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New Palm Beach Post Article about Today's BOT Actions

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New Palm Beach Post Article about Today's BOT Actions

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http://www.palmbeachpost.com/localnews/content/local_news/epaper/2009/07/22/0722faudeal.html

FAU trustees approve privatizing residence halls
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By KIMBERLY MILLER

Palm Beach Post Staff Writer

Wednesday, July 22, 2009

BOCA RATON The Boca Raton development firm of Crocker Partners - creator of tony Mizner Park and slick CityPlace tower - is getting into the university dormitory business.

An agreement approved Wednesday by Florida Atlantic University trustees gives the go-ahead to finalize a deal with Crocker to develop and manage two new residence halls, as well as oversee the school's five current dorms on the Boca Raton campus.

As part of the deal, FAU will get a $12 million infusion of cash early next year to build a new football stadium and other facets of the university's long-sought "Innovation Village."

Wednesday's vote was called landmark by school officials - a turning point in the makeover of FAU into a traditional university, one no longer burdened with a reputation as solely a commuter school.

"This is the culmination and a beginning of what we've been working on now for many years," said FAU President Frank Brogan about the plan. "Florida Atlantic University is not only a great place to come and receive a world-class educational experience, but a place to come and be part of something special."

The deal works this way: a new not-for-profit organization created by FAU will issue approximately $90 million in bonds early next year that will be repaid with operating revenue from the residence halls that Crocker will manage. From the bond, approximately $69 million will go to build the first residence hall, $12 million will be given to FAU as a lease payment for the land on the Boca Raton campus, the remainder will go to closing costs on the bond.

Crocker is working with the construction firm Balfour Beatty and the residence hall management company of Capstone Development.

Crocker is out money on the front end in development costs, which includes items such as architectural and design plans. The company is also putting up $3 million to $5 million in capital as a down payment on the bond.

FAU Chief Counsel David Kian, who negotiated the plan, said the school couldn't have done the deal without a developer signing on because it wouldn't have been able to get the $12 million up front for leasing the land. That $12 million will then be used in a separate deal to get financing for the stadium.

"We can't charge ourselves rent," Kian said.

Crocker will also earn an annual management fee of 4 percent or less of residence hall revenues from FAU. Early annual revenue estimates are about $7.5 million, making 4 percent equal to about $300,000.

FAU will maintain control over setting policy for the residence halls, as well as rental and fee rates.

That had been a concern of at least one trustee.

"Obviously Crocker is doing this for profit, otherwise they wouldn't be doing it," said trustee David Feder.

Kian said FAU will remain the "face" of the residence halls.

"That means all of the resident assistants, all of the program directors, all of the activities, those will be run exclusively by FAU's existing housing department," Kian said. "It is critical that students continue to see the face of residence hall life as the university."

A second residence hall is expected to be built within the next decade on FAU's Boca Raton campus, but trustees will make the ultimate decision on when it is constructed based on need.

Currently, FAU has about 2,400 residence hall beds on its Boca Raton campus and a waiting list some 600-students long each fall.

This year the demand for on-campus housing was so high FAU had to hold a lottery for spots.

While the crux of Wednesday's plan was the new apartment-style residence halls, what is most exciting for some people is the money it will provide for the proposed football stadium.

It's been nearly two years since FAU trustees gave the initial green lightto pursue a financing plan for a 30,000-seat stadium as long as it did notinclude using tax dollars.

School officials initially hoped to open the stadium by August 2010. But then the economy tanked and private fundraising dollars were in short supply.

Stadium details are expected to be presented to trustees this fall, andKian said there are several options on the table as far as a construction timeline.

There's a possibility it could be built in phases, constructing a field andseats for the 2010 football season and finishing it later.

It's also possible that FAU will downsize to 20,000 seats.

"Stay tuned, there is a lot coming up in the fall," Kian told trustees.

Good explanation of what occured today. Bottom line, we'll know what form the stadium will take in October and we WILL be playing on campus no later then 2011. ;D

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Great article and all good news.

I'm a proud lifetime member of the FAU National Alumni Association. Are you a member? Join now at www.faualumni.org.
Tradition in the Making, One Alum at a Time…
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Re: New Palm Beach Post Article about Today's BOT Actions

This is a great article but at the meeting, there was no 100% commitment that the money was going towards the stadium. I believe the exact words were "the money would be used for future projects within innovation village". That being said, i highly doubt that they will use the money for anything other than the stadium, but yet no definite response was given regarding the stadium.
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OWLUMNI said

This is a great article but at the meeting, there was no 100% commitment that the money was going towards the stadium. I believe the exact words were "the money would be used for future projects within innovation village". That being said, i highly doubt that they will use the money for anything other than the stadium, but yet no definite response was given regarding the stadium.

it's going to the stadium…
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Rick said

OWLUMNI said

This is a great article but at the meeting, there was no 100% commitment that the money was going towards the stadium. I believe the exact words were "the money would be used for future projects within innovation village". That being said, i highly doubt that they will use the money for anything other than the stadium, but yet no definite response was given regarding the stadium.

it's going to the stadium…

I believe that it was the stadium that was the entire reason for the whole innovation village project. This money is definately going toward the stadium. Otherwise they wouldn't have even bothered to get into this development deal in the first place.
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fauowls44 said

Rick said

OWLUMNI said

This is a great article but at the meeting, there was no 100% commitment that the money was going towards the stadium. I believe the exact words were "the money would be used for future projects within innovation village". That being said, i highly doubt that they will use the money for anything other than the stadium, but yet no definite response was given regarding the stadium.

it's going to the stadium…

I believe that it was the stadium that was the entire reason for the whole innovation village project. This money is definately going toward the stadium. Otherwise they wouldn't have even bothered to get into this development deal in the first place.

Touche'! ;D

When all is said and done and they go to market for the bond, they should have close to, if not, 30M towards the project cost of 69M with the other facets being contributed above the 12M coming from Crocker…this substantially reduces the risk of the bond and makes it very attractive to investors…not a bond guy, and Teambeer could shed more light on this, but it has to be rated at least an Aa2/AA (High Grade)…there is still the question of whether it will be a municipality bond, but regardless, this puppy is chewing on a serious bone.

Ratings for those who are unfamiliar with them:


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Re: New Palm Beach Post Article about Today's BOT Actions

OWLUMNI said

This is a great article but at the meeting, there was no 100% commitment that the money was going towards the stadium. I believe the exact words were "the money would be used for future projects within innovation village". That being said, i highly doubt that they will use the money for anything other than the stadium, but yet no definite response was given regarding the stadium.

The main component is the stadium but as multiple sources have stated, the idea is to get the stadium AND Innovation Village off the ground… meaning dorms, shops, parking garages and Greek housing.

Yes, Greek housing too. From this article:

"The stadium is part of FAU's Innovation Village project, which would incorporate the new fitness center and eventually include campus apartments, shops and fraternity houses.

"We are developing the Boca Raton campus to be a more traditional, residentially-oriented first-choice university," Kian said.



FAU has not yet chosen a contractor to run the stadium project. And Kian said he doesn't have a target date for the retail shops and fraternity and sorority houses."

P.S. I don't respond to guest posts. All guests are encouraged to register with the site.
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