From CREATING INTELLECTUAL COMMUNITIES, Volume 1, Number 3, 2010
Soon after being appointed president of Northern Arizona University in Flagstaff, John D. Haeger declared his commitment to an “enterprise model” of engagement and entrepreneurship, acknowledging the university’s role as an economic force in the region. Haeger realized the university could leverage its resources for the betterment of the city, which is challenged by limited job opportunities and a high cost of living.
“To best phrase it, we have the land,” says M.J. McMahon, executive vice president at NAU. “So we asked ourselves ‘what is the best use of that? How can we leverage it for the improvement of the university as well as the city of Flagstaff?’ We see the city as a partner.”
McMahon answers her questions by pointing to a new hotel and conference center opened in 2008 on the northern edge of the campus adjoining Flagstaff’s commercial heart. Working in partnership with the Drury Hotels Company of St. Louis, Missouri, the university relinquished use of a 4-acre parking lot to build a complex large enough attract business groups from outside the city and generate tourism dollars. Ayers Saint Gross designed the 41,000-square-foot conference center with state-of-the-art meeting rooms, an 11,000-square-foot ballroom, food service facilities and an adjoining 340-space parking garage.
A key partner in the plan is the medical products division of W.L. Gore and Associates, an international company employing about 1,600 people in Flagstaff. “They hold about 1,000 meetings a year where they bring doctors in from all over the world, but they haven’t been able to hold the vast majority of those meetings in Flagstaff,” says Rich Bowen, the university’s associate vice president for economic development. “Now they are excited because this is a venue that meets the quality level they need. And they’ll bring those conferences here.”
Bowen says the project was conceived much like a private development, predicated on the promise that it will be commercially successful. Before commissioning Ayers Saint Gross, the university tapped Jones, Lang, Lasalle, a worldwide hospitality consultant, and real estate developer Hines Benchmark to conduct a feasibility study and collaborate on a business plan. “It turns out there is a really robust market of 1,200 to 1,300 associations within the Southwest that now travel to outlying areas to host their regional conferences,” says Bowen. “Flagstaff has always been high on their list but until now, there hasn’t been a facility of the quality or the size they wanted.”
From an investment point of view, Northern Arizona University will subsidize the operation of the conference center over the next few years until it breaks even and then anticipates making a profit. “It’s really a net benefit for the community, about a $7- or $8- million impact for the community,” says Bowen. “The university, quite frankly, is doing this for larger reasons. This community had struggled forever to develop a conference space but simply couldn’t purchase the land.” In addition to providing Flagstaff with a much needed amenity, the new complex has helped to boost the reputation of the university and visibility of its campus, while improving its connections to local businesses.
Strengthening ties to the surrounding community also drove Franklin & Marshall College to undertake a $35-million retail and residential development along a major street connecting its campus to downtown Lancaster, Pennsylvania. College Row opened in 2007, fulfilling college president John Fry’s goal of linking town and gown as envisioned in ASG’s master plan for the campus.
“College towns are so full of energy and life,” says Fry. “I wanted to get away from the idea of the ivory tower and create an environment in which both the constituencies – residents and students – interact in positive ways.” He acknowledges, too, that there is an increasing preoccupation on college campuses with safety of students, faculty and visitors. “The best way to ensure safety is to have lively streets. So there’s a practical dimension to this project as well.” And it’s not lost on this college president that Franklin & Marshall will be more successful in attracting students if, in addition to academic offerings, its campus environment offers young people more places to have fun during off hours.
Fry admits he didn’t have the capital to create the ambitious, mixed-use development of his dreams, particularly with the constant pressure to sink money into academic buildings. But he could offer a built-in market for retail sales and services, and a key ingredient to the project – land.
So he pinpointed a seven-acre site on the north side of the campus, put together an RFP and solicited the development community. Before long, he struck a deal with Campus Apartments, a Philadelphia developer responsible for residential buildings at the University of Pennsylvania, to construct 117 housing units for about 400 students. The three-building College Row complex incorporates 50,000 square feet of ground-floor retail spaces, including a specialty grocery store, restaurants and bistros.
“It is already creating street traffic, more buzz and excitement,” says Fry. “Now you can see five stories of lit apartments across from campus. It gives a better first impression.” With the buildings fully leased, he is turning his attention to expanding development onto an adjacent 30-acre site acquired during the construction of College Row.
Meanwhile, the financial success of the mixed-use project, which opened in 2007, allows Fry the freedom to funnel resources to campus needs. The college’s commitment to the development is limited to a 40-year ground lease with the possibility of renewals for up to 20 more years. After that, the development becomes the property of the college. The bottom line: “We are avoiding huge outlays of capital while providing quality assets for our students – and eventually we are going to own this,” says Fry. “So everyone comes out a winner.”
