EMU continues with private student housing partnership

When Christina Trotter, a rising sophomore at Eastern Michigan University, was asked what her priorities were for new and improved campus housing, one thing immediately came to mind: air conditioning. Record high temperatures have gripped Michigan this summer, and many of the dormitories on the Ypsilanti campus are old; only one has central air.

“I had my box fan running all year; [my roommates and I] was wearing shorts and a tank top every day,” said Trotter. “Active air conditioning was something my friends and I agreed on.”

AC is just one item on a list of improvements and amenities university leaders want to bring to dorms, in addition to more common space, better Wi-Fi, upgraded appliances and a more modern style. But the institution has lacked the resources for this for years.

EMU officials say that will soon change thanks to a new public-private partnership. In June, the university’s board of trustees approved a 35-year, $200 million deal with Gilbane Developers to build two new dormitories, demolish half a dozen old buildings and outsource maintenance costs and renovations to the remaining residences. And of course there will be AC ​​in all rooms.

“We have students who want to live on campus, but we have buildings that haven’t been able to be maintained the way we want them to,” says Jeanette Zalba, EMU’s director of housing and residence life. “This partnership really gives us the opportunity to make these spaces not only new, but also exciting.”

To pay for it, EMU will turn over all of its student housing to a third party, EMU Campus Living LLC, which will use the money to pay Gilbane for construction and maintenance costs as well as for university housing services.

The deal, which is nearly complete, will essentially lease all of EMU’s student housing to a private developer for at least the duration of the contract. University officials say the partnership allows them to fund an overhaul of student housing while keeping costs for students relatively stable.

Not everyone on campus is happy with the arrangement. In December, the university’s Faculty Senate passed a vote of no confidence in President James Smith, CFO Michael Valdes and Smith’s chief of staff, Leigh Greden, in large part because of the administration’s handling of the deal.

“Pushing to sell out of dorms in the middle of a pandemic was the straw that broke the camel’s back,” Suzanne Gray, president of EMU’s Faculty Senate, said in a press release after the vote last year. “The administration made a big show of soliciting ‘input’ [on the project]but it is clear that this decision was already predetermined.”

“I feel like we’ve done everything we can about engagement,” Valdes said. “I understand there are faculty members who have a different perspective.”

Robert Carpenter, education professor and chairman of the Faculty Senate’s Resources and Budget Committee, said the partnership with Gilbane is the latest in a series of privatization efforts the university has undertaken, including in campus dining and parking, among other services. He is concerned that the university, in its pursuit of private funding solutions, has failed to consider the full effects of giving up large revenue streams such as parking and rent.

“As we saw more and more dominoes falling to privatization, the faculty became concerned,” he said. “There must be some deep conversations about priorities and how we can come up with innovative internal solutions through budgeting.”

Zalba said she understands that some level of control will be lost in working with Gilbane, but she feels the sacrifice will be worth it.

“If there’s something that’s lost, or that people sense we’re losing, the gains are much greater,” she said. “We’re doing something that, despite all the control we had before, we couldn’t do.”

Catching up with the competition

EMU has struggled with declining enrollment since before the pandemic. Total enrollment fell 25 percent from 2016 to 2021, according to a recent study by the National Student Clearinghouse Research Center.

Some reasons for the decline are completely outside EMU’s control; Michigan’s demographic shift and low birth rate have most colleges in the state looking at declining enrollment. But EMU’s strategy takes that into account: While many public-private student housing partnerships stem from a need to expand student housing, the EMU campus will house about 1,000 fewer beds after the Gilbane arrangement is completed.

Valdes said the university’s outdated residence halls have contributed to the decline in enrollment, and surveys of nearly 2,000 students show a strong desire for improved dormitories.

“We haven’t been able to invest in the properties to make them modern and in line with what today’s students are looking for,” he said. “We feel it has been a competitive disadvantage for us.”

Lander Medlin, president of APPA, an association of physical facilities administrators that serves as a national resource for educational facilities, said renovating dorms and other facilities is a good strategy for both recruitment and retention.

