hand. Finally, the income streamfrom Victoria's endowmentreal estate,given the natureof the leaseholdsin it, has cometo be recognizedas having many of the characteristicsof yields from a fixed-incomeportfolio. This recognition in tum hasrecently led to changesin the assetmix of Victoria's securities endowment,boostingequity allocationsto some75 percent(at the expense of fixed-incomeallocations)becausethe stability of its realty incomestream can serveas a counterbalance to the variability of returnsinherentin seeking higher yields with equities. Notes 1. All infonnationon propertytransactions,leaseholdtenns,andrevenuestreams is derived from property and financial recordsmaintainedby the Bursar'sOffice, Victoria University. 2. All referencesto proceedingsanddecisionsof theVictoria University Boardof Regentsandits variouscommittees,consultingreportsthey commissioned,and correspondence are takenfrom formal minutesand papersfiled with themlodgedin the United Church andVictoria University Archives in Toronto.

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3. A letter of February 2, 1953, from O.D. Vaughan for U of T to Leopold MacCaulay,then chairmanof Victoria's board,indicatesthat U ofT's boardwas not at all happywith the requestto waive the restrictivecovenantandremindedVictoria it hadagreedto a repurchaseclausein the eventit no longerwishedto usethe landsfor academicpurposes.AccompanyingMacCaulayto makethe requestfor waiver was E.W. Bickle, a well-connectedmemberof Victoria's board who regularly hosted Ontario's provincial premier,The Hon. Leslie Frost, at Sundaydinner in his home (interview with Mrs. W. Wilder, Bickle'sdaughter).Bickle's next-doorneighbor,Henry E. Langford, was active in the board'saffairs in the early 1950sand chairmanwhen the 1960leasewas agreed.His sonAlex Langford, later also very active as a Victoria boardmember,aversthat it took behind-the-scenes interventionby Frostto convince authoritiesat U of T to give way and allow Victoria to servethe federateduniversity causeby using the lands to generaterevenueratherthan for academicfacilities in a narrow sense. 4. For full details see the report of w.H. Bosley, October 5, 1955 (filed with Board of Regentspapersin the United Church and Victoria Archives in Toronto). Bosley was in the 1950sand remainstoday a prominentlocal realty firm. 5. Reportfrom the RealEstateDepartment,TheCharteredTrust Company,which had beencommissionedto give adviceto Victoria and were subsequentlyappointed as the university'sagentsto marketthe propertyon a leaseholdbasis. 6. Boardandcommitteeminutesof discussionsrecordno seriousopposition,and Victoria's presidentof the day, Dr. A.B.B. Moore, remembersnone of consequence apart from a few studentswho suggestedthe land might better be usedto createa greenpark (interview with Dr. A.B.B. Moore). 7. For details seethe report of February15, 1960, from the Real EstateDepartment,The CharteredTrust Company. 8. The OntarioMunicipal Boardis a quasi-judicialagencywith powerto rule on appealsagainstplanningdecisionsby municipalcouncilsin Ontario.Victoria andits lesseeswere the appellantsin this case. 9. At the boardmeetingof April 11, 1957,whencommercialdevelopmentof the lands was under discussion,one prominent memberof the board, Mrs. Clara F. McEachren,wantedit officially notedthat shewas "utterly and completelyopposed to selling any part of the Bloor St. frontage."Shehad grown up in her family's mansion just a block away at the edgeof Queen'sPark. The boardchairmanof the day, Henry E. Langford, was a firm advocateof leasing. He had met the Duke of Westministeron a visit to Londonandbeenmuchimpressedwith the duke'sfortunes in property and his advice neverto sell land (interview with Alex Langford, son of H.E. Langford). 10. Donald Mills, part of the legal team that drafted the leasesfor Victoria, had worked on a major commercialleaseholddevelopmentjust acrossthe street from theselands only a short time earlier (interview with Donald Mills). That legal team alsoincludedhis father, RalphMills, who later servedaschairmanof Victoria's board (1962-1970). 11. Victoria had over the previousdecadebuilt a store of good will with Toronto heritageand planning officials in the courseof considerablework to restoreand preservethreesignificantheritagestructuresin the inventory of its own campusbuildings. 12. Citation from HeritageTorontoAward of Merit, June9, 1997. 13. Historic designationof a building by city authorities in Ontario does not guaranteepreservation;it providesfor a period of delay if the ownerof a designated

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propertyseeksto demolishor makeunsympatheticchanges,during which time local officials can insist that all avenuesto advancepreservationbe explored. Heritage preservationagreementsare frequently the price a property ownerpaysin exchange for zoning concessionsbeing soughtin respectof commercialuseand/oradditional densitypermissions. 14. While the leasehold rental paymentsapplicableto Victoria's Bloor Streetlands detailedin CaseStudy 1 aboveare a matter of public recordbecauseof the parties' resort to arbitration and court proceedingsin the early 1990s,leaserents and other businesstermsin this instance,as with the McKinsey casethat follows, aredescribed only in very generaltermsto respectcommercialconfidences. 15. Victoria from the outsetworked with city planning officials and gainedtheir cooperationin issuinga positiveplanningreport recommendingthe zoning and official plan changespermitting higher density and commercialuse permissionsbeing soughtby the university. The Toronto City Council initially approvedthe planners' recommendations in principle, but later, after studentoppositionsurfacedand a municipal election intervened,refusedthe changessought.Victoria appealedthe decision to the Ontario Municipal Board and, with the help of city plannerswho were subpoenaedto testify on Victoria's behalf, won the case. 16. Victoria hassinceobtainedformal zoningapprovalsto permit a luxury hotel or residentialbuilding of 125 rooms or suites on this comer site, and in the spring of 2003 issueda requestfor proposalswith the hopeof tinding a developmentpartnerto build out this comerproperty on a land-leasebasis.Victoria is now working with a prominent local developerto obtain rezoning permissionsfor a new luxury rental building on the site.

13 The Little Fish Swallows the Big Fish Financing the DePaul Center in Chicago Kenneth McHugh

In the late autumnof 1988, DePaulUniversity in Chicagowas well alongits path toward transformationfrom the "little schoolunderthe EI tracks" to its position as the largest Catholic and ninth largestprivate university in the nation. DePaul had experiencedcontinuousenrollment growth since the 1970s, mostly at its two major campusesin Chicago-theLoop Campus downtown and the Lincoln Park Campusin a neighborhoodexperiencing gentrification on the city's North Side. Driven by a state-of-the-artenrollment managementfunction, on-campushousingon the Lincoln Park Campus had tripled, with the building cranereplacing the Blue Demon as that campus'smascot.However,the university'sresponseto growth on the downtown Loop Campushad beenlesseffective. The Loop Campuswas home to the university's central administration, and more than 8,900studentswere enrolledin the four collegesat that location: Collegeof Law, Collegeof Commerce,Schoolfor New Learning (for adults returning to earndegrees),and the ComputerScienceDepartmentof DePaul'sCollegeof Liberal Arts and Sciences.The total administrativeand academicspacecontainedin the three buildings of the Loop Campus-the AdministrationCenter,O'Malley, andLewis buildings-was568,000square feet (seeMap 13.1). The university had adopteda facilities masterplan for the Loop Campus,which provided for renovationof the existing buildings into new and modemfacilities. However, the masterplan was deficient; it could not be implementedbecausethere was no flexibility in the existing campusspace,nor was there readily available rental spacein the area to allow the university to begin a stagingoperationfor the implementationof the masterplan (The DePaulia 1989).This chapterdiscussesthe uniqueopportunity and financing plan that allowed DePaul to overcomethesechallengesand expandits Loop Campus. 238

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The Building

Out of aRichardson, in the office of DePaul'sthen president,the Reverend John T. Richardson,one had a clear view into the abandonedand deteriorating GoldblattDepartmentStore.The building, abandonedfor more than a decade,had once been a proud memberof the "battleship" department stores that flanked State Street, Chicago's"Great Street" for downtown

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retail. Constructedin 1911 as the RothschildDepartmentStoreanddesigned by Holabird and Roche, the building containedmore than 700,000 square feet, including basementspace.The structurestretcheda full city block from JacksonBoulevardto Van BurenStreetalongStateStreetin Chicago'sSouth Loop. Eachof the fIrst ten floors contained50,000squarefeet and the eleventh floor added37,500squarefeet. It was placedon the list of buildings on the National Registerof Historic Placesin 1989. A downturnin Chicago'seconomyin the 1970sled to the closureof some of its grandStateStreetdepartmentstoressothatby theearly 1980sthe Goldblatt Building had been empty and deterioratingfor a decade,while the City of Chicagoponderedits future. In 1982Mayor JaneByrne, with the city council's approval,purchasedthe building for $10 million and designatedit as the site for the city's new centrallibrary. By 1986 the city had a new mayor, and politics and public opinion were complicating the project. The city had spentalmost $15 million preparing the building for conversionand faced a projected$80 million in additional expensesto completethe project. Mayor Harold Washington,saddledby the project he had inherited from the previous administration,said "Let's go aheadand makethe bestwe can on a bad deal, but don't forgetwho did it to us" (Strong 1986). By the summerof 1986 the Chicago Sun-Timesand the Union LeagueClub hadmounteda negativepublic opinion campaignagainst using the site for the centrallibrary. JosephCardinalBernadinandA Better GovernmentAssociationjoinedthat campaign(Camper,Kass,andCrimmins 1986). The negativesentimentgrew from fears that the building was structurally unsoundfor use as a library, that the renovation would cost $121 million, $17 million more than originally projected, and that the city deserveda better site and building for its central library (Camper,Kass, and Crimmins 1986). Finally, at the end of that year, the ChicagoPublic Library Board voted unanimouslyto build the library on city-ownedland one block away from the Goldblatt site. The changein plans fInally led the city to seeka buyer for the Goldblatt Building in 1988,openingthe doorfor DePaulto purchasethebuilding (Houston 1988).To assistthe university in studyingthe feasibility of acquiringand usingthe building, the universityestablisheda "blue ribbon committee"made up of trustees,civic leaders,andreal estateexpertsto help it formulatea plan (DePaulUniversity 1988b). The resulting plan proposeda vertical subdivision of the building into three distinct uses.Approximately 300,000 squarefeet of the building on floors 6, 7,8,9, and 10, and threequartersofthe building's penthousewould houseDePaul'sGraduateSchool of Business,a studentunion, the central library for the College of Commerce,additional classroomspace,and a

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conferencecenter. To provide the expansionspacethat the university required to addressits growth, the plan would link the Goldblatt Building to DePaul'scurrentacademicfacilities via a seriesof sky bridgeslinked to the Lewis-O'Malley complex (DePaulUniversity 1988a).Floors 2, 3,4, and 5 anda portion of the basementwould serveas commercialoffice spacefor the rental market.The third mixed-useelementdedicated75,000squarefeet on the first floor to incorporatelight retailing into the cultural and educational district of SouthStateStreet,which was promotedby the StateStreetPlan, a blueprintfor areadevelopmentcreatedby civic leaders.The remainingspace accommodatedthe mechanicalsystemsof the building as well as certain maintenancefunctions and generalstorage. University administratorsworked with the city to createa new subdivision called the McHugh Re-subdivisionto facilitate the DePaulCenterDevelopment.Using architecturaldrawingsas a guide, a surveywas prepared, dividing the facility into separatepin numbersthat would accommodatethe horizontalandverticaladjacenciesnecessaryto constructandoperatea mixeduse facility. It was important that the ownershipmechanismaccommodate both for-profit and not-for-profit uses.The result was the creationof three separatefunctions within the building: an academicbuilding, a commercial office building, and a retail center. A total project budget,covering hard constructioncosts,soft costs,and land acquisition costs, was set at $70 million dollars (Long and Spielman 1991).The real estateexpertswho servedon the blue-ribboncommitteeassistedin the establishmentof the budgetand made sure that it containeda generousdeveloperfee, which was later eliminatedin the value engineering process.A number of individuals interpretedthe size of the budget as an indication that the projectwas not feasiblefor DePaul(The DePaulia 1989). One notableDePaultrusteememorablydescribedthe project as "the little fish trying to swallow the big fish." Therefore,while the mixed-usefacility envisionedin the early planning phaseappearedto be the ideal solution for DePaul'sspaceneeds,it could only move forward with an equally creative financing plan. The Financing Plan

PurchasePrice

The first focus of the financial plan wasto makea decisionasto the purchase price. This becamea matterof substantialdebate,sincethe City of Chicago had paid an estimated$10 million for the building and had spentconsiderable amountsof additionalmoneystudyingthe facility for useas the central

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library. In the courseof the debate,threedifferent strategiesfor determining the purchase price emerged.The first was to makethe city whole by offering what it had investedinto the building, with a possiblereductionjustified by the loss in value during the city's ownership,including loss associatedwith not heatingthe building over the harshChicagowinters. This strategywas quickly abandonedwhen it was determinedthat keepingthe city whole plus the projectedcostof renovationexceededthe costof new constructionon the land, if acquiredat marketvalue after the building was demolished. The secondapproachwas to offer what the developmentcommunityhad been proposing-thefair market value of the land after demolition of the building. The value of raw land in the SouthLoop rangedfrom $200to $300 a squarefoot at that time; additionally it was arguedthat the building had a negativevalue to be deductedfrom the value of the land to arrive at a fair market purchaseprice. This approachalso failed to provide the necessary purchaseprice to makethe plan work. The third methodarguedthat becauseof the historical natureof the building andthe public oppositionto demolishingit, the purchase price shouldbe reducednot by demolition costs, but by renovationcosts. Due to the poor maintenanceand high renovationcosts,and the needto savethe building, a casewas madethat the site had little value. After carefully analyzing all three strategiesfor determininga purchase price and consideringthe likelihood that someonecould acquirethe site and demolishthe building in the face of mountingpublic opposition,the university decidedthat the financing plan should contain a purchaseprice offer indicatingthat the university would be undertakinga significantrisk to place this historicbuilding backinto service(Davis 1988;ChicagoSun-Times1989; DePaul University 1989). Additionally, DePaul administratorsfelt that the purchaseprice shouldreflect the university'spast, present,and future commitmentto the citizensof Chicago.Underscoringthe university'scredibility was the fact that DePaul'scampuseshad remaineda stabilizing force in the SouthLoop andin Lincoln Parkin pasteraswhentheseneighborhoodswere blighted. This legacy allowedDePaulto make a strong statementregarding the university'swillingness to partnerwith city officials and with city residentsin the restorationof this historic building (DePaulUniversity 1989). To reflect thosecritical points, the purchaseprice hadthreeelements.The first was a cash paymentthat would make a statementwith regard to the university'sgood-faithcommitmentwithout creatinga burdenon the overall projectbudget.It was determined thata paymentof $1 million in cashupon the closing of the transactionwould makesucha statement. To demonstratethe university's confidencethat the building could be restorednot only within the predeterminedbudget, but also after value

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engineeringcould producea savingsto the budget,the university agreedto shareexpectedcost savingswith the City of Chicagoas part of the overall price of the building. Thereforeit agreedto makeavailable25 percentof the savings off the project budget to a maximum of $1 million as additional paymentto the city for the building (Scott 1989). Finally the university wanted to demonstratea commitmentto the city andits residentswho hadbeenthe lifeblood of DePaulsinceits inception.To honor that relationshipthe purchase priceincluded a ten-yearguaranteeto issuepartial scholarshipsto Chicagoresidentswho chooseto attendDePaul University. This scholarshipprogram, appropriatelynamedThe Mayor's ScholarshipProgram-Leadership 2000, would provide $250,000a year in DePaulscholarshipsfor a ten-yearperiod. The university wantedto increaseits commitmentto institutional finanprogram,sothe annual$250,000 cial aid aspartof its enrollmentmanagement paymentwas easily absorbedas part of the university's strategicenrollment plan. As a result this scholarship programwas not dealt with as a separateline item of expenseto the project.Throughvalue engineeringthe university was able to reducethe project budget by $5 million; in effect this generatedan additional $1 million paymentto the city. Later the city reinvestedthis $1 million for improvementsin the floors they eventually occupied.In the final analysisof determiningthe purchaseprice, it could be said that the university's true cost of acquiring the building and land was a cashpaymentof $1 million. Yet, as a strategywas developedto garnerpublic supportfor the city's decisionto sell the building, the city was able to say that the purchaseprice for the benefit of the citizens of Chicagohad beenin reality $4.5 million. Thus the city was able to satisfy thosewho felt the price of $1 million was too low and, in effect, the project benefitedfrom the fact that the $1 million paid for the building and the land was a symbolic purchaseprice, not a true burdento the project.

