Rebuilding the University of Wyoming’s aging dormitories would best be done with funding from the state, not a public-private partnership, according to research done by the Legislative Services Office.
As part of a task force formed this winter, Wyoming legislators and UW administrators discussed the best options to fund a complete overhaul of the university’s residence halls during a day-long meeting Monday.
Construction alone on the new dorms is expected to cost anywhere from $250 million-$400 million.
Those estimates assume UW would construct new dorms that house 1,000-2,000 beds in total, with construction costs averaging $100,000 per bed.
However, some on the task force suggested the costs could much cheaper than that, noting other public universities have constructed new dorms in recent years with pricing as cheap as $25,000 per bed.
Matt Kibbon, UW’s deputy director of facilities construction, said the construction of new dorms could actually be more than $100,000 per bed because the state has a “unique construction climate.”
Projects that cost $450 per square foot in other parts of the U.S. can cost $700 per square foot in Wyoming, he said.
LSO staff suggested funding via a public-private partnership would not save any money on construction costs while offering less accountability for the dorms’ quality.
“To maximize the profit margin, the quality of construction and maintenance would likely suffer,” LSO Director Matt Obrecht said.
Some members of the task force nevertheless expressed interest in pursuing a public-private partnership and questioned the LSO’s initial findings during the meeting in Laramie.
In a public-private partnership, a private company would bear most of the financial risk for the cost of new dorms, then recoup funding from room-and-board paid by students.
For the one public-private partnership currently on campus, Bison Run Village, rental revenues do not cover the annual costs. As a result, UW has to make annual supplemental payments to the developer.
The LSO also suggested in a memo that building new dorms via a public-private partnership could “result in less involvement in key decision making by UW Trustees, the Legislature, and Laramie/Wyoming residents.”
If the dorms’ developer opted to sell the project to a new operator, that “would require UW to work with a new operator that may not deliver the same level of service as the original developer.”
American Campus Communities, Bison Run’s developer, has not sold the university-owned apartments that opened in 2012.
Clayton Hartman, former chair of the UW Foundation board, suggested many of the LSO’s findings were erroneous because the university could “write a good contract” to prevent many pitfalls of using a public-private partnership.
Sean Blackburn, UW’s vice president of student affairs, said university staff plans to be “much more engaged and aggressive with future (public-private partnership) projects” to ensure the university doesn’t suffer the same drawbacks of the Bison Run project.
“If we don’t fill those beds, we’re on the hook for a lot of those costs,” Blackburn said. “We are not opposed to doing a (public-private partnership) as long as we set the terms appropriately.”
Sen. Tara Nethercott, R-Cheyenne, sits on the task force and said putting numerous restrictions on a developer could likely offset the benefits of using a public-private partnership.
From her viewpoint, the main advantage of using a public-private partnership is allowing the university to avoid construction rules that require in-state contractors to be used.
If the university ultimately does use a public-private partnership, Blackburn said UW would likely bid out the contract for a main developer, even if the results might be somewhat predictable.
“I’m not convinced there’s a … partner in the state of Wyoming that has the experience” for the project, he said. “A good chunk of (money) would leave Wyoming.”
Nethercott suggested an out-of-state contractor would still likely need to tap local sources for work and materials.
“Even though the primary contractor would be out-of-state, I still think they would be providing a significant boost to the local economy,” Nethercott said.
Others on the committee noted UW could require a developer to use a certain percentage of local workers.
Rep. Bob Nicholas, R-Cheyenne, said that too could offset any cost savings from using a public-private partnership.
“If we put those controls on, we will not be saving money on construction costs,” Nicholas said. “Any time we want more control, the (public-private partnership) folks are going to want more cash return to give up that control.”