“We know that 67 to 70 percent of parents and students make a decision whether to come to the institution or not, based on the look and feel of the campus on the first impression, within the first 10 minutes,” said Medlin. “So part of it is about curb appeal, but you also want to create an environment where students feel a sense of belonging in a way that helps them identify meaningfully with the institution.”

Colleges and universities are increasingly turning to private developers to expand, improve and maintain their aging facilities. According to a 2021 report by Ernst & Young, in 2003 there were only three public-private partnerships (P3s) in higher education, with a combined value of $100 million. In 2016, about 30 P3 deals—worth over $3 billion—were signed, and by 2021, $11 billion worth of P3 deals were under negotiation, according to last year’s “Higher Ed P3 State of the Industry Report” from the management company Brailsford & Dunlavey.

Just 45 minutes down the interstate from EMU, Wayne State University entered into a 40-year, $308 million deal with Corvias Property Management in 2017 to expand and modernize student housing. Western Michigan University and Central Michigan University have also entered into P3 campus housing agreements. Zalba said those were the wake-up calls that helped accelerate EMU’s foray into private development, especially as Michigan’s smaller public universities compete in the same rapidly shrinking market.

“Given that we’re in the same boat, we have to maintain a competitive edge to students who are looking at all these schools,” she said. “We want to offer something that is just as exciting.”

Trotter, the rising sophomore, said she and her friends already have their hearts set on living in a new student apartment building as upperclassmen.

“I’m excited for all the future students who will get to experience the new housing, and I hope it brings a lot of new students to EMU who might not have considered it before,” she said. “I wish I was a few years younger so I could live in the new dorms every four years. That would be great.”

The costs of privatization

The P3 boom in higher education has come with a new set of problems for some universities, raising questions about institutional autonomy under these agreements.

In May 2020, as universities across the country prepared to go remote in response to the pandemic, institutions that had partnered with private developer Corvias — including the University System of Georgia and Wayne State in Detroit — received letters reminding them about their debt obligations and the importance of filling campus beds to pay them off.

Maintenance and upkeep issues have also arisen. At Howard University, where Corvias manages 60 percent of campus housing, students slept in tents and on air mattresses outside the campus center for over a month to protest mold, mice, flooding and other unsanitary conditions they said had gone unaddressed by property managers.

Valdes said the example of Howard and other similarly troubled schools informed EMU’s insistence on an oversight board for Gilbane’s maintenance and janitorial services, with financial hurdles tied to poor performance.

“We definitely went to school on which projects worked well and which projects didn’t,” he said.

“There are other institutions where an outside company builds it, runs it and manages it, and that’s in some ways removed from the philosophy of the institution,” Zalba said. “That’s not the case here at all.”

Donald Cohen, founder and executive director of the research and advocacy center In the Public Interest, said that beyond specific incidents like those at Howard and Wayne State, there are costs to private business intervention in higher education.

“You lose the public purpose of higher education as a public good: expansion of knowledge, a more educated population, a more robust economy,” said Cohen, who is also the author of The privatization of everything (The New Press, 2021). “To the extent that you add private interests, you weaken the public purpose … they are not just conflicting interests, they are competing interests.”

Cohen also said that with less direct oversight of maintenance, cleaning and maintenance costs, it may end up being more expensive in the long run for universities to outsource to a private property manager, who in turn will often subcontract specific services.

“It’s all legitimate business activity, but money from students and families is going into this business and the business is skimming off the top because that’s how they operate,” he said.

Carpenter, the EMU education professor, said there has been a “fundamental shift” toward privatization in higher education, which he attributes to two primary factors: the defunding of higher education by state legislatures and the growing corporatization of university structure and top management.

“I think there’s an ideological tension between faculty, who tend to see higher education as a public good, and administration, but especially university boards, because most board members come from business,” he said. “I fear there are people around campus now who don’t see students as students, but as sources of income.”

Carpenter said this means university leaders, when faced with funding problems, are more likely to turn first to corporate solutions like private partnerships and outsourcing.

“There’s that old saying in activism,” he said. “‘If the only tool in your tool belt is a hammer, everything looks like a nail.’

Leave a Reply