The "Estatefor Years"Concept The next sectionof the financing plan wasprobablythe mostcritical element to the successof the project. Not unlike the university, the City of Chicago's office needshad grown significantly. The city had a sizablenumberof offices scatteredacross downtown Chicago in various rental properties (Spielman1989).At one point the city had consideredturning the Goldblatt Building into City Hall Southandwould haveusedthe entirebuilding for its purposes.For someundeterminedreasonthe idea was abandonedand the city continuedto rely on rental spaceelsewhere.The city had commissioned

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a study to justify the notion that anothercity-ownedbuilding would eventually be required to support the growth of city government.The study reportedthe commercialrentallocationsof certaincity offices. It thenanalyzed the leaseterms and projectedfuture costsresulting from increasedrent due to built-in increasesin the leaserate plus the estimatedincreasein the passthrough operatingcost. Also of note was the fact that when the city rents propertyfrom a commerciallandlord, the city is requiredto pay its prorated portion of real estatetaxes the sameas any commercialtenantwould pay. This study was a public documentavailable duringthe formation of the financingplan for the DePaulCenter.It quickly becameapparentthat the city would gain a substantialbenefit by occupyingspacein the DePaulCenter. The aggregateamountof spaceavailable was a rentablesquarefootage of 225,000squarefeet. The conceptof simply leasingspaceto the city as a tenanthad significant drawbacksfor DePaul.Becauseof the commercialnatureof the space,the university could not rely on tax-exemptfinancing for the city's space.Another difficult aspectin leasing to a municipality was that the underlying credit of the municipality, while certainly ratedhigh, was problematicfrom the standpointthat most leasesare subjectto annualappropriation.In effect a leasecanbe canceledin a tight budgetyear.Thereforea leasewith the City of Chicagofor the long term did not appearto be the ideal solutionunlessthe university was willing to take on the risk for financing the entire 225,000 squarefeet of commercialoffice space. The university'sappetitefor assumingsucha risk was significantly low. It had just begun to design and constructa new library on the Lincoln Park Campus,which had a budgetof $25 million. It was clear that the financing plan had to be more creativein dealingwith the commercialoffice space.A suggestionof simply selling the spaceto the city after the vertical subdivision was completedwas discountedfor two reasons.The university had a long-term goal to own the building and was reluctantto considera structure where it would shareownership.The city was equally hesitantto accept a structurein which it would be only a partial owner of a building housingits offices. The city wantedthe benefitsof leasing,but was unable to provide a long-term commitment.From theseconcernsan idea sprang forth that has becomethe hallmark of the DePaulCenterfinancing plan. The city was offeredthe right to purchasethe 225,000squarefeet undera legal conceptcalled an "estatefor years" or a "fee simple determinable" (DePaulUniversity 1989). This providedall the elementsof ownershipbut with a definite dateof expirationofthoseownershiprights. Coupledwith the estatefor yearswas a serviceagreementby which the university contracted with the city to provide servicesto the city space,which would be at actual

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cost plus a managementfee and would be allowed to escalateas those expensesincreasedin cost. Furthermorethe university agreedto provide an allowanceto be usedfor interior improvementsand offered to servein the role of constructionmanager.As notedearlier, the university had generated an additional $1 million from the project budget to be applied to the purchaseprice when the city agreedto acceptthe conceptof occupyingDePaul Centerunderthe estatefor years.The city also agreedto invest the $1 million in its own tenantimprovements. The conceptof purchasingan estatefor yearsallowed the city to finance the purchaseusing tax-exemptbonds.The estatefor yearswas not subjectto annual appropriation,allowing the city to offer its own tax-exemptbonds and yet on its books treat the debt serviceas leasepaymentsover a thirtyyear period. One of the most significant elementsof the estatefor yearswas that the rental paymentswould not escalate.That enabledthe city to makepayments into the project fund for approximately $30 million and negatedthe university'sneedto borrow that portion of the projectfund. When presenting the estatefor years conceptto the city, the university relied heavily on the tremendouspotential savingsfor the city in comparisonto its then current rental position, wherebyit was paying real estatetaxesplus rent that escalated on an annualbasis.Becauseof the ownershipstructurefor this building, the city would not be requiredto pay real estatetaxeson its spacein the building. Over a thirty-yearperiodthe comparisonyielded a grosssavingsto the city, and thereforeto taxpayers,estimatedto be as high as $177 million (DePaulUniversity 1989; ChicagoSun-Times1989).Clearly the city hadyet anotherfactor to point to in justifying the low purchaseprice to DePaulfor the saleof the Goldblatt Building and site. At the closing DePaulUniversity presenteda $1 million checkto the City of Chicago,a promiseto providean additional$1 million dependingon project savings,anda commitmentto issue$2.5 million of DePaulscholarshipsdollars to the citizensof Chicagoover a ten-yearperiod. The city turnedover to the university the deed to the building plus an obligation to pay approximately $30 million for the estatefor yearsin the building, which would be the future hometo 225,000squarefeet of city governmentoffices. Early on it becameapparentthe city would financeits estateusing a general obligationbondissue.This could haveput DePaulin a precariousfinancial position during the constructionperiod. Howeverthe city agreedto pay for its estatein advance.Working with the city's controller, DePaulprepared a sophisticatedfinancial model to predict andallocateacquisition,construction, andfinancing costsbetweenthe tenanciesso the partiescould negotiate a draw scheduleagainstthe purchaseprice. Paymentof the purchaseprice in

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installmentswould ensurethe university always had sufficient resourcesto fund developmentcostsas they arose.

Value Engineering The financing plan set the purchaseprice, and a strategyto deal with the rent-uprisk for the commercialoffice spacewas in place.Thereforethe constructionrisk becamethe next elementto receivesubstantialdiscussionand debate.Becauseof the history of the building, its age, the previousstudy of its renovationas a potential library, its abandonment,and its deteriorating condition, there probably was not anotherChicagobuilding that had been subjectto more evaluation.Embeddedin all of the dataand the studieswas an underlying concernaboutthe unknownversusthe known. The designers of the financing plan thereforemadetwo fundamentaldecisionsregarding the constructionrisk. The first decision was to exerciseextremecaution in preparingthe budget.All the normalconstructioncontingencieshadbeendeveloped,but when the budgetwas being incorporatedinto the proposal,an additional $5 million was addedto provide for yet anothercontingency.While it was contemplatedthat the normal contingenciescould be usedto improve the project,if available, the additional $5 million was available to reduce the potential overbudgetexposure,but was neverintendedto be spent.Hencethis $5 million was a project risk reservefund. The seconddecision involved the constructionprocess.The university was to serve as generalcontractorfor architecturalexterior designand the demolition work, including environmentalissues.The goal was to reduce the building interior to its historical framework.The intent was that contractors and subcontractorsbidding the project would not view it as a problematic renovationwith all kinds of unknowns.By eliminating the old interior build-out, contractorswould see open spaceswith building conditions exposed.As a resultof this strategy,the university was successfulin its goal to maintain the $5 million reserve,and was able to tum other contingencies into project improvements.

Tax-ExemptBonds The financial plan next dealt with that portion of the building that would be the expansionspacefor the university. The plan called for the university to exclusivelyuse approximately300,000squarefeet on floors six throughten and three-quartersof the spaceon floor eleven. The price tag for the university'sspacewas approximately$25 million (McRoberts1989).As pre-

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viously mentioned,the university had committed to the constructionof a new library on its Lincoln Park Campusfor a similar cost. The first choice for a plan to pay for both the DePaulCenterrenovationand the new library was to make both projectselementsof the university'srecently announced $100 million capital campaign.While this idea generatedenthusiasm,it was generallyconcededthat the university had to backstopthe capital campaign with a different financing vehicle that neededto incorporatesomecharacteristics of a bridge financing. The financing was viewed, particularly in the caseof DePaul Center, as being neededfor a period of approximatelyten years.A decadewould be the time that the campaignwould requirefor soliciting and receivingpledgepayments.To avoid a bond issueof thirty yearsin duration,the university conceiveda programto issuegeneralobligation taxexemptbondswith the maximumflexibility. The university issued$57 million of adjustabledemand bonds throughthe Illinois EducationalFacilities Authority on February7, 1992 (First Chicago 1992).The uniquefeaturewas that eachbondwas capableof operatingat any time in one of five modes:a daily mode,a weekly mode, a commercialpaper mode,an adjustablelong mode,or a fixed mode.Bondsin any modecould be convertedto one or more of the othermodes.The bondswere then subjectto optional redemptionfrom the date of the original issuance.The bondsin the daily, weekly, commercialpaper,andadjustablelong modesweresecuredby a transferable,irrevocable,direct-paidletterof creditfrom a Triple-A-ratedbank. When a bond was placed in a fixed mode it was not securedby the credit facility. A remarketingagent was selectedto reissuebonds, which came to maturity in any of the shortermodes.The rationalebehindthe structurewas to first take advantageof the lower variableshort-terminterestrate and then provide for easeof redemptionin the event that paymentsfor the project were receivedvia the capital campaign(First Chicagoet al. 1992). Not all thingscontemplatedby the financial plan workedas designed.The $100 million capital campaignfor the university, althoughsuccessfulin the aggregate,failed to generatespecific capital gifts for the projectsdesignated to benefitfrom the campaign.For examplethe Collegeof Commercegraduate program,which would becomea primary occupantof the DePaulCenter, receivedan almost $10 million naming gift for what becamethe Kellstadt GraduateSchool of Business,but donor restrictions preventeduse of any portion of the gift for bricks and mortar. The gift could not help the project by serving as budgetrelief, thus freeing up university funds, becauseof resistanceby the academicunit. As a consequence, at a future point the university refundedthis bondissuewith anotheroneandconvertedit to a fixed-rate general obligation of the university, and continuesto make principal and interestpaymentsto pay for the projects.

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The Music Mart Developing a strategy to deal with financing the retail spacewas another elementof the financing plan. The university had committedin the redevelopmentagreementwith the city for the building to maintain approximately 75,000 squarefeet of retail spaceon the first floor and lower level of the building. A plan was developedfor financing this spacethrough a partnership with a private developerwho had experiencein marketingretail space. This spacedid not qualify for tax-exemptfinancing. In addition the 4- to 5percentportion of the tax-exemptbond issuethat might have qualified for taxableusehad beenpreviouslycommittedto the eleventhfloor cafeteriain order to facilitate a contractwith the food-servicevendor. The retail space also was subjectto real estatetaxes. After reachingagreementwith the city, the university beganto implement its financing strategyfor this space.A carefully preparedrequestfor proposals was submittedto a number of notable real estatedeveloperswho had expertisein the rental of retail properties.After an extensiveselectionprocess,a letter of intent was signedwith a retail developerwho had proposeda single paymentto the university equal to the cost of the shell and core improvementsto the building for the retail space.The developeralso agreedto enterinto a long-termleaseby which the university would receiveadditional rental paymentsfrom the developerafter a successfulretail marketingeffort. The developerwould then bearthe financing costof any tenantimprovement costsnecessaryto secureretail tenants. The due-diligenceperiod gavethe developertime and opportunityto test the marketplaceto ensurethe validity of the underlyingassumptionsregarding the ability to attractfinancing basedon leaseagreements.It becameclear that the location of the real estateand the developer'sown experienceand expertisewould not result in a successfulproject. At the sametime the university becamemoresensitiveto assuringthat the retail componentwascompatible with the academicfunction of the building. There was a growing concernthat substandard retailing would be the only businessattractedto the location. In responseto this concernand the ineffectivenessof the developer, the university embarkedon an alternativeapproach. Armed with a willingness to financethe retail portion of the project with university funds and acceptrental income as a return on its investment,the university formed a conceptfor marketing the retail spacecalled the Chicago Music Mart. The theme of ChicagoMusic Mart was borne from the history of the university'sbuildingsin the SouthLoop. At onetime the South Loop was calledMusic Row becauseit was hometo a substantialnumberof musicmanufacturersandstores.For exampleoneofthe university'sbuildings,

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the Lewis Center, was the former Kimball Piano Factory. The building that housedthe university's administrationand growing computersciencedepartmenthad once beenthe Lyon and Healy Harp factory. Suchprominent namesas Steinwayand Stegeralso had outletsin the area(Frantz 1996). The university implementedthe Music Mart plan by establishingan internal departmentto deal with retail tenants,including retailers already using spacein other university buildings. DePaul also engagedthe servicesof a retail brokerand a public relationsfirm. An enhancement to the plan was the addition of a stagein the lower areaof the Music Mart and the plan to offer community groupsthe opportunityto presentnoon concertsor other performances(Shutt 1993). To this day, this popular attraction is referred to as "Tunes at Noon." While the conceptrequired a great deal of patienceand createdsometrepidationabout concernfor using university funds, the result was and is a very successfulinvestment.

Public Opinion The financingplan at this point clearly had developedsix strategiesthat were expectedto be sufficient to accomplishthe objective. It had a strategywith regardto the properpurchaseprice. The estatefor yearsplan for the office spaceoffered a win-win situation for both the city and the university. The budgetwas well protectedfrom unforeseenand unanticipatedevents,and a constructionstrategywas in place to implementthe plan. The university's own financing was acceptableto its Board of Trusteesand the board willingly took on responsibility for the portion to be funded from the capital campaigngift receipts.The retail portion provided a creative solution for proceedingwith the project.The final elementof the plan did not necessarily deal with financing but with successin selling the idea. The complexity of the project and the uniquenessof what it offered required a very positivecampaignto promotethe plan. The purchaseprice was anticipatedto generatenegativepublic opinion.Theremovalof 225,000square feet of city spacefrom the commercialproperty inventory could have createdresistance.On the positive side, providing spacefor the university to continueto grow andthereturnof musicretailingto the SouthLoop wereconsidered positive elements (Independent Quarterly 1991).The overriding positive outcomeof the projectwas the renovationof the blightedGoldblatt Building into a viable anchorof the SouthLoop, using renovationratherthan demolition to bring a landmarkbuilding back to life (DePaulUniversity 1989). For this messageto be clearly communicated,the university'smediarelations departmentscheduleda seriesof editorial meetingswith threemajor and influential city publications,the ChicagoSun-Times,the ChicagoTribune, and

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Crain's Chicago Business.The plan was sharedwith each of the editorial boardsin greatdetail, and in all threecasestherewas a high level of interest and generalsupportin what was beginningto be characterizedas a mutually advantageousendeavor(Chicago Sun-Times1989; Crain's Chicago Business1989a).The project certainly was going to be a win for the university becauseit would enableneededexpansionand additional state-of-the-art facilities at an affordablecost. The projectwas a win for the city of Chicago becauseit presentedan opportunity to creatively deal with an eyesoreon StateStreet.The plan also turnedout to be a win for taxpayersbecauseof the tremendoussavings generated in accommodatingcity offices in the building. All three newspaperspublishededitorials in supportof the project and set the stagefor positive public opinion and successfor the project. Perhaps the best accountingof the supportcould be found in the following editorial that appearedin Crain's ChicagoBusiness(l989b). Take the moneyand run Richie Daley is one lucky politician. Consider:Thefate of the Goldblatt'sbuilding hasbedeviledeverymayor since JaneByrne, who was connedinto buying it nearly a decadeago. Since then, the building has had starring roles as a future library and a newspaperscandal;today,it's an unheatedhulk that is deterioratingbadly. Now comesa planthat would takethe building off the city's handswithout bulldozing a landmark; help revitalize the south end of the StateStreet Mall; and meetthe spaceneedsof a growing educationalinstitution.... The proposalwould leaveretail spaceandan urbanpark at streetlevel, six floors for the university and 214,000squarefeet of office space.... . . .The time hascometo endthe long-runningGoldblatt'sdisaster.We hopeDaley administrationofficials acceptthe DePaulplan. Therewas nevera word of objectionmadewith regardto the university's plan to renew the white elephanton State Street, and early praise for the project wasreinforcedafter the building was completed(seeTable 13.1). In November2000, the UrbanLand Institutepresentedthe DePaulCenterwith its prestigiousAward for Excellencefor Rehabilitation. Conclusion Are there lessonsto be learnedfrom the plan to acquire and renovatethe DePaulCenterbuilding? Or were the circumstancesso unique that it was a one-of-a-kindproject?While the specific detailswould indicatethat the elementsin placecametogetherin a fashionthat cannotbe replicated,thereare

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Table 13.1

Summary Status of the DePaul Center, 1989 The property

700,000-square-foot building, 11 stories; former department store

Historic significance

Built in 1911 and listed on the National Register of Historical Places in 1989

Previous owner

City of Chicago, 1982-89. Abandoned, empty, and unheated during that time

Location

Adjacent to DePaul University Loop Campus

The financing plan

• Offer purchase price: $4,500,000 • Paid price: $1,000,000 in cash; $2,500,000 in DePaul scholarships to Chicago residents ($250,000/year for ten years); and $1,000,000 from project savings

Source of funds

• $25,000,000 tax-exempt bond issue by DePaul University • $30,000,000 one-time payment for thirty-year real estate interest in 225,000 square feet of office space in the building • $10,000,000 internal investment by DePaul University to finance the retail space

Use of funds

$65,000,000 project fund to acquire and renovate the Goldblatt Department Store building

Source: Used by permissionof G-SpotDesign, Chicago,Illinois.

certain aspectsof the financing plan that can be applied to other projects. Risk is alwayspresent;a goodplan doesnot eliminateit but mitigatesagainst it. In the caseof the DePaulCenter,DePaulUniversity undertookthe developmentrisk, the constructionrisk, and the retail risk. At the time the university was well-positionedwith internal experienceand skills to managethese risks. More important, there was a clear inside knowledgeof both the city and the university that did not exist even with the developerson the blueribbon committee. Without the benefit of the creativefinancing plan, the economicswould not have worked, and the opportunity to sell the idea and the potentialbenefits to the many skeptics would not have existed. The city neededto be convincedthat the project would have public acceptanceand that DePaul had the in-houseexpertiseto managea projectthat at the time was almostas large as the annualuniversity budget.In the final analysisthe financial feasibility and the mutually beneficialeconomicsof the spacefor both the university and the city provedto be the decidingfactors.It was the kind of plan that renownedChicago architectand city plannerDaniel Burnhamwould have endorsedbecauseit had "magic to stir men'sblood."

