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ISU Picks Rhode Island Developer For $100 Million Student Housing Project

Gilbane development in Virginia
Gilbane Development Co.
Gilbane Development's Upper Level Student Housing project at George Mason University in Virginia, which was built using a public-private partnership. Details about the Gilbane's winning bid at ISU were not immediately available.

A Rhode Island developer has been awarded a $100 million student housing project at Illinois State University that's expected to open in fall 2021.

Gilbane Development Co. was awarded the project, the Chief Procurement Officer for Public Institutions of Higher Education announced Friday. ISU also said for the first time that the project will be built on the land formerly occupied by the Aktin-Colby and Hamilton-Whitten dorms at the southwest corner of campus, between Main and University streets.

Gilbane, based in Providence, is one of the largest privately held family-owned construction and real estate development firms in the industry. The runner-up was Texas-based American Campus Communities.

"We were extremely impressed with the experience (Gilbane) had across the country with residential environments in particular, including some in our backyard here in the state of Illinois. That was extremely attractive," said ISU Vice President for Student Affairs Levester "LJ" Johnson.

Friday's award announcement disclosed an estimated project cost of $100 million. ISU says "the project has not been fully developed and an accurate estimate of cost is not available."

Details about the Gilbane's winning bid were not immediately available. Johnson said it addressed what ISU was looking for, including dining and quality-of-life amenities. And Gilbane's experience shows it can deliver many different types of units, he said.

"Everything from semi-suite arrangements, with two people on one side and two people on the other, and a bathroom in between, to a configurations of six to eight (people) with pod-style living for students. That was very attractive," Johnson said.

Public-Private Partnership

The project will be a public-private partnership like the one that built Cardinal Court, which opened in 2012. Gilbane will work with investors to fund the project and ISU will lease the land to the investor(s) for a long-term period up to 30 years, ISU officials said Friday. In time, ISU will have the option to buy out the lease. (For example, ISU used the buyout option six years into the agreement and now fully owns and operates Cardinal Court.) No state funds, student fees, or tuition dollars are planned to be used for this project, ISU officials said.

Gilbane has experience with on-campus housing projects using public-private partnerships, also called P3s. It developed the mixed-use development College Town Rochester at the University of Rochester and an upper-level student housing project at George Mason University, among other projects.

Gilbane has also developed student housing projects in Illinois, including the Octave at the University of Illinois Urbana-Champaign (538 beds in 167 units).

Friday's award announcement does not commit ISU to enter into an agreement with Gilbane, but it "indicates ISU's desire to enter into discussions with the finalist proposer of the (request for proposal) for the purpose of clarifying University needs and the information supplied by (Gilbane)," the award announcement said.

"On the basis of the information supplied and discussions, negotiations shall be entered into with the qualified proposer (Gilbane) for the purpose of securing an agreement that is in the best interest of the university and its students," the award announcement said.

Next, ISU's leadership team and Gilbane will begin communicating about timeline, design, and determine when the project goes before ISU's Board of Trustees. ISU said in a statement Friday that the "Board of Trustees (is) aware and supportive of the project."

"There's a lot of work to be done from this point forward," Johnson said.

Housing Strategy Shift

ISU said in January it was looking to partner with a developer for a public-private partnership that would add up to 1,200 beds—a 20% increase in on-campus housing.

The new project represents a major shift in housing strategy for ISU, guided in part by a 2018 study from consultant Brailsford & Dunlavey. After years of demolishing aging residence halls, the study found ISU now lacks enough on-campus housing for sophomores, among other needs. 

This project could disrupt the off-campus student housing market. Landlords say vacancies will rise as more students stay on campus, cutting into their revenue and increasing the likelihood for dilapidation and even foreclosures. ISU officials say off-campus apartment owners will still be able to serve upperclass students and graduate students.

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Ryan Denham is the digital content director for WGLT.
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