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References Camper,John, John Kass, and Jerry Crimmins. 1986. Library may close book on Goldblatt's.Chicago Tribune, August 14: 1. Chicago Sun-Times.1989. Editorial. Act on good plan for vacanteyesore,October 1: 54. Crain's Chicago Business.1989a.Editorial. DePaulscoresbig with win-win plan, March 13: 10. - - - . 1989b.Editorial. Takethe moneyand run, September25: 10. Davis, Robert. 1988. Goldblatt's demolition rumors raise concernon State Street. ChicagoTribune, September16: 11. DePaulUniversity. 1988a.Blue ribbon committeenotes,November16. - - - . 1988b.DePaulUniversity planningmeetingminutes,October27. - - - . 1989. Proposalto the City of Chicagofor redevelopmentof the Goldblatt building. September15. First Chicago,William Blair & Company,and The NorthernTrust Company.1992. Illinois EducationalFacilities Authority: Adjustable DemandRevenueBondsDePaulUniversity. Series1992.February7. Frantz,John. 1996.ChicagoMusic Mart, ChicagoIL ... It's coming.Music & Sound 23-24. Retailer, September/October: Houston,Jack. 1988. City to seekbuyer for old store. Chicago Tribune, December 2: 4. IndependentQuarterly-FederationofIllinois IndependentCollegesand Universities, 1991.DePaulinitiates cornerstone program, Fall. Long, Ray, andFranSpielman.1991.Goldblattbuilding's saleto DePaulOK'd. Chicago Sun-Times,October3: 40. McRoberts,Flynn. 1989. DePaulis lone bidderfor Goldblattbuilding. Chicago Tribune,September17: 2C3. Scott,Chris. 1989.DePaulsealsdealfor Goldblatt'sbuilding. Crain's ChicagoBusiness,November27: 8. Shutt, Craig. 1993. Anatomy of a rehab: DePaul Center, the adaptivere-useof an historic departmentstore.Compiledby Daniel P. Coffey & Associates,Ltd. from articles that appearedin CommericalRenovationfrom August 1992 to October 1993. Spielman,Fran. 1989. City looks for ways to trim leasecosts. Chicago Sun-Times, July 11: 10. Strong,James.1986. Library site bad, but set, mayor says.Chicago Tribune, March 14: 8. The DePaulia. 1989. Masterplan looks good on paper,but questionsremain,February 24: 7.

14 No Such Thing as Vacant Land Northeastern University and Davenport Commons Allegra Calder, Gabriel Grant, and Holly Hart Muson

DavenportCommonsis an innovative model of communityhousingfor both studentsand local residentsthat was developedon behalfof NortheasternUniversity by a partnershipof three local developersin Boston, Massachusetts. The projectwas developedin the neighboringcommunityof Roxbury because the university haslittle availableland insideits traditionalcampusboundaries. The completedprojectconsistsof 125 units of housingfor 595 studentsand 15 staff; 75 owner-occupiedtownhouses;and 2,100 squarefeet of retail space. From startto finish the projectwas controversial,andit highlightsa numberof challengesfaced by urban universitieswith a needto expand. University-led real estatedevelopmentin Boston, and this project in particular, is controversialfor at leasttwo reasons.First, the shortageof available vacantland in the city politicizes virtually all large-scaledevelopment.Second, local universitiesare thoughtby someto hold inordinateinfluenceon the city's economyandland usepatterns.This powerhascontributedto feelingsof resentmentamongneighboringpopUlations. This chapterdescribeshow the DavenportCommonsproject evolved to surmountseveralobstaclesandseeksto provideinsightfor real estatedevelopers, city anduniversityofficials, communitymembers,and activists.Particular attentionis paid to the structureand the workings of the developer,Madison DavenportPartners,and the other major stakeholders,in an effort to explain who was involved andhow they contributed.The projecthasbeenheraldedas a successby virtually all stakeholdersandoffers a numberof valuablelessons.

Background Hometo world-famousinstitutionssuchas HarvardUniversity andthe MassachusettsInstitute of Technology, Greater Boston has more than sixty 253

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institutions of higher education.Theseinstitutions playa vital role in the city's economicand cultural life and significantly impact the housingmarket. For examplein 1998 there were approximately135,000higher education studentsliving in Boston.! Of that number, only about 28,000, or 20 percent,lived in university-providedhousing(Tong 2000). Local politicians and urbanpolicy expertshavecalled upon local universitiesand collegesto provide more studenthousingto help stabilizethe housingmarket.A recent reporton housingin Bostonsuggeststhat adding7,500studenthousingunits over five yearscould easethe pressureon the housingmarketandbenefitthe institutions as well (Bluestoneet al. 2001). NortheasternUniversity is a private, nonprofit, coeducationalinstitution of highereducationfoundedin 1898at the Bostonbranchof theYoung Men's ChristianAssociation.Today Northeasternhas about22,500 studentsand is a nationalresearchuniversity that is student-centered, practice-oriented,and urban. According to Richard Freeland,presidentof Northeastern,"We are totally the oppositeof Harvard.We celebrateour openedgesso nobodycan miss the point that we are open to the city" (Klenotic 2000). Over the past decadeNortheasternhas undergonetremendouschange,transformingitself from a little-known school cateringprimarily to local studentsto one with a national reputationthat draws studentsfrom acrossthe country and around the world. As a result of this change,a primary focus of the school'smission hasbeenthe creationof high-quality studenthousingto respondto intensifying demandfor university-operatedhousing. It is not only the presenceof university studentsthat accountsfor the Bostonregion'stight housingmarket. Demandfar exceedssupply, and rent control endedin 1994,resultingin rental pricesthat areamongthe highestin the nation and on par with New York and San Francisco.2 It is within this environmentof rapidly increasingrents,gentrification,andthe constantpressure of university expansionthat the DavenportCommonsproject was proposedin Roxbury, one of the last bastionsof affordablehousingin the city (seeMap 14.1). The Planning Process The planning processthat resultedin the constructionof DavenportCommons was extraordinarilycomplex, characterizedby periodsof vocal community opposition,numerousrevisionsrespondingto political and financial requirements,and intensepublic scrutiny.3 In 1996 the City of Bostonhad two major housing-relatedgoals: the creation of more studenthousingandthe developmentof more affordablehousing. In addition it was eagerto sell a surfaceparking lot bordering the

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Northeasterncampusthat it had beenunableto divest in previousattempts. Opinions differ on whetherthe city approachedNortheasternabout buying the land or if the university initiated the deal. Either way, the land was eventually sold to the university in a processthat project opponentscontendwas an inside political operationintendedto servethe interestsof both the city and the university, but devoid of any legitimatepublic participation. In fact Mayor ThomasMenino did discussdevelopmentpossibilitiesfor the site with Northeastern,including studentdormitories,althoughhe understoodthat studenthousingwould be contentiousin that neighborhood.This left the university scramblingto find a creative solution to accommodate more studentswithout building only dorms.According to Tom Keady, then Northeastern'svice presidentof governmentrelations and community affairs, two viablesolutionsemerged:(1) build dormitories,despitethe understandingthat the mayor would not publicly supportsuch development,and makea considerablelinkagepaymentto placatethe city; or (2) developboth affordablerental housing andstudenthousing,which would provide an internal subsidyfor the affordableunits. The university knew that it lackedthe

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capacityto handlethe complexitiesof financing an affordablehousingdeal, so it begandiscussionswith a selectgroup of nonprofit and private developers to gaugeinterestin the idea. While in hindsight this was the right approach,it generatedoppositionfrom other interestedpartieswho wantedto participatein this potentially lucrative project. At a community meeting in 1996, a Northeasternofficial inadvertently disclosedplansfor DavenportCommons,unleashingthe first wave of opposition. Negotiationshad beenongoing for about six monthswhen the community wasfinally notified of the plans,andmuchof the initial protestfocused on the lack of transparency.Somesensedthat the university thought it was doing the communitya favor. They objectedto the condescension and were skepticalthat the university would be a true partner. Somein the community maintainthat the city, throughthe BostonRedevelopmentAuthority (BRA), drafted the requestfor proposals(RFPs) for purchaseand developmentof parcels14, 14A, 15, and 16A specifically tailored to Northeastern'splan, therebypreventingany real competition.They alsobelievethat the BRA deliberatelyestablisheda short timeframe and did not adequatelypublicizethe RFPbecauseit plannedon awardingNortheastern its approval.Tom O'Malley of the BRA contendsthat while the city and Northeasternheld extensivediscussionsabout developmentoptions for the parcels,the RFP was legitimateandyielded one otherproposalfor a mixeduse developmentthat included market-ratehousing and a Walgreen'sdrug store.Furthermorethis was not the first time an RFP hadbeenissuedfor the land; previousattemptshadproducedno results.Nonethelessfew in the community were aware that the project was in the planning stagesand many were angeredover the lack of information offered to the public. On the day of the RFP deadlinein the spring of 1997, a Boston Globe article (Anand 1997) confirmedthe plansfor DavenportCommons,and the communityprotested.The perceptionthat projectapprovalhadbeennegotiatedbehindcloseddoors wasa serioussetback.In responseto the uproarthe BRA extendedthe RFP deadline. It was clear from the start that DavenportCommonswould be a complicatedundertaking,politically and financially. It was also clear that the university neededto cede a degreeof control over the developmentto local partnersin whom the community had greatertrust. In recognitionof these challenges,Northeasternchoseto work with a local community development corporationand two developerswith links to the local communityand public-sectorexperience.A developmentteam called Madison Davenport Partners(MDP) was formed to carry out the project on Northeastern'sbehalf, consistingof MadisonParkDevelopmentCorporationand HousingInvestments,Inc., and Trinity Financial, both Boston-basedreal estate

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developersand consultantsthat specializein affordable housing. After reviewing this team'sproposaland one othersubmission,the BostonRedevelopmentAuthority in 1998 designatedMDP as developerof the four parcels. Although Northeasternwas no longer the "developer" of the project, it remaineda vital force in providing its long-termvision as well as substantial predevelopmentcapital. PresidentFreelandwas deeply committed to the project and commissionedan internal teamto help ensurethe project'ssuccessful completion.4 This team'sability to navigateshifting political environmentshelpedkeep the project moving forward, and its determinationto seethe project through and its ability to handlethe numerousinternal and externalobstacleswere critical to the outcome. MadisonParkDevelopmentCorporation(MPDC) is an African Americanled communitydevelopmentcorporation(CDC) with a history of successful housing andcommercialprojects in Roxbury. DanetteJones,executivedirectorat the outsetof the project,wasan early advocatefor the project,which proved pivotal to its eventualsuccess.Jonesviewed involvement with the Davenportproject asan opportunityto exercisecontrol over whereand how the university locatedits studenthousingand as a way to increasehousing opportunitiesfor low-income householdsin their target service area of Roxbury. MPDC leaderscontributeda great deal to the developmentteam, working to build trust betweenthe local communityand the university. Trinity Financial'sexpertiselies in assemblingcomplexreal estatedeals and managingdevelopmentprojects.Trinity's solid reputationas an affordable housingdeveloperand the leadershipof firm principals Jim Keefe and PatrickLee, the latter a widely respectedAfrican Americanbusinessleader, also were critical to the successof the project andits ultimate acceptanceby the community. HousingInvestments,Inc. providedvaluableguidancein the project'searly stagesandhelpedto bring all of the necessarypartiesto the tableto negotiate a workable deal. Firm PresidentAmy Anthony, a former secretaryof the Massachusetts Executive Office of Communitiesand Development,added deeppolitical experienceand affordablehousingfinance expertise.For this project the two developmentfirms filled different roles, with Housing Investments,Inc. focusedon the strategicplanningand "deal structure"stages of theproject,andTrinity Financialinvolved throughoutasday-to-dayproject managerfor the development.The proposalenvisionedMadisonDavenport Partnersdevelopingthe site using predevelopmentfunds and debt secured by Northeastern,and then leasingthe site to the university for a thirty-year term, after which the university would acquirethe property. In the beginningthe ideaof using a teamof highly regardedlocal organizations todevelopstudentand affordablehousingon vacantland appeared

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to all involved to be a financially viable approachthat was unlikely to encounter significantopposition.FurthermoreMayor Menino andthe staff at the BRA actively supportedNortheastern'sefforts to work cooperativelywith the city's growth objectives.Nonetheless,as the projectevolved,varying degreesof opposition camefrom local governmentofficials, communityorganizationsand grassrootsactivists, and segmentswithin the university itself. Community Opposition What MDP and the city did not fully comprehendearly on was that many communityleadersand residentsbelievedthat decisionsrelatedto the future of the parcels should,as a matterof law and as a matterof principle, require their approval.Communitymemberswanteda greatersayin the processand a greaterrole in shapingchangein their neighborhood. Roxburyis a predominatelyAfrican Americancommunity,manyof whose residentshadlong felt ignoredby Northeasternand marginalizedby the city. The four vacantparcelsin questionwere the result of a city-led urban renewalprojectin the late 1960sto constructan interstatehighway.After homes were razedand former residentswere forced to find housingelsewhere,the highway was neverconstructed.Although various redevelopmentproposals were put forward over the next thirty years,none cameto fruition and the property languished.Discounting this history at the outset of the process proved to be a mistake.JeannePinado, currentexecutivedirector of Madison Park DevelopmentCorporation,put it aptly: "There is no such thing as vacantland." Land meansdifferent thingsto different people,but it is never a blank slate. Oppositionto DavenportCommons,while neveruniform, was rootedprimarily in two concerns:the community'sright to be heardandNortheastern's encroachment into Roxbury. Many perceivedthe developmentto be an institutionallandgrab.This was a particularlysensitiveissuedue to the history of the land, but also becauseit had recently been revealedthat Harvard had secretlypurchasedfifty-two acresin the neighboringcommunityof Allston. "The strugglefor affordablehomeownershipin Roxbury and the struggleto get NortheasternUniversity to stop land banking its land is an economic humanrights issue" statedPat Cusick, director of the South End NeighborhoodAction Program(SNAP) (Massachusetts Welfare Rights Union 1998). Cusick went on to file a suit, which was later dismissed,with HUD's civil rights departmentover the lack of communityprocess.As a participantin the working group that was formed to come up with a more amenableplan, Cusick would eventuallybecomepart of the solution. Communityconcernsrangedfrom issuesdirectly relatedto the designof

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the project to the threat of gentrification and displacement.Those whoopposedthe project wanted different things and few had the samemessage. Supportfor the projectcamefrom local churches,union members,and many of thoseon waiting lists for rental housing.In the face of seasonedcommunity activists, however,thesegroups'messagesrarely camethrough. The proposedproject increasedhostility toward the university but also within the communityitself. Bostonhasfew peerswith respectto the number and strengthof its CDCs, and expectationsare exceedinglyhigh. One developerjoked, "Whateveryou proposein Boston,it will neverbe enough.If you proposedthe Sistine Chapel,they'd want two Sistine Chapels."The struggle over Davenportbrought to the fore territorial disputesbetweenCDCs with overlappingtarget areas,as long-time collaboratorsfound themselveson oppositesidesof the debate.This questionof territory becameimportantbecause groups from the adjacentSouth End neighborhoodclaimed the parcels fell undertheir jurisdiction and were someof the most vociferousopponents. For its part Northeasternrecognizedthe needto negotiateissuesat a community level, as opposedto simply dealing with the mayor'soffice, and began to formulate new ways of communicatingwith the public. External oppositionwasnot the only obstaclefacing the university,however,andKeady maintainsthat at times the internal oppositionproved more difficult to addressthan the community politics. Internal Politics

Northeasternhad a long-standingset of proceduresfor managingconstruction projects,and DavenportCommonsmarkedthe first time that the university gave up control by employing outside developerswith ultimate decision-makingauthority. This arrangementinevitably challengedsomeof Northeastern'sinstitutional norms, was threateningto someinside the university, andresultedin internalopposition.Othersinsidethe universityquestioned whether the use of university resourcesto build affordable housing was consistentwith the school'smission.Vince Droserof Trinity Financial felt that the involvementof private-sectordevelopersforced the university to questionsomeof its institutional standardsand assumptions,which resulted in greaterefficiency, overall savings,and institutional learning. The academicculture is vastly different from the real estatedevelopment culture. Consequentlyexpectationsrelatedto proceduresand time lines often differed, and relationshad to be managedcarefully. When the architect's plans were presented,representatives from the StudentHousing and Physical Plant departmentsexpressedconcernthat the plans did not meet certain institutional standardsrelated to door widths, toilets, and accessibilityfor

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disabled,amongother things. Meetingsheld over the previous six months had beenopento all university departments,yet somewaited until the plans were completeto participatein discussions.Others withinthe universitycollaboratedwith the various community oppositiongroups. Internal dissenteventually reacheda point at which PresidentFreeland decidedto call a meetingto rally support.Freelandhad beenthe victim of severalvery public "smear campaigns"waged by disgruntledcommunity andresolutesupportfor the project,bothwithin residents.Yet his perseverance the university and publicly, helpedto keepit on track. Design Revisions

The initial plans for DavenportCommonscalled for 879 studentbeds, 40 rental units, 20 home ownershipunits with 20 surfaceparking places,and 1,000squarefeet of commercialspace.Many in the communityfelt the neighborhooddidn't needmore rental units since it already had a large shareof Boston'ssubsidizedhousing.They believednew home-ownershipopportunities were a way to help stabilizethe area.Other community oppositionto affordable rental housing was driven simply by a "not in my back yard" response.Once the rationalefor home ownershiphad been articulated,the wider community embracedit. The plannedrental units were convertedto home-ownershipunits and the sale prices for theseunits were lowered to increaseaffordability. Although rental units would have generatedgreater subsidy,the developmentteam recognizedthe importanceof home ownership to the communityand the university madeup the differencein cost. Throughoutthe processof public hearingsandcommunitymeetings,MDP continually revisedplansfor DavenportCommonsby making reductionsin the numberof studentbeds,increasesin home-ownershipunits andcommercial space.,and changesto the architecturaldesign.Despite attemptsto include the community in the design decision-makingprocess,it eventually becameclear that some opponentssought to paralyzethe processindefinitely. Mayor Menino issueda challengeto all the interestedpartiesinvolved to reachan agreementby a targetdeadline.His attentionand supportsent a strong signal to the community and its leadersand they did refocus their efforts. Were it not for Menino's unwaveringsupportand intervention, the project may have languished.Patrick Lee of Trinity Financial praisedthe mayor'sefforts: "In any other city, the mayor would havewalked away." Toward Resolution

At the mayor'sbehesta working group madeup predominatelyof African American civic leaderswas assembledto reacha solution.5 The group met

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every few weeksover severalmonthsto craft a proposalthat would meetthe community'sneedswhile still allowing the project to go forward. Vincent Haynes,presidentof the MPDC Board of Directors,provedto be a key influencein this group.A longtimecivic leaderandresidentof Roxbury, Haynesis highly respectedwithin the community.During a critical impasse in the working group'sdeliberations,he persuadedMel King, an influential Roxbury communityactivist opposedto the project, to attenda meetingand participatein seeking a resolution. King's involvement indicated to other community leadersthat the projecthad worthwhile benefitsand that a resolution could be found. An article in the BostonGlobe quotedTom O'Brien, former directorof the BRA, praisingHaynes,"There was a split in the community; he was able to be a biggerindividual thanjust a partisanof one side. He pulled all the leaderstogetherand causedthem all to say, 'How do we find a way?' It was his stature,his long-termactivism, that causedpeopleto cometogether"(Radin 1999, Bl). The group proposeddividing the parcelsin half, allocating equal land for 125 units of studenthousing (accommodating595 students,a significantreductionfrom the total of 879 that was first proposed)and 75 owneroccupied townhouseunits. The plannedhome ownership units were for moderate-incomefamilies, a difficult group to servein constrainedhousing marketssuchasBoston's,sincethereis little federalor statemoneyavailable to servethis group.An internalsubsidyfrom studentrentswas usedto bridge the funding gap for the home-ownershipunits, a strategythat increasedsupport for the project. The 50150 split of the land was generally acceptedand becamehighly symbolic for the communityas a way to reclaim the land for public benefit. While the division of land was comforting to many, someremainedhighly skepticalof Northeastern'smotives and feared that studentswould occupy the home-ownershipunits. When it becameclear that the site could accommodateonly sixty units of communityhousing,the partnerslooked for more land on which to build additional units; a reductionin units certainly would havemet resistance.FortunatelyMPDC owneda small parcelnearbyand it becamethe site for fifteen units, known as ShawmutEstates,thus avoidinga reductionin the agreed-uponnumberof seventy-fiveunits. The long developmentprocessgenerateda numberof additionalchanges to the scopeof the project. For example,in the original design studentand community housingwas intermingledin one unified development.As a result of communityinvolvement,a new plan separatedstudenthousingfrom the community home-ownershipunits, creatingtwo distinct living environments. In addition to changesin the mix of unit types, the building height was increasedbut the overall density of the studenthousing was reduced. o

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Throughits attemptsto gain community approvalfor DavenportCommons, the universityultimately madeseveralconcessionsbeyondthe scopeof work at Davenport.Northeasternagreedto releaseto the community a list of all the propertiesit owned and to producea community-approvedareamaster plan prior to acquiring more property (Walsh 1998). The DavenportCommonsdesignprocesswas extensiveandinvolved more stakeholdersand more complexnegotiationsthan the university originally anticipatedor had dealt with on previousdevelopmentprojects.Despitethe numerousdelaysthat resultedfrom this level of communityparticipation,Keady believesthat as a result both the project and the university were strengthened. Project Financing At the sametime as the negotiationsrelatedto design, scale, andprogramming mix were taking place with the various stakeholders,the project'sfinancingpackagewas being crafted.BecauseDavenport'smix of affordable andstudenthousingwas a first in Massachusetts andthe country,noneof the traditional affordable housing or studenthousing developmentfinancing sourcesimmediatelyfit the project.The developmentteam,which hadworked with Massachusetts HousingFinanceAgency (MHFA) whenDavenportwas being plannedas affordablerental housing,had to convinceMHFA to consider financing a studenthousing and home-ownershipdeal, somethingit had neverdonebefore.Oncethe developmentteamconvincedMHFA of the innovative nature and economic viability of the project, however, MHFA saw the Davenportmodel as a pptentialsourceof new businessandmovedto broadly interpret its charter in order to include studenthousing, thus enabling the agencyto participatein the project. To finance DavenportMHFA issued501(c) (3) bondson behalfof Northeastern,a nonprofit organization.The proceedsof thesebonds($33,171,000in tax-exemptdebt) was loanedto the project, along with $4,757,000in shorter term taxabledebt.The projectalso signeda thirty-yearleasewith Northeastern for the studenthousing portion, which effectively guaranteedthe 501(c) (3) bonds. This feature of the deal exposedNortheasternto some risk but allowed the project to benefit from lower interestrates.In addition Northeastern provided a significant contribution of $1,850,000to cover up-front predevelopmentcosts. Northeastern'sfinancial strengthproved critical to the deal. Without the university'sability and willingnessto guaranteethe 501(c) (3) bonds and to make a substantialequity contribution, it is unlikely that the project would ever have been completed.Finally, a variety of federal and local governmentgrants,gapfinancing, andproceedsfrom the saleof home-

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ownershipunits combinedto make up the remainingfunds for the project (seeAppendix14.1). The involvement of Trinity Financial and Housing Investmentsproved invaluable during the financing and deal-makingstages.Northeasternhad traditionally financedits developmentsin far more conventionalways and therefore lackedexperiencedealing with the numerousfederal, state, and city funding agenciesthat contributedto the project. The two firms were seasonedveteransof complexlayeredfunding andcommunitycoordination. The generalstructureof the transactionwas complex.The deal was structuredto haveMDP serveas developerof both the studenthousingandhomeownershipunits, but grant Northeasterna large degreeof control over the studenthousingdevelopmentwith the university acting as neitherownernor developer.In order to accomplishthis, the parcelsof vacantland to be used for studenthousing were acquiredfrom the BRA by MPDC, which then transferredthe land to Northeasternand developedthe studenthousingunder the direction of MDP and in closeconsultationwith Northeastern.Once completed,Northeasternowned the land, which it leasedto MPDC for a term of thirty yearsandMPDC ownedthe studenthousing,which it leasedto the university for thirty yearsfor an annualamountequal to the tax-exempt debtpayments.At the end of thirty years,oncethe tax-exemptdebt hasbeen paid off, MPDC will sell the studenthousingportion to Northeasternfor $1, giving the university control of both the land andthe studenthousing.On the home-ownershipside,MDP acquiredthe vacant landdirectly from the BRA, developedthe units, and sold them to buyersselectedin accordancewith an agreementwith the community. Construction and Occupancy

Constructionbeganin October1999andby spring2001 the home-ownership units were ready for occupancy.Demandfor the units was so great that a lottery was implementedto determinewho among the almost 700 applicants would be chosen.Eligible applicantshad to meet strict income requirements and owners agreed to restrictions governing rental and occupancyof the units.6 Resaleconditions, an increasinglycommon provision in tight housing markets,were also instituted.Homesmay be sold only to buyersin the same incomebracketunderwhich the seller qualified. In addition the value of the homecannotincreaseannuallyby more than 5 percent.Pricesfor the homes rangedfrom $85,000to $225,000.1MPDC helpedthe homeownerssetup a condominiumassociationand provided technical assistanceand first-time home-buyereducation.

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Studentsmovedinto DavenportCommonsin fall 2001.The units accommodatethree to six studentsand include bedrooms,bathroom,kitchen, and commonliving area.The responsefrom both the community and students hasbeenuniformly positive. Outreachand cross-programming betweenstudentsand home ownershas resultedin open communicationand generated heightenedrespectamongstudentsfor the surroundingcommunity.The addition of high-quality housing close to campushas enhancedthe housing options availableto Northeasternstudents.

LessonsLearned There are certain factors, including the strengthof community developmentorganizationsandthe tight housingmarket,that are particularto Boston and thereforeunique to how the developmentof DavenportCommons unfolded.The combinationof thesefactors will not necessarilybe present in university-sponsored developmentprojectstaking placein other parts of the country. However, many of the factors that influenced the Davenport developmentdo exist in other locationsand as a resultthere are many broad lessonsthat can be learned.

StrongLeadershipIs Critical During the developmentof Davenport,the leadershipat NortheasternUniversity was deeply committedto developinga strongerimage and standing for itself in Boston'scompetitiveand politically chargedinstitutional community. As a meansof achievingthis, the presidentand key staff members mappedout long-rangegoals and identified key advocatesto marshal the school'sresourcestoward achieving its goals. In addition to President Freeland'sunwaveringsupport,this project benefitedfrom the stewardship of Tom Keady ratherthan simply the oversightof an in-houseconstruction manager.Equally important was the strong supportof Mayor Menino and the BostonRedevelopment Authority.

Find Partnerswith ImportantSkills andRelationships Outside consultantswere chosenspecifically for the value of their preexisting relationshipsin local governmentand embeddedcommunity organizations,and they played key roles in bridging the gaps betweenthe university and community.Thesepartnershipsbenefitedthe schoolin several ways: by providing accessto respectedcommunitymemberswho were key to gainingbroadsupport;by diffusing oppositionby spreadingresponsi-

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bility for developmentamong multiple parties; and by providing funding and regulatory agenciesa basis for confidencein an untried development model. The developmentteam also identified and allied itself with influential neighborhoodleaderswho were able to bring opponentson board.The involvementof thesecommunityleadersbroughtcredibility to a project that originally was viewed with suspicion.

Financial Strengthand Long-Term Vision Are Key Northeastern'sfinancial strengthand stability providedthe developerswith what was for them an unusualopportunity-thepossibility of financing the constructionof moderate-incomehomes through bonds issuedagainstthe school'sstrong credit rating. Like many urban universities,Northeastern's long-rangesuccessis strengthenedby the healthof the residentialcommunities that surroundthe school and their mutually supportiverelationship.This reality helpedshapethe strategicdecisionto createhome-ownershipopportunities for local residentsratherthan using the vacantland entirely for student housing.The seventy-fivenew home-ownershipunits benefitthe universityby helping to weavethe surroundingneighborhoodand university togetherand by demonstratingthe university'ssincereeffort to be a good neighbor.

Create"Win-Win" Outcomes Virtually all of the Davenportstakeholderswere able to claim success.The university addednearly 600 bedsto its strainedinventory; the city successfully disposedof long-underusedparcelsof land in a mannerthat helpedthe city's affordablehousingproblem; and the local residentswon a numberof concessions, including home-ownershipratherthanrentalunits, a lower overall density, and greatertransparencywith respectto the university'Smaster plan. While it was not an easyprocess,the fact that all involved were able to claim somelevel of victory allowed the project to be built and will make it easierfor Northeasternto pursuefuture developmentin the area.

Appendix 14.1.GeneralStructureof the Transaction The DavenportCommonsproject was structuredin the following manner: • Madison ParkDevelopmentCorporation(MPDC) acquiredthe title to the studenthousingportion of the property(vacantland) from the Boston Redevelopment Authority (BRA) and transferredit to Northeastern University. Northeastern,as owner of the studenthousing portion of land, then leasedit to MPDC througha thirty-year groundlease.

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• MPDC, Trinity Financial,and HousingInvestments,Inc., jointly called Madison DavenportPartners(MDP), developedthe project according to agreed-uponterms and specifications,limiting the developmentrisk to Northeastern. • The completedstudenthousing building is owned by MPDC, which rentsit to Northeasternaccordingto a thirty-yearstudenthousinglease. Debt paymentsmade by MPDC to MassachusettsHousing Finance Agency are equal in rent to the amount Northeasternpays to MPDC. The studenthousingis committedto remain studenthousingas long as the 501 (c)(3) bondsare outstanding. • As a tenantleasingthe studenthousingfrom MPDC, Northeasternparticipatedas a client in the developmentprocess.A university representative went to weekly job meetings,approvedchangeorders, and provided a ten-daypunch list at completion, which MPDC, as owner, was responsiblefor satisfying. • When the thirty-year leaseexpires,Northeasternwill acquirestudent housingfor $1 from MPDC, which will give it ownershipof both the land and the building. • MPDC also acquiredfrom the BRA parcelsfor home-ownershipunits, which MPDC developed,with the assistanceof MDP, and sold to buyers selectedby lottery in accordancewith a community agreement. Notes 1. This numberrefers to Bostonproperand doesnot include Cambridge.In the 2000 Census,Boston'stotal populationwas 589,141.Available at www.census.gov. 2. According to a report by the NationalLow-IncomeHousingCoalition (2003), Bostonis the fifth leastaffordablemetropolitanstatisticalarea. 3. Communityis usedthroughoutto describe oppositionor supportfrom outside the university,its partners,or the city. However,it shouldnot be interpretedas a unified voice of dissentor supportas therewere variousfactions within the community. 4. The Northeasternteam includedTom Keady, then vice presidentof government relations and community affairs, and membersof the Administration and FinanceOffice including LaurenceMucciolo, senior vice president;JosephMurphy, treasurer;Vin Lembo, vice presidentfor university counsel;Jeff Doggett, assistant directorof governmentrelationsandcommunityaffairs; and variousmembersof Facilities Management. 5. Working group membersincludedPatrickLee, principal of Trinity Financial; JeannePinado, Madison Park executivedirector; State SenatorDianne Wilkerson; StateRepresentative Byron Rushing;PatCusickof SNAP; SyvaliaHyman,president of United SouthEndILowerRoxburyDevelopmentCorporation;andVincentHaynes, then presidentof MadisonPark'sBoard of Directors. 6. ShawmutEstate'sfifteen units were for householdsat or below 80 percentof the areamedianincome(AMI). Thirty-sevenof the Davenporthome-ownershipunits

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were also set asidefor families at or below 80 percentof the AMI; elevenunits were reservedfor thoseearning81 to 120 percentof AMI and the remainingtwelve were for thoseearning121 to 175 percentof AMI. Accordingto HUD, AMIfor a family of four for the BostonMetropolitanStatisticalArea was $82,600in 2004,but at the time the units were sold it was approximately$66,000. 7. In 2001 the medianpricefor a condominiumin Roxburywas$287,000(Pikounis 2001).

References Anand,Geeta.1997.Northeasternplancombinesdorms,communityhousing.Boston Globe, May 2: AI, A19. Bluestone,Barry, CharlesC. Euchner,GretchenWeismann,andCenterfor Urban and RegionalPolicy. 2001. A new paradigmfor housing in Greater Boston. Boston: NortheasternUniversity. RevisedEdition, February. Klenotic, Deborah.2000. Granddesign:The new masterplan. NortheasternUniversity Magazine,January.Available at www.numag.NU.eduJOOOllcampus.html. Massachusetts Welfare Rights Union. 1998. PressRelease,May 29. NationalLow-IncomeHousingCoalition. 2003.Out of Reach2003:America'sHousing WageClimbs. September.Available at www.nlihc.org/oor2003/. Pikounis,Aglaia. 2001. Developmentmixesaffordable,studenthousing.Banker& Tradesman, October 1. Available at www.bankerandtradesman.comlpub/3_42/residentiall 108393-1.htrnl. Radin,CharlesA. 1999.Roxbury'squiet hero; Behindscenes,Haynesa proudpeacekeeper.BostonGlobe, January14: B1. Tong, Kathryn. 2000. Campuscrisis: Thousandsof studentreturningto areacolleges scrambleto find housing.BostonGlobe, August 20: HI. Walsh, Christine. 1998. DavenportCommonsa donedeal. Projectto provide student beds, home ownership. NortheasternNews Online, December2. Available at www.nunews.NU.edu/nu-news/Issues/120298/n1.html.

Interviews Amy Anthony, President,HousingInvestments,Inc. October25,2001. Jeffrey Doggett,AssistantDirector, Office of GovernmentRelationsandCommunity Affairs, NortheasternUniversity. March 1,2002. Vince Drosser,Vice President,Development,Trinity Financial.November28, 2001. Vincent Haynes,long-timecommunityresidentandformer Boardof Directorschairman, MadisonParkDevelopmentCorporation.February8, 2002. Tom Keady, AssociateVice Presidentfor Governmentand Community Relations, BostonCollege.June7, 2002. PatrickLee, ExecutiveVice President,Trinity Financial.February21, 2002. Tom O'Malley, BostonRedevelopment Authority. February26, 2002. JeannePinado,ExecutiveDirector andDavid Price,Directorof RealEstateandGeneral Counsel,MadisonParkDevelopmentCorporation.November9,2001. RobertPyne,Directorof RentalDevelopment,Massachusetts HousingFinanceAgency. February22, 2002. DianneWilkerson, Massachusetts StateSenator.April 11, 2002.

15 Campus Partners and The Ohio State University A Case Study in Enlightened Self-Interest David Dixon and Peter J. Roche

The Ohio StateUniversity (OSU) is a public university with growing national statureas a centerof learningandresearch.Locatedabouttwo miles north of downtown Columbus,OSU becameincreasinglyconvincedduring the 1990sthat it neededto addresspreviousdisinvestmentin the neighborhoodsaroundits campus,both to protect its ability to attract students, faculty, and staff and to fulfill its historic mission of public service as a land-grantinstitution. The university has along tradition of civic engagement: it is the largestemployerin Columbus;the campusaccommodates a combinedstudent,faculty, and staff populationof almost 50,000 (greater than the city's downtown workforce); as a land-grantuniversity it is interestedin shifting its traditionalpublic servicefocus from agriculturalissues to urban problems;and large numbersof its alumni occupyleadershippositions in local government,business,and civic affairs. This chapterdescribesa commitmentto communityrevitalizationthat emergedin the first half of the 1990s, took shapeand matured in the latter half, and continuesin full force in the early twenty-first century. This accountalsoprovidesanalysisof two significantuniversity-sponsored community redevelopmentprojects now under way: the South Campus Gateway,a mixed-usedevelopmenton High Street,the university district's principal "Main Street"; and the Broad StreetRevitalizationInitiative, a neighborhoodhousing plan. Theseactivities have moved the university into a position of far greaterengagementwith the economic,social, and physical qualities of the surroundingdistrict and to the forefront nationally of educationalinstitutions that have involved themselvesin community revitalization. 268

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Map 15.1 Ohio State University District PORTFOLIO PORTFOLIO

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Planning Context OSU sits in the centerof a university district borderingHigh Street,which definesthe easternedgeof the campusandis a primary artery for the city of Columbus.Across High Streetis a highly diversemix of shops,bars,entertainmentvenues,and food businesses.The university district itself extends along High Streetfor roughly one mile to the north and southof the campus (seeMap 15.1).

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High Streetflourishedasa university-andcommunity-orientedMain Street for more than four decadesbeforeWorld War II, a period when university enrollmentgrew from fewer than 10,000to more than 25,000. By the late 1920sHigh Streetwas known as one of the liveliest commercialdistricts in Columbus,andits growing arrayof shops,entertainment,and servicestransformed the street into a highly popular center for OSU's community life. SinceWorld War II, however,OSU, like many urban universities,has seen the neighborhoodsaroundits campuschangedramatically.Middle-classfamilies movedto the suburbsandthe businesses andservicessupportedby those families largelyfollowed. Initially studentsandlower-incomeresidentsmoved in, but by the 1980sstudentsbeganto abandonthe district as well. In the 1960sthe paceand extent of changealong the streetbeganto be visible, and the university'Sreactionfurther acceleratedthe neighborhood's decline. Unnervedby rioting along High Street in protest of the Vietnam War, the university consciouslybeganto closeitself off from the streetand adjacentneighborhoods,severingdirectvehicularconnectionsfrom the neighborhoodsinto the campus.The most symbolic and devastatingclosing was of 15th Street,the traditional front door of the campusfor the largerColumbus community. The university closedthe streetand then sited a new performing arts centerin sucha way as to cut off muchof the visual connection betweenthe campusand High Streetand the rest of the university district. With bunker-like plantersand service docks, the arts center-andOSUabruptly turned its back on High Street.Extensiveinvestmentin landscaping, streetscape improvements,new buildings,andotherfacilities intentionally shifted the campus'sfocus west toward Route 315. At the end of the twentiethcentury,OSU turnedits attentionto raising its nationalstatureas a major public university, but a seriesof highly troubling trendsbeganto undermineits ambitions: • The university community-students,faculty, and staff-left the university district in large numbers.By the mid-1990smore than 70 percent of studentsowned cars, comparedwith roughly 10 percentin the 1970s, and more than 60 percentof undergraduateand graduatestudentslived outsidethe district. Many otherstudentsincreasinglysought on-campushousing. peopleof • A mix of studentsandlow-incomeresidents-predominantly color-replaceddepartingmiddle-classfamilies, who had beenlargely white. In the wake ofthe studentexodusin the 1980s,the southeastern quadrantof the university district came to houseColumbus'shighest concentrationof Section 8 housing. Home ownershipin the district droppedfrom 50 percentin 1950to roughly 12 percentby the late 1990s.

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• Concernedthat its downtown was losing jobs and tax revenueto increasinglyambitioussuburbanoffice parks,the city convertedHigh Street into an arterial to enhanceaccessibilityfrom northernsuburbs,removing curbsideparking essentialto retailersand closing streetsthat connectedresidentialneighborhoodsto High Street. • As disposableincomealongHigh Streetdeclinedand suburbancompetition exploded,the streetlost mostof its anchorretailers.Smallerretailers movedout, andstrip retail beganto replacetraditionalpedestrian-friendly retail to the north and southof the campus. • Crime becamean increasingconcern,particularlyeastandsoutheastof the campus,acceleratingthe departureof studentsandlong-timeresidents.

Why the University ChangedCourse In 1992 OSU inaugurateda new president,Gordon Gee, formerly a senior administratorat Brown University. Brown had benefitedgreatly from the "renaissance"of Providence'sCollegeHill neighborhood,a resurgencethat had spreadacrossthe downtownand had madethe city an exciting placeto live, work, shop ... and study. PresidentGee often remarkedthat when he was being introducedto OSU his guides were very selectivein the routes they took onthe way to the campus,avoiding the universitydistrict. Within a year PresidentGee took a strong leadershipposition, urging the university and the city to launch a comprehensiverevitalization strategyto "stem the tide of neglect" acrossthe university district. He cited five key reasons:

• Respondingto rising crime. The 1994kidnappingandmurderof a firstyear studentone-halfblock from High Streetreceivednationalpublicity. Geestressedthat the university could not guaranteethe safetyof its community without addressingcrime in the larger community. • Enhancingstudentquality of life. As studentssoughtsuburbanapartmenthousingmiles from campus,the universitywaslessableto present itself as a vital living and learningcenter. • Attracting top studentsandfaculty. OSU's academicplan envisioneda place amongAmerica'stop ten public universities.Increasingly,however, alumni and the admissionsoffice reportedthat high-performing potentialstudentswere declining admissionoffers becauseof the environmentaroundthe university. • Living up to OSU'smissionas a land-grant institution. Gee advocated shifting the university'spublic involvementfocus from the traditional agriculturalconcernsof a land-grantuniversity to social, economic,racial, and other issues.

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• Breaking the cycle of neglect. Gee arguedthat if the university did not intervene,theuniversitydistrict'sproblemswould only grow steadilyworse.

Forming Campus Partners PresidentGeelauncheda seriesof discussionsandwasinstrumentalin bringing aboutearly decisionsthat setthe stagefor the formation of CampusPartners. While leadersin the community, city, and university all saw the need for revitalization, no leadershipfor this effort had emerged.To addressthis lack, the presidentadvocatedthat the university form a partnershipwith the city, with the university taking the leadin planningandfunding. Geeworked with community leaders,many of whom were deeply suspiciousof the university'smotives and who were quick to point to a recordof community removal rather than revitalization. He convincedthem that OSU was committed to an inclusive planning process,to improving quality of life for all residents,and to supportingthe needsof businessesalong High Streetand elsewhere.As evidenceof that commitment,he setup a taskforce to shapea strategy and included membersfrom acrossthe university community, as well as neighborhoodand city representatives. The task force considereda wide rangeof options,from direct university participationin revitalization efforts to creation of a for-profit entity independentof the university.The taskforce recommended the formationof Campus Partnersfor Community Urban Redevelopment under an Ohio statute that confers on "community redevelopmentcorporations"a wide range of public powers-mostnotably the ability to carry out eminent-domaintakings. The taskforce determinedthat the university would provideessentially all funding and that it would appointa majority of the board; the othermembers would be city and communityrepresentatives. The task force found many argumentsfor establishinga new entity: • The revitalizationshouldbe led by an entity with a clearly definedmission and full-time staff dedicatedto this task. Flexibility and effectivenessin conductingplanningandreal estatedevelopmentactivitieswould also be key, and the university itself could not provide that expertise. • Clear authority for making decisions,independentof the very collegial decision-makingprocessof the university, would be critical. • Distancefrom theuniversity structurewould beimportant,both to shield OSU from potentialcontroversyand to inspire communityacceptance. While PresidentGeehad allayedmuch of the concernamongcommunity organizationsaboutthe university'sintentions,OSU remainedassociatedin the public mind with the wrecking ball.

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• Despite the need for distance,it would be equally important to take advantageof the university'srelationshipswith alumni who constituted so much of the political, business,and civic leadershipof Columbus andcentralOhio, andto conveyinstantcredibility andleveragewith the city and with major agenciessuchas the U.S. Departmentof Housing and Urban Development(HUD). • Finally, CampusPartnerswould needto live up to private-sectorexpectationsby playing the dual role of the redevelopmentauthority (assembling land and handling relocation, demolition, and environmental cleanup)andthe sourceof "patientcapital" (taking early risks relatedto planningand marketstudies,land purchases,etc.). Incorporatedin January1995, CampusPartnersfor Community Urban Redevelopment waschargedwith developinga comprehensive neighborhood revitalization plan and implementationprogramfor the university district. CampusPartners'mission extendedto engagingin seriesof quality-of-life initiatives that includedenhancingdelivery of public services;implementing a university-sponsoredhome-ownershipinitiative; and promoting another initiative (CampusCollaborative)for improving education,employment,and healthservice.The staff of five was led by a presidentwith a notablerecord in public- and private-sectorredevelopment,and it included professionals with development,public relations,andcommunityoutreachexperience.OSU committed$3 million in initial operatingfunds, followed by a $25 million investmentfrom the university endowmentfor direct real estateinvestment purposessuchas land assemblage. The university expectedlong-termfinancial rewardsas well as other benefitsfrom this larger investment,but with minimal returnsfor at leasta decade. Launching Campus Partners . .. and Meeting the Other Players

CampusPartnersalmost immediately selecteda consultantto preparean encyclopedic,district-wide compendiumof neighborhoodrevitalization programsand strategies.The University NeighborhoodsRevitalization Plan: ConceptDocument,completedin late 1996, was officially adopted by both the university and the city as the basis for further planning and revitalizationactivities. Controversymarkedthe ConceptDocumentplanning process,however,making it clearthat even thoughthe CampusPartnersmodel might be inherentlysound,the organizationneededto develop far more effective approachesto community outreachand planning to achieveits goals.

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First, CampusPartnersneededto learn more about other key players and to develop working partnershipswith local residents,businessowners, the City of Columbus,and local propertyownersand developers.The highly diversegroup oflocal residents-includingSection8 tenants,longterm residents,newerhomeowners,students,andothers-hada wide range of sometimesconflicting goals.They did not necessarilyset a high priority on the kinds of university-orientedbusinessesthat CampusPartners' initial leadershipenvisioned.Insteadthey focusedon enhancedservices and neighborhoodretail establishments,historic preservation,avoiding universityexpansioninto the neighborhood,neighborhoodpolitical issues, and other concerns. The city's planningprofessionals,meanwhile,recognizedthat they needed to inject public-sectorconcernsinto the planning process,including economic developmentgoals such as fiscal benefits and job creation; district design guidelines comparableto those developedin other neighborhoods; and troubleshootingto preventpolitical problemsrelatedto issuesraisedby otherstakeholders.Finally, housingdevelopers, whileinitially very supportive, grew concernedabout competition from new development,possible eminent-domaintakings,and accessto potentialdevelopmentactivities.The perceivedlack of a community-basedplanning processand the wide range of issuesraised by the initial planning effort combinedto bring early momentumto a halt by the end of 1996. In early 1997CampusPartners'first presidentresignedandwasreplaced by Terry Foegler, who has planning and developmentexperiencein both the public and private sectors.He madetwo critical decisions:(1) to lead with more community-basedplanning and to let decisionsreflect that broaderinvolvement;and (2) to stepbackfrom a district-wide approachto implementationand proceedwith a seriesof sequentialprojectsthat could be reasonablysupportedby community-basedplanning and more readily backedby the stakeholdersidentified above in addition to the university itself. Foegler decidedto start by focusing on decline along High Street. After looking at both local andnational examples, including the ShortNorth and GermanVillage districts in Columbusand "LoDo" in Denver, Campus Partnersoutlined a strategyin which the amenities,jobs, and servicesof a revivedMain Streetwould attractstudents,faculty, staff, and otherresidents back to the district while creating a high-profile symbol for the university and the district. Following a national search,CampusPartnershired Goody, Clancy & Associates(GC&A), a Boston-basedplanning and designfirm, to createa vision andstrategyfor revitalizing High Street.Leadinga teamof real estate, retail development,transportation,and historic preservationconsultants,

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GC&A worked closely with CampusPartnersover a two-yearperiod. Two aspectsof this processwere critical to its success:effective communityoutreachand a developmentstrategythat blendeduniversity, city, and privatesectorcapabilitiesand resources. Outreachbeganwhen CampusPartnersconvenedan Advisory Steering Committeechairedby the executivedirector of the University Community BusinessAssociation.The inclusion of many voices both lengthenedand strengthenedthe public process,building into the resulting vision and strategy a strongsenseof community,city, and university ownership,as well as strengtheningfinancial feasibility. The final plan wasforged during five days of continuousmeetingswith the steeringcommittee.The larger community was kept informedthroughregularcoveragein a monthly newspaperfor the university district, the businessassociationnewsletter,and the Columbus Dispatch. The consultantsand CampusPartnersstaff madefrequentpublic presentationsto university staff and neighborhoodgroups,andCampusPartnersmaintainedan openoffice whereit regularly briefed students,residents, and other visitors. The developmentstrategycombinedcomplementaryroles for the university, the city, and the private sector.The team'sreal estateand retail consultants affirmed projectionsthat the right combinationof university, city, and private investmentcould unlock considerabledemandfor retail, entertainment, housing,and services.The consultantsidentified demandfor roughly 1 million squarefeet of new spacein existing andnew buildings along a twomile stretchof High Street.The strategyfocusedon: • forming a parking authority through a partnershipjoining the city, the university, and local property ownersand businessesto respondto the area'ssevereparking shortage; • establishinga special improvementdistrict with seedfunds and staff provided by CampusPartners,but ultimately supportedby property ownersand businesses,to insure that High Streetremained"clean and safe" and to lead private-sectorinitiatives; • preparing developmentand designguidelinesfunded by CampusPartners and officially adoptedby the city to preservethe street'slively, often historic character; • offering facade- and building-improvementincentivesshapedby the guidelines;funded by the city, the university, and private sources;and supportedby city-fundeddesignservices; • initiating strategicredevelopment projects,including a major mixed-use "destination,"to be known as SouthCampusGateway,to anchorrevitalization togetherwith additional strategicredevelopmentefforts; and

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• enhancingthe public realm throughmorethan $5 million in streetscape and similar improvements,funded by the city in responseto the plan and in accordancewith the vision and guidelines.

Structuringa Redevelopment Strategy:Community Developmentas EnlightenedSelf-Interest Two CampusPartnersprojectsillustrate the risks and opportunitiesassociated with the assumptionof direct responsibilityfor community-basedreal estatedevelopmentby universities. The first, South CampusGateway,is a 500,000-square-footmixed-use centerbetweenthe university'slaw schooland the neighborhoodEmpowermentZone. It representsan attemptto transformthe imageand substanceof a marginalcommercialdistrict that hasservedas a primary gatewayto campus for generationsof studentsand faculty. The second,the Broad Street RevitalizationInitiative, representsan equally bold foray into communitybasedreal estatedevelopmentby acquiring, renovating, and repositioning 1,385 units of severelydistressedlow-incomehousing.Despitestriking differencesbetweenthesetwo projects,certain clear lessonsemergefrom the attemptsto transform adistressedurban neighborhood inthe name of enhancingthe university settingand sparkingregionaleconomicdevelopment. SouthCampusGateway The centerpieceof the High Streetrevitalization strategy,South Campus Gateway,representsthe culminationof more than five yearsof planning, public participation,and site assemblage.Designedas a bridge from campus to community and firmly rooted in the principles of comprehensive urban development,the 500,000-square-footcenter mixes retail, office, and residentialuses.Anchored by a Barnes& Noble College Bookstore and 70,000 squarefeet of OSU office space,it servesas a unique, highquality destinationfor more than 70,000peoplewho live, study, work in, or visit OSU neighborhoodseach day. By mid-2003, with retail tenants committedand other project elementsin place, the site had beencleared and the project was moving throughfinal design;constructionwas scheduled to begin in spring 2004. To reachthis point, CampusPartnersneeded to learn a seriesof lessonsabout the role it could and should play in the developmentprocess. Basedon a presumptionof market interest,the scaleand complexity of the developmenttask, and the university'spreferencefor avoiding exposure to marketrisk, CampusPartnersissueda nationwideRFPfor firms interested

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in developingthe proposedcenter.The RFP processinvited leading design and developmentfIrms to proposea variety of uses,capital structures,and designcharacteristicswithin the guidelinesestablishedfor the projectby the planning process.An experiencedfIrm with a national reputationfor creating urbanmixed-usecenterswas selected. From the start,however,tensionsbeganto appearbetweenthe university's own design, public benefIt, and fInancial goals and the developer'sinvestment objectives.Upon being designated,the developerlauncheda detailed assessment of Columbus'soverbuilt retail market and at its conclusionadvised CampusPartnersthat OSU would needto take additional stepsto ensure the economic successof the development.These extra steps-from subordinationof the university'sgroundleaseinterestin the land to acquisition of a collegebookstorein order to attracta nationalbookstorechain as a retail anchor-raisedfundamentalquestions aboutthe fInancial viability of the proposalunder the private developmentmodel. Perhapsmore signifIcant, the recommendationsforced the university to reexamineits fInancial expectationsfor the development. The diffIculty of assuringadequatefInancial returnon land andimprovements is hardly news to fIrms engagedin urban real estatedevelopment, particularly for projects that must achieve signifIcant public purposesin inner-city locations.Assemblingmultiple, privately owned parcels,relocating businessesand remediatingexisting conditions all can drive land costs above the residual land value associatedwith proposedimprovements.In this caseit becameclear that a $20 million investmentin site assemblywas not the only cost the university would have to assume.OSU would needto defer and deeply subordinateits investmentreturnsand security in orde to achievethe developer'syield expectationsand to attractprivate capital. Facedwith this challenge,CampusPartnersbeganto explore alternative models: turnkey development(hiring a fIrm to developthe property with a guaranteedprofIt, althoughOSU would own the fInished project); various joint-venturestructuresuniting the university and a private developer,which would open the door to a substitutionof university investmentfor private debt/equitycapital; and OSU serving as owner/developer,with an outside fIrm overseeingdevelopmentfor a fee. CampusPartnerssaw three advantagesin thesealternatives: • maximizeduseof universityresources,particularly resourcesthat were not considered"scarce"(i.e., debtlbondcapacity); • protection of the university'spublic-purposegoals for the project, including the mix of uses,the quality of design,and the achievementof economicdevelopmentgoalsfor the community; and

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• more accuratereflection of the respectivecontributionof eachparty in allocating investmentbenefitsand generatingfee revenuefor Campus Partners. With these alternativesunder consideration,the university found itself taking on tasksthat normally fall to a developer.In its attemptsto attract a major bookstoreas a retail anchorfor the development,for example,OSU took the unusualstepof acquiringan off-campusbookstorewith a dominant sharein the local textbook and booksellersmarket and with extensivereal estateholdings in the commercial district. Further, the university entered into an agreementthat madeBarnes& Noble College Bookstoresthe sole operatorof all campusbookstores.Finally, CampusPartnerssuccessfully procured approximately $15 million in public subsidies(including taxincrementfinancing) to underwritesignificantpublic improvements,including a parking garage.ThesestepspersuadedBarnes& Noble to sign a longterm leaseas a tenantat SouthCampusGateway. If the university was acting in many ways as a developer,what was the advantageof continuing to work with-and subordinatingthe university's financial intereststo-a masterdeveloper?In resolving this question,Campus Partnersdecidedto assumethe role of owner/developer,subject to a contractwith a third-party fee developer.This decisionreflectedthe increasing commitmentand capacityof CampusPartnersand struck a more appealing balancebetweenthe university'slong-termexpectationsand the realities of the marketplace.

Broad StreetPortfolio Revitalization In its acquisition,redevelopment,and repositioningof 1,385 scatteredunits of distressedlow-income housing, CampusPartnerstook on an even more unusualproject.The propertiesin the BroadStreetportfolio comprisedmore than 240 buildings scatteredacrossthe city's East Side that were home to nearly 1,000young single womenwith childrenand a medianincomeofless than $6,000.The revitalization of thosehomeshad a pronouncedeffect on the climate for reinvestmentwithin university neighborhoods. The impact on the university district of the distressedportfolio, together with the destabilizingeffects of high concentrationsof off-campusstudent housing,cannotbe overstated.Sincethe assemblyof the Broad Streetportfolio by a private developerin the mid-1970s,university neighborhoodshad watchedas home ownershipdroppedand crime rose dramatically. Unchallenged, thesetrends threatenedto underminethe economicviability of the revitalizationstrategiesproposedby CampusPartners,including SouthCampus Gateway.

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Like most institutions engagedin direct developmentwithin urban communities, CampusPartners'first inclination was to avoid active redevelopmentof theportfolio in favor of a morepassiveadvocacyrole. A HUD proposal to changethe contractrents paid for units in the portfolio, however, was a clarion call to action. The changewould have set rents at levels far below what was neededto supportquality assetmanagement,jeopardizedthe financial stability of the portfolio, and precludedrehabilitation. Acting just weeksbeforethe mandatoryimposition of this "mark to market" restructuring plan and a thirty-year contract extension,CampusPartnersengaged PeterJ. Rocheto explorealternativedirectionsfor the portfolio and to negotiate an option agreementto acquirethe thirteenpartnershipsthat constituted the Broad Streetportfolio. The interventionby CampusPartnersradically changedthe political dynamic in the university neighborhoodsby galvanizingdozensof civic and communityorganizationsto becomeinvolved in the proposedrestructuring. A nine-monthdeferralof the restructuringplan enabledCampusPartnersto conductdue diligence, consult with residentsand other stakeholders,raise capital, and proposean alternativevision for the restructuring.In June2001, in collaborationwith the ColumbusEmpowermentZone,the City of Columbus, anddozensof communitygroups,CampusPartnersunveiledan alternative proposalfor revitalizing the Broad Streetportfolio, including: • preservationof 1,385 subsidizedhousingunits, togetherwith an unprecedentedrelocationof up to 500 of themto lessdistressedneighborhoods; • a dramaticincreasein the proposedscopeof rehabilitationwork (from $1 million to $37 million-sufficient to provideessentialrenovationsin the low-construction-costColumbusmarket),settinga new standardfor reinvestmentin this fragile urbanneighborhood; • reconfigurationof thirteenownershipentitiesinto portfolios designedto reflect andreinforcethe social geographyof existingneighborhoods;and • an agreementby HUD to negotiatea more sustainablerent level consistent with market conditions for comparablepropertiesin more desirable settings. Although not without controversy,this aggressiverevitalizationplan struck a balancebetweenthe goals of affordablehousingadvocatesand neighborhoodrevitalizationproponents(including OSU andthe EmpowermentZone) who soughtto reducethe concentrationof low-incomehousing.Throughout this processCampusPartnerswas consistentlyviewed with varying degrees of mistrustrootedin a perceptionthatthe universitysecretlysoughtto displace poor residents,then convertvacatedaffordableunits to studenthousing.To

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counterthat perception, CampusPartnersundertooka concertedcommunity relationseffort that culminatedin the issuanceof a Statementof Values calling for preservationand enhancementof a vulnerablecommunity asset.This investmentin community relations yielded significant public and political support. CampusPartnersinitially assumedall of the developmentresponsibilities for acquiring and restructuringthe portfolio. In particularthe organization securedsite control, conductedduediligence,andsecuredsignificant financing commitmentsfor the revitalization work. Additionally Campus Partnersplayed an essentialrole in developingcongressionalsupportfor of earmarkedbudgetlegislationfor the project. the plan, including passage Due to the project'scomplexity and dimensions,CampusPartnerslater enteredinto a joint venturewith an experiencedaffordablehousingowner/ operator,Ohio Capital Corporationfor Housing. This statewidenonprofit developerassumedthe role of managinggeneralpartner and directs the day-to-dayoperationsof the project. CampusPartnersretainsauthority to overseethe portfolio operationand the option to exercisea right of first refusal for units locatedin university neighborhoodsin the event of a default in project ownershipor operation. LessonsLearned The CampusPartnersmodel may serveother universitiesseekingto move beyondtheir campusesinto communityplanning.At leastfive lessonscan be drawn from the organization'sexperience. First, certaincharacteristicsof the organizationprovedkey to its success in shepherdingthesetwo projectsto development: • an entrepreneurialculture that allowed the organizationto exercise independentjudgmentand take decisiveaction, and a dedicatedstaff with specializedskills in the fields of planning,real estate,and community development; • a clear, comprehensive,market-basedvision and businessstrategy; • a commitmentto investingin time-consumingcommunity-based planning and assuringthe substantiveinvolvementof the communityin all aspectsof development;and • an ability to strike a balancebetweenthe political staturenecessaryto attractresourcesand the tyranny of mandatoryconsensus. Second,no university shouldtake on a communitydevelopmentproject

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lightly. Although it is reasonableto expecta healthyreturn on investment, a university is not a conventionalinvestor/developer.It should think of its investmentas patient capital, with returns calculatedover many years. It should anticipateinvesting in both thoughtful planning and seriouscommunity outreach.It should standready to assumeunfamiliar roles and responsibilities.Institutions like OSU may have accessto vast reservoirsof goodwill and technical,financial, and political resources,but theseshould not be squanderedon poorly conceivedprojects that ignore local market conditions.Above all, while proceedingwith care,a university shouldalso understandthat its greatestrisk might lie in doing nothing. Third, as both OSU projectsdemonstrate,the potentialrewardsof community-baseddevelopmentcan be substantial-andmay not alwaysbe defined in dollars. In the short term, meaningful investmentin internal developmentcapacity and a sincereengagementwith local communities can yield extraordinaryfinancial and political leverage. South Campus Gateway,for example,will generate$10 million to $15 million of public and social investmentthrough such mechanismsas tax-incrementfinancing districts, businessimprovementdistricts, new marketstax credits, and direct appropriationsof public funds for infrastructurethat supportscommunity development.The BroadStreetproject representseven more substantial leverage:CampusPartners'modestearly-stageinvestmentin site control and predevelopmentactivity will unlock tens of millions of dollars in public andprivate capital, much of it directly supportingthe overarching goals set out by OSU and CampusPartnersfor the campuscommunity. Fourth, a university undertakinga communitydevelopmentprojectmay have to embracemany of the functions of a planning agency.Even with early efforts to establisha strong partnershipwith the city governmentin Columbus,for example,CampusPartnersfound that it could not rely on the city alone for communityoutreach.It neededto establishits own relationshipswith the myriad of neighborhood,advocacy,andbusinessgroups, churches,local planning boards,and other stakeholdersthat would playa role in planningandimplementingrevitalization.The university'sfirst steps were not uniformly successful,despitea long history of community outreach. The scopeand ambition of the developmentsthat OSU proposed requiredan increasedinvestmentin communityrelationsandplanning,and a commitmentto sharingdecisionmaking. Finally, the indispensableelementis leadershipat the highestlevel. For CampusPartnersit camedirectly from the OSU trusteesandthe president's office, which institutionalizedcommunity developmentas a core element of the effort to increasethe school'sstandingamongpublic universitiesin

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the United States.On anotherlevel universitiesthemselvescan take a leadership role in their communities. Particularlywhere public-sectorplanning capacityis limited, universitiesoften prove to be the institutionsbest positionedto catalyzelarger planning efforts. Backedby strong internal support, a university developmentinitiative can renew the campus,energize faculty and students,and strengthenthe community that the university calls home.

Part IV Lessons Learned

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16 Private Choices and Public Obligations The Ethics of University Real Estate Development Rachel Weber, Nik Theodore, and Charles Hoch

Currentassessments of universityreal estatedevelopmenttypically describe projects that are jointly plannedand sponsoredby university administrators andprivatedevelopers.Suchcasestudiestendto celebratemutualgains and exhort participantsto build on modestbeginnings.Although analysts may recognizethat conflicts can arise becauseof constructiondelays or the exact allocation of returns,the fundamentalinterestsof the university and the developmentcommunityare assumedto convergearoundthesejoint community-buildingefforts. The contemporaryresearchuniversity is not a typical developmentpartner, however.The expectationsplacedon it by a large and diversegroup of stakeholders,the loose hierarchy to which it aspires,and its mission to servebroadpublic interestsgive universities,and in particularpublic universities,a uniqueorganizationalform and decision-makingstructure.The contractssigned by developersand universitiesto govern their deals are but one expressionof the trust necessaryto sustainrelationshipswith the multiple stakeholdersthat comprisethe university community. Moreover, suchagreementshavethe potentialto substantivelyignore the broaderpurposesof the university and to subvertother endsto which membersof the different communitiesmay be committed. University officials must ask whether real estatedevelopmentis an objective worthy of realization in light of the meansit may require. In other words they must addressthe ethical ambiguitiesand challengesencounteredwhen their universitiesact as developers. In this chapterwe makethe argumentthat ethicsmatterin university real estatedealsandthen suggestexamplesof what we call "practicalethics" that can assistus in evaluatingsuchtransactions.To illustrate how practicaleth285

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ics are either ignored, undermined,or operationalizedin specific instances, we examinethe caseof the University of Illinois at Chicago,describingits developmentgoalsand the changingmeansthroughwhich thosegoals were pursued.We do not seekto provide an exhaustivelist of "commandments" that must be followed for any deal to be consideredethical. Nor do we attempt to set out principles whoseapplicationcan and shouldbe constantor universalacrosscases.Our hopesare more modest:we wish to demonstrate how ethical principles can be part of the tool kit that university dealmakers use to craft good developmentagreements. The Ethics of University Real EstateDevelopment The Urban University The contemporaryresearchuniversity is itself a community of communities-multiple collegesand departmentsbound togetherby a campusbureaucracy.The university administrationprimarily attemptsto meet the demandsof competingcolleges.When the leadershipof the researchuniversity looksbeyondthe immediatecampus,it also attendsto the responsibilities and rewards of national and international researchcommunities. University leadershipand administrationmust manageuncertaintyabout their own successand the survival of the institution. Put simply, eachadministrativeregimeseekssecurity and predictability both on and off campus to pursue improved national and international stature among peer institutions. Thesegoals translateinto two sorts of demandsfor physical facilities: thosethat enhancethe effectivenessandprestigeof the researchdisciplines, and those that satisfy local demandsfor studentand employeehousing, security, and other campusamenities.The university uses its economic power and social influence to acquire property for thesefacilities and to negotiatefavorable developmentcontractsfor the expansionand redevelopmentof the campus. Urban settingspose a special challengefor campusexpansionbecause universitiesmust plan and build in areasthat alreadyare denselydeveloped (Berube 1978). Implementationof the pastoralcampusideal, with low-rise buildings andampleopenspace,is constrainedby high land costs,proximity to neighboringproperty owners and residents,and city officials for whom universitiesrepresentbut one of many corporate-institutionalconstituents. Moreover,becauseof changesin the demographiccompositionof manyNorth Americancities, universitiesoften find themselvesin or surroundedby lowincome neighborhoodsof color. Thesecommunitiesoften resentwhat they

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view asthe institution'sprivilegedpositionanddisregardfor their well-being, both of which conspireto limit their accessto university resources. While the university leavesa large footprint on the urban landscape,it alsogenerateseconomicimpactsthat spreadacrossthe regionandthe globe. Its influenceincreasesthe numberand demandsof potential stakeholders, which include a large assortmentof neighborhoodassociations,donors, employees,students,governmentalunits, and vendors (Gills 2002). For instance,local nonprofit community developmentorganizationsadvocate for the interestsof residentialneighbors;businessand trade associations lobby for university contracts; and unions seek to improve the working conditionsof staff. University administratorsare in the difficult position of balancingand prioritizing the multiple and sometimescompetinginterests of thesestakeholders. We believe that thoseuniversity employeesand officials responsiblefor planning,negotiating,andimplementingdevelopmentprojectsshouldersignificant responsibilitiesnot only for their own conduct,but alsofor the broad impact of their policies and practices.The university may possesssimilar legal statusasotherlargecorporations,but the universityoften enjoysgreater public authority. This authority flows from a mission that involves much more than selling educationalservices;universitiesare responsiblefor nurturing creativearts, harboringintellectualfreedom,inspiring public service, subsidizinginnovative research,and the like. This authority also imposes obligationson the universityadministrationwhenit actsto improvethe physical infrastructureof the campus.In sum, university dealmakersneedto do more than meetthe conventionalstandardsof goodreal estatepractice;they also needto draw upon the normsthat give the university its civic authority and status. Moreover, many believe that public universitiesshould be held to even higher standardsof conduct.Their missionsto servebroad public interests are legislatedby charter,particularly in the caseof land-grantuniversities. They receivetax revenuesand speciallegal considerationsthat, for example, allow themto issuedebtat rateslower thanothercorporations.Suchbenefits andprivilegessupportthe notion that the public university shouldmakespecial efforts to accommodatethe greaterdiversity of demandsarticulatedby thoseaffectedby its conduct.

ThreeEthical Normsand Two Guiding Principles Ethics refersto the valuesdifferent university officials and employeesuse to guide their conductin making deals.Ethical conductis situational;it is negotiatedby deliberationamonga shifting set of stakeholdersinside and

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outsidethe university. Peopleact ethically within the framework of institutional roles that combinemoral and political considerations. When the university and its employeesor contractorsengagein development deals,they shouldpay closeattentionto threeparticularnorms: legitimacy, efficiency, andfairness.Thesenormscorrespondto threeoverarching questions:Does the deal fit the basicpurposesof the university and thoseit serves?Does the deal offer good market value for the university as a competitorin the real estatemarket?Doesthe dealtreatthe relevantpartiesfairly? Translatingthesevalues into the complex web of relationshipsamong different stakeholdersrequiresprinciples to foster organizationaland social trust and agreement.We think two principles are especiallyimportant for building trust: reciprocity and transparency.No matter how ethical an individual university negotiatormay be, if important membersof the relevant stakeholdergroupsdo not trust him or her, resistanceis likely to ensue.Universities,especiallypublic universities,enjoy specialpowers and authority becausepeoplebelieve that the university administrationwill act in ways that take the interestsof others and of a greatergood into account.Yet the very size and authority of universitiesmakesit difficult for different stakeholdersto fully submitthemselvesto suchauthority-especiallyin a society with strongdemocratictraditions. Applying the principles of reciprocity and transparencyanticipatesthe problemsof organizationalindifferenceandcomplexity.Reciprocityrequires that all partnersachieve some form of mutually advantageousexchange through sustainedcooperation.It doesnot imply that developmentpartners start out from similar positionsof power (i.e., equal footing), but that they agreeupon the distribution of benefitsas well as the conditionsthat must be satisfiedbeforethosebenefitsare realized.Transparencyrequiresthat information channelsallow partnersto comprehendthe interests,intentions,and capabilitiesof eachpartner.It doesnot meanthat all informationis disclosed indiscriminately (which, in fact, may constitutea dereliction of fiduciary duty), but ratherthat informationbe relevant,actionable,and deliveredon a timely basis. Additionally our approachemphasizes practicaldeliberationsthat improve the legitimacy, efficiency, and fairnessof the deal amongthe relevantstakeholders. Good university deals may flow from the enlightenedself-interest of intermediatenegotiators,but few peopletouchedby such deals want to rely on this ideal alone. We think that negotiatorsand stakeholderscreate moreethical dealswhentheir collaborationsput the principlesof reciprocity andtransparencyto practicaluse,clarifying how the intentionsof the university translateinto more legitimate, efficient, and fair improvementsfor relevant stakeholders.

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The ethical distinctionswe makein this chapterbuild on thoseelaborated by the Centerfor Ethics and the Professionsat HarvardUniversity. The center identifies three significant dimensionsof practicalethics. First, practical ethicsinvolves the useof moral principlesratherthanrelying uponeitherthe deductiveapplicationof norms or intuitive judgmentof normativefit. Second, practical ethics focus on institutions and the ethical relevanceof the complexroles that link individual conduct,policy, andadministration.Third, practicalethicsrelies on deliberationsthat may changeboth how we conduct our roles and the norms that guide the roles we play (CEP 2003).Additionally our treatmentof efficiency and fairnessdraws upon the ideasof justice from the work of Michael Walzer (1983), authority from CharlesAnderson (1985),reciprocityfrom PeterMarris (1996),andtransparencyfrom Amartya Sen (1999). Efficiency

That a good developmentdeal relies upon the norm of efficiency hardly requires elaboration.The parties to any financially successfulagreementrespondto competitivepricing based,ideally, in unfetteredexchange.If parties to the deal obscureimportantinformation to blind the judgmentof competitors andpartners(e.g.,knowledgeaboutenvironmentalcontamination),they will foster inefficient outcomes.If partnershipsare basedonly on kinship or favoritism, insteadof a notion of reciprocity andexchangemediatedthrough marketprices, outcomesmay be similarly inefficient. The university administrationentersdeal making in much the sameway as do realtors,developers,and contractors:that is, instrumentally.Contracts provide a frameworkfor negotiationsthat seekto ensurethat the distribution of risk does not underminethe prospectsfor profitability. But exclusive concernfor competitiveeconomicgainsamongthe playersdiscourages attentionto eitherlonger-termconsequences of the deal or the needsof the marginaland weakerpartiesunableto enterthe negotiationswith standing. Challengingthe privilegedpositionof profit makingbecomesan important ethical practice. Large university projects are both complex and relatively unique, often making themexpensiveand risky. The profit-seekingplayersinvolved in the deal will seekto shift the risk to others,especiallyto future risk bearers.The clever deal makerseeksto find ways to shift risk to othersand, in doing so, avoid costsand responsibilityfor undesirableconsequences. In contrastthe ethical deal maker seeksto identify and allocaterisks in ways that calibrate the burdensand the benefits over time. Such reciprocity often extendsbeyond the boundsof the written contract.

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Legitimacy

We expectdevelopersto makedealsthat will generateprofits. When universities enterthe marketplace,however,we expectthat their deal making will do more than earna return on investment.Universitiestypically pursueland developmentnot as an end, but as a meansof achieving other goals that satisfy the interestsof their many communities.Thosewho participateand benefitfrom their relationshipswith the university do so as employees,contractors, clients (e.g., students,patients),or neighbors.Theseare relationshipsbasedmainly not only on contract,but also on serviceand proximity. The university acting as developermust possessthe authority to pool, prioritize, and representthe interestsof thesedifferent stakeholders.University leadership,usually the administrationand governingboard, authorizesa proposedreal estatedeal. For all universities,the legitimacy of such authority flows from legal statuteandcharteras well as the consentof the different parts of the universities(e.g.,boardsof trustees,collegefaculties,staff, andstudents). Public universitiesalso must attendto communitiesoutsidethe university itand the wide asself, including governmentalbodiessuchas state legislatures sortmentof civic communitiesaffectedby university policies and practices. University dealmakersmustoffer justificationsto the communitieswithin the universityregardingthe valueandimportanceof the developmentproject as a worthy meansof furthering university goals. Additionally they must offer justifications to those communitiesoutside the university whom the proposedprojectwill impact.Thesejustificationsmay appearin plans,redevelopmentagreements,or other public documents.When universitiesmake thesejustificationsof the developmentdealstransparentto the relevantparties inside and outsidethe university, they legitimize their authority to carry out a deal "in the public interest." Fairness

The fair developmentdeal addresses the interestsof thosewho face a disproportionateburdengiven their limitedaccessto potentialrewards.This makes practicalmoral sensebecausethe deal makerstake stepsthat reducethe potential suffering of the most vulnerable.In doing so they learn how current arrangementsreinforce such vulnerability and what might be done to remedy thesearrangements. For instance,if a small groupof powerful deal makers keepssecretsfrom other relevantparties,this increasesthe exposureof suchpartiesto unduehardships.Sharingthis knowledgereducesthe discretion of the powerful and enablesthe weakerpartieswith a stakein the outcometo influencethe outcomeby shapingthe deal.

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Including the weakerpartiesin the negotiationsmay improve the legitimacy of the deal, but doesnot ensuremore reciprocaloutcomes.University deal makersmight establisha more inclusive process,but then avoid establishing meaningful reciprocity by taking only symbolic actions to ensure that benefitsaccrueto weakerparties.Theseactions might include making committeeappointments,forming advisorygroups,or promisingfuture benefits to marginal or weaker parties whose membersbear the brunt of the negativeconsequences (e.g., displacement).The clever deal maker co-opts the weakerparties.The ethical deal makerbuilds into the agreementincentives to take theseparties'interestsinto account.

The Caseof the University of Illinois at Chicago In this casestudy we evaluatethe degreeto which the creationand development of the University of Illinois at Chicago(UIC) met the ethical standards outlined above.As an urban renewal project in a denselypopulatedurban core, the developmentof the Circle Campusof the University of Illinois systemseemeddestinedfor controversyand communityoppositionover the courseof its lifetime. However, UIC's willingness and ability to work with its immediateneighborsand the City of Chicagohasevolved and improved over threedistinct phases.As we will arguein the conclusion,the university did not undergoan ethicalconversionduring this period,but rathergradually adoptedgreatertransparencyand reciprocity to both enhanceits effectivenessas a developerand to respondto demandspresentedby its stakeholders.

Expansion,1960-1980 During the university'sexpansionphase, theethical principlesof reciprocity and transparencywere consistentlysubordinatedto the priorities of big-city machinepolitics. Patronageand closed-doordeal making betweenstateauthorities (such as the Illinois Housing Board), leading civic organizations, the mayor'soffice, federal agencies(suchas the FederalHousingand Home FinanceAgency), andthe university'sBoardof Trusteesprecludedmeaningful input into the decision-makingprocessby residents,community organizations,and local businessowners(Rosen1980). The City of Chicago and Mayor Richard J. Daley, in particular, took a leadershipposition inbringing a campusof the University of Illinois to Chicago. The interestsof the state university systemand the City of Chicago coalescedarounda site on the city's NearWest Side. The university wanted an urbancampusto accommodatethe surgingdemandfor higher education, and Mayor Daley soughtto use sucha developmentto shoreup the western

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flank of the city's ailing downtown and protectthe Loop and the areanorth of the campus,viewed as the city's Skid Row, from further deterioration. Unableto securerights to the vast rail yards abutting downtown, the mayor settledfor the Harrison-Halstedsite with its concentrationof urbanrenewal property and low-income inhabitants. In seekingto expeditethe constructionprocess,severalchannelsfor community participationwere closeddown, violating the principle of transparency. For example, the city initiated the land disposition processwithout ofthe local community.As Ferman(1996, 69; notifying key representatives emphasisadded)reveals,"Daley'stop plannerswereresearchingthe HarrisonHalstedsite and were understrict ordersnot to reveal anythingto the public or evento universityofficials. By the time Daley announcedthat the HarrisonHalstedcorridor was an alternativesite, it was, in fact, the only site." Moreover, such actionspreemptedthe possibility of an organizedneighborhood responseand shifted all venuesfor decision making from the community level to the city council, the statelegislature,the Illinois HousingBoard, and the courts.Bennett(1989, 169) notes,"In noneoftheseplacescould proponentsoffer alternativeproposalsor debatethe substantivemerits of the UICcity proposal."Although an injunction suit was filed by an organizationof residentsin 1963,the Illinois SupremeCourt ruled againstthe residentgroup and the campuswas built. Involving the federal governmentin the redevelopmentschemeand using land that the city controlledas part of a federal urbanrenewalproject satisfied two objectives:(1) it avoidedthe needfor approvalof the necessaryaction by a local group other than the city; and (2) it enabledthe city to get the federal governmentto take overmostof its financingobligationto theuniversity(Rosen 1980,161).It alsoredrewthe lines of accountability,favoring onesetofreciprocal relations(i.e., city-federal)overothers.For example,Daley'sstrongsupport for the new Democraticpresident,John F. Kennedy,was rewardedwith the federal government'swillingness to provide the urban renewal funds to subsidizeland acquisitionandclearance.This exchangeof political favors was madeat the expenseof the city's prior commitmentto neighborhoodleadersto supportgrassrootsdevelopment(seeBennett1989; Rosen1980). During the expansionphase,as was the norm in this era, the principle of transparencywas largely disregardedby powerful public actorsworking in concert. Community organizationsas well as project partnerswere denied critical information and accessthat would have allowed them to have any meaningfulinput into the planning process.In particular the residents'inability to influence the processwas not proportionateto the burden they were forced to bear. By the completionof the project, the areahad lost approximately 14,000residentsand 630 businesses(Cohenand Taylor 2000).

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Consolidation,1980-95 The declinein federalfunding for urbanrenewalcombinedwith the deathof Mayor Daley reconfiguredthe stakeholderrelationshipsthrough which the university soughtto achieveits developmentobjectives.In 1983, after the ChicagoCircle campusofficially mergedwith the Medical Center,the president of the University of Illinois systemaskedthe then 182.S-acreChicago campusto begin its own planning process.University administrationprojecteda needfor an additional 2.3 million grosssquarefeet within the next twenty years(UIC 1984). New proposalsfor campusbuildings beganto appearin departmentalbudgets. Surroundedon all sidesby the low-income neighborhoodsof color that urbanrenewalhad sparedin the previousperiod, the university'sexpansion plans confrontedproblemsassociatedwith land acquisitionand community relations.At first it choseto deal with the challengessurreptitiously(Gerut 1990).In 1988the university setup a privatetrust fund to acquirepropertyin a depopulatedcommercialareasouthof the campus.The site of the historically important Maxwell StreetMarket, this areawas home to an outdoor flea market and more than a dozen retailers. Here the ethical principle of transparencyconflicted with acceptedmarketpractices.Understandablythe university did not want to signalits expansionintentionsto privatereal estate developersor property owners,which would have set off a frenzy of speculative buying and selling. In addition to securingcheaperland, the secrecy accordedby the trust would allow the university more timeto comeup with a strongermasterplan for the area. Secrecy,officials believed,would help themavoid rekindling the tensionsof the past,sincemany communitymembershad not forgotten the earlier betrayal. The university's expansion planswere heavily dependenton the city's landholdings,planning authority, and aldermanicinfluence on community relations.Howeverthe city was unsureof how the university'Svagueobjectives meshedwith its own goals and the well-being of the neighborhood. UIC requestedthat the city put an endto the saleof all city-ownedland in the targetedareauntil its planningprocesscould be completed.The city balked at the suggestion,unwilling to cede its authority without receiving assurancesas to how and when the land would be used.The city demandedthat the universityput togethera masterplan beforeadditional concessions would be made. The election of Richard M. Daley (son of Richard J. Daley) as mayor dramaticallyimprovedcity-university relationsand again saw the city as an active playerin (as opposedto regulatorof) the university'Sexpansionplans. Expressingits interest to engagein "joint planning for the area," the city

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obtainedtitle to tax-delinquentpropertiesin the areaand demolishedthose that were deteriorated.The city then sold its land in the expansionareato the university via quitclaim deeds.It also agreedto vacatecertain streetsand alleys at no cost to the university, relocatethe Maxwell StreetMarket, and undertakestreetimprovements.In returnthe university agreedto financethe market and land use analysisfor the area when the city's budget for such activities was cut. The university's consolidationphasesaw a changein stakeholderrelations. Although in many ways DIC still enjoyed the support of city hall, officials were increasinglypreparedto usethe city's regulatoryauthority to safeguardthe public interest.The city held the university to a higher standard of transparencythan had been required during the expansionphase, demandingthat DIC reveal its plans before further developmentwould be approved.The city was especiallyconcernedthat DIC live up to its responsibility as one of the largestlandownerson the West Side, understandingthat the institution's developmentdecisionswould have far-reachingimpactson currentand future land usesin the surroundingarea.

Revitalization,1995-present During this phaseDIC's priorities shifted dramaticallyfrom expandingthe institutional boundariesof the university to meet the spaceneedsof academic departmentsand studentsto, in the words of StanDelaney,executive directorof the project,"building a new communityalmostfrom groundzero" (cited in Corfman 1999). In 1996 the interim chancellorintimated that the campusexpansionwould requiremorethanan arm'slengthrelationshipwith a developer.The statelegislaturedid not appearwilling to allocatesufficient funds to pay for the project'sadditional land acquisitionand infrastructure as envisionedand askingfor thesefunds might havecomeat the expenseof other traditional academicbudgetitems (DIC 1996a).Thereforeajoint venture with a private developerwas proposedthat would add private, marketrate housing and commercial developmentto the original proposalfor residencehalls and academicand recreationalfacilities. Controversiallegislation was passedto give the university authority, as a public institution, to enter into a private developmentdeal, permitting activities such as selling university-ownedproperty to private parties. The requestfor proposalsfor the jointventurereflectedthis shift in focus. It statedthat the university was willing to entertainproposalsfor privately developedhousingthat will meetneeds of faculty and staff, as well as addresscommunityhousing goals. This

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programelementwould help to attractmorefaculty to the areaadjacentto the university andfoster developmentof a more traditional campusatmosphere... an explicit strategyfor communitybuilding activity shouldbe identified if the developerincludes this elementas part of the proposed development(VIC 1996b,emphasisadded). Encouragedby the buoyant housing market, the possibility of building one of the largestnew constructionprojectsin Chicago'sdenselydeveloped core, and the apparentcomplianceof city and stateadministrations,the winning developmentteam (eventually)proposedto build 900 units of marketratehousing.As negotiationsprogressed,it becameapparentthat this housing was intendednot only to contributeto UIC's community building effort but also to help foot the bill for an increasinglyexpensiveundertaking,which came to be known as University Village. All of the responsesto the RFP assumedthat the university would finance the bulk of project costs.Few, if any, were willing to contributetheir own equity. In addition the university would haveto install new infrastructureandpurchasean additional15.2acres (at inflated prices)to accommodatethe project. This was land it would eventually sell back to the developers. Insteadof hiring fee developersandpayingthemwith funds from standardissuecapital improvementbonds,the university turnedto the city for support. The City of Chicagodesignatedthe proposeddevelopmentsite as a tax incrementfinancing (TIF) district. This designationallowed the University of Illinois systemto receive 95 percentof the new property tax revenuesthat would be generatedin the project areaover a twenty-threeyear period to pay back new bond issues.These tax revenues(i.e., the "increment") would help the university repay almost $100 million of the $525 million development(Shields1999). Becausestate-ownedbuildings do not generateany property taxes, market-ratehousingbecamea financial necessity. Bringing the activities of the private real estatemarketto bear On the repaymentof publicly issueddebt subjectedthe university systemto the scrutiny of the financial markets.Moody'sgavethe new TIF bondissuesa slightly lower bondrating becausethe expansionpushedthe university'sdebt capacity to the limit. StandardandPoor'snotedthat "universitiesarenot usuallyin the businessof improving neighborhoods,andhaving a role in privatedevelopment is rare. But if UIC's goal is to dramatically improve the campus environment,they can't do it alone" (Shields 1999; see also Brick 2002). The expansion-related bondsconstitutedthe largestborrowingsin yearsfor the university systemand increasedthe amountof the operatingbudgetthat debt servicewill consumeto 3 percent(from 2 percent).

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As the interestsof private developers,city planners,and financial actors cametogetheraroundthe new community-buildingobjective,somebeganto wonderif the public statusof the university was beingusedfor inappropriate private gain. Moreoverthe universeof potential stakeholders expanded,and the demandsthey madeof eachother becameincreasinglycomplex. Committing a substantialamountof public funds to this quasi-privatedeal also broughtnew obligationsanddemandsfor transparencyanda more equitable distribution of benefits. Facingquestionsaboutthe legitimacy andfairnessof the deal, the university and city reachedout to incorporatethe interestsof previously excluded neighborsin the developmentprocess.The university establisheda committee for structuringcommunityinvolvementto review the proposalssubmitted through the RFP process,althoughthe university retainedthe right of selection.The centerpieceof efforts to involve the local residentswas the "community benefitsclause"of the redevelopmentagreementsignedby the University of Illinois Board of Trusteesand the City of Chicago.This committed the university to contractinggoals toensureparticipationby minority and women businessenterprises.UIC also agreedto double the numberof Latino employees(from 8 percentto 16 percent)at the university as a whole (Washburn1997).1 The city, too, took its representativerole more seriously.Even thoughthe expansionproject was a high priority for Mayor Daley, the city held the university to very specific and stringentcommunity benefitsstandards.For its part the city attemptedto createmore widespreadcommunitybenefitsby stipulatingthat a portion of the 900 units of private housingbe "affordable" to householdsearning80 to 120 percentofthe regionalmedianincome.The sale prices for theseunits, as well as the relocationcostsfor existing merchantsand residents,would be subsidizedwith the TIF funds. UIC's South Campus DevelopmentProject was extraordinaryin many respects.Completingsucha massiveproject in an era of greaterinterdependencebetweenpublic and private actorsand demandsfor greateropenness required the university to cultivate relationshipsof trust that extendedbeyond mere contractualobligations. In the process,however, new conflicts arose.For example,in extendingitself to further private as well as public goals,the university found itself in an awkwardposition, beholdento profitseekingprivateinterests,to its public mandateto deliver high-quality education at a reasonablecost, and to its responsibility to minimize harm to neighboringresidentsand institutions. The university team had to simultaneouslyinternalizeboth the marketvaluesof the financiersandthe political demandsof minority stakeholders.

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Conclusion The VIC developmentexamplesillustrate the ethical ambiguitiesuniversity deal makersface when undertakingreal estateprojects.A reciprocalrelationship requiresthat partiesabide by their agreementswithout any hidden constraints or deceptivepromises.In such casesparties should receive benefits that areproportionateto the investmentsthey make,risks they take, or burdens they shoulder.Theseadditionalcriteria for the distribution of benefitsrequire political judgmentsaboutwho hasstandingin the dealandtheir relevantneeds. The university may enjoy legal corporatestatus,but as a social and public institution it must attendto the needsof its multiple communities. During VIC's expansionphase,city officials engagedin machinepolitics that shunnedtransparencyto closethe deal,while embracingpatronage-based reciprocity to build the campus.The city and university did little to offset the burdensof displacementimposedon the residentsand businessowners forced to move when the campuswas constructed.When the deal makers used statepowers to excluderelevantpartiesfrom the deal, they violated the tenetsof reciprocity. The transparencyof VIC's developmentdeals improved over the ensuing forty years,although,particularlyduring the land acquisitionphase,it could be arguedthat somedegreeof secrecywas necessaryto movethe dealforward. In this caseimprovedtransparencyprovedcrucial by helping replaceroutine suspicion with modesttrust. This improved the legitimacy and authority of the university evenas it reduceddiscretion.The legacyof patronagerequiredclear signalsof public disclosureto offset earlierpracticesof deception. The city's role shifted from political patron to regulator to accomplice over this period. Reforms erodedthe patronagemachine'sindifference to minorities,civic groups,andothersourcesof opposition.City officials shared knowledgeandexpandedthe rangeof public procurementto include awider and less docile arrayof contractors.The resultingimprovementsin the ethical dimensionsof its developmentdecisionsdid not reflect a self-conscious conversion,but a gradualawakeningto the efficacy of democraticparticipation in a contextof increasingpolitical demands. The political powerof VIC grew enormouslyover four decades,as did its economicrole in the developmentof the city. However the scaleand complexity of the university made it both practically difficult and strategically risky to seekunilateral developmentauthority. The university development team increasinglyrealizedthat the political disapprovalof statelegislators, neighbors,employees,and the city (articulatedthroughmarket,political, or legal means)would trump any attemptsat unilateralexpansion.The increasing

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demandsof privatization (e.g., the TIF) forced the university development team to internalize market values at the sametime as increasingpolitical demandspressuredthem to expandthe circle of stakeholders.The VIC developmentstaff crafteda compromisethat soughtto balancebenefitsto both the developerand previouslyexcludedstakeholders. The legitimacy of university developmentdeals hinges on an authority that seeksto identify, anticipate,andinclude the interestsof all relevantrelationshipsboth within and outsidethe university (Gills 2002). Public benefits that flow from dealsdo not arise spontaneouslyfrom private exchange,but through negotiationsthat combinethe principles of transparencyand proportional reciprocity. As transparencyincreases,even marginalizedstakefor themselvesand holderscan graspthe meaningof project consequences, for others. Such inclusion enhancesthe legitimacy of the deal and places moral and political pressureon the university staff to ensurefairness.The VIC developmentteam tookimportant stepsin this direction, but has traveled only a short distanceso far. This chaptershowshow ethical principles can be usedto inform university developmentdeals.The casesurely can be made to include additional values (e.g., sustainability)and principles (e.g., integrity) that we did not consider.Additionally, somereadersmight expectthat argumentsbe made supportingthe priority of one value over others in specific instances(e.g., efficiency over fairness). However, our objective was not to make such a case,but ratherto emphasizethe relevanceof practicalethicsand challenges associatedwith ethicalconductin the contextof universitydevelopmentdeals. Our approachopensthe door for future work that builds on this foundation to connectto broaderquestionsof university policy and administrationand to the deeperethical assumptionson which suchdealsdepend. Notes The authorswish to thankthe editorsandcontributorsto this volumefor their helpful commentsandsuggestions.We also thankRanadaHarrisonandBill Neuendorf,who providedresearchassistance. 1. This provision was, in fact, quite strategic.Building political supportfor the TIF district in city council and community supportfor the expandeddevelopment involved brokeringdealswith local Latino leaders.Redistrictinghadrecentlyaltered the racial and ethnic compositionof the ward within which the university is located.

References Anderson,Charles.1985.The placeof principlesin policy analysis.In Ethics in planning, ed. Martin Wachs, 193-215.New Brunswick, NJ:Centerfor Urban Policy Research.

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Bennett,Larry. 1989. Postwarredevelopmentin Chicago:The declining politics of party andthe rise of neighborhoodpolitics. In Unequalpartnerships:Thepolitical economyof urban redevelopmentin postwarAmerica, ed. Gregory D. Squires, 161-177.New Brunswick,NJ: RutgersUniversity Press. Berube,Maurice. 1978. The urban universityin America.Westport,CT: Greenwood Press. Brick, Michael. 2002.Big dealson campus:Special-purpose entities.NewYork Times, July 24: C6. Center for Ethics and the Professions(CEP). Harvard University. 2003. http:// ethicstest.harvard. edulmissionlpractical_ethics.html. Cohen,Adam, andElizabethTaylor. 2000.Americanpharaoh.Boston:Little, Brown andCompany. Corfman,Thomas.1999.A new course:With Maxwell Streetrevampplan, UIC gets into the developmentbiz. Crain's ChicagoBusiness,October4: 17. Ferman,Barbara.1996. Challengingthe growth machine:Neighborhoodpolitics in Chicagoand Pittsburgh.Lawrence:The University Pressof Kansas. Gerut, John. 1990.The University of Illiniois at Chicagoexpansionplans:A history and theory of large institutional expansion.Unpublishedmaster'sproject. Chicago: UIC. Gills, Douglas.2002. Unequalanduneven:Critical aspectsof university-community partnerships.In CollaborativeResearch:University and CommunityPartnership, ed. Myrtis Sullivan andMarilyn Willis, 27-48.New York:AmericanPublic Health Association. Marris, Peter.1996. Thepolitics of uncertainty.London: Routledge. Rosen,George.1980.Decision-makingChicago-style:Thegenesisofa Universityof Illinois campus.Urbana:University of Illinois Press. Sen,Amartya. 1999. Developmentasfreedom.New York: Anchor. Shields,Yvette. 1999.Deal in focus: University of Illinois readyto rampup debtwith twin offerings. The BondBuyer, December1: 42. University of Illinois at Chicago.1984.A look to the future: Strategicplansfor mc. - - - . 1996a.Reportfrom the Chancellor,Chicago:Developmentplansfor South Campus.June13. - - - . 1996b.Requestfor proposals.Unpublisheddocument. Walzer,Michael. 1983. Spheresofjustice: A defenseofpluralism and equality. New York: Basic Books. Washburn,Gary. 1997. UIC agreesto doubleLatino staff; accordalsocalls for more contracts.ChicagoTribune, November21: D9.

17 Ivory Towers No More Academic Bricks and Sticks Wim WieweJ and David C. Perry

University real estatedevelopmentis a new area of academicand applied inquiry. As discussedin the introductorychapter,thesedevelopmentactivities are part of the largerissueof the relationsbetweenthe university and its city and community,and they raiseperennialquestions.But thesequestions havebecomemore pronouncedwith the increasedrole of largeresearchuniversities,in particular,as major employers,generatorsof economicdevelopment, and key componentsof the local, national, and global knowledge economy.This chaptersumsup what we have learnedabout the nature of university developmentprojects-theirimpact on the university's neighborhood and the city, and on the institution itself. How do universitiesgo aboutimplementingtheseprojects,and what appearto be the bestpractices? What arethe policy, practice,andresearchquestionsraisedby the increasing role of universitiesas developersin their cities? Shaping the City, the Neighborhood, and the Campus

The main reasonuniversitiesengagein real estatedevelopmentprojectsis that they needadditional spacefor their core activities. This is the central motivation in fifteen of the twenty-two casesrepresentedin the preceding chapters,while improvementof the surroundingneighborhoodwas the main motivation in most of the remainingcases.The biggestprojectsinvolve the constructionof whole new campuses,suchas the Auraria Higher Education Centerin Denver, the Tacomacampusof the University of Washington,the University of Illinois at Chicago,and IndianaUniversity-PurdueUniversity at Indianapolis.Thesemassiveundertakingsalmost inevitably involve displacementof currentresidentsand businesses,but in the end havea positive effect on their immediatearea, and often the entire city. They representa 300

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major commitmentby the higher educationinstitutions and are undertaken only with large amountsof public funding and political support. The developmentof thesenew campusesin a sensecreated,in all four cases,whole new neighborhoodsclose to their cities' downtowns.In most casesthis was not incidental, but a consciousintention on the part of key decision makers.Thus theseprojectswere also part of eachcity's transformation, enablingthe city to playacentralrole in the knowledgeeconomyat a global or regionallevel. For Indianapolisthe new campusbecamea major partof restructuringdowntown,including anemphasison athletics.In Tacoma the new branchof the University of Washingtonis revitalizing an obsolete warehousingdistrict. In both Chicagoand Denver,wherethe new campuses were startedrespectivelyin the 1960s and 1970s, low-income downtown neighborhoodsslatedfor urbanrenewalwere transformed,but at significant humancost. Even now this proce