35 Smart Building Ideas: University Business Nov. 2009
Funding: Methods and Messaging
17. Partner with a private developer. These firms can provide guidance in initiating and navigating the financing process. One such firm is Ambling University Development Group, which has helped secure bonds for 41 campus projects in the last decade. Utilizing a college’s tax-exempt status, the firm establishes a single-purpose LLC to serve as the project owner as well as to ground lease the required property from the institution for the term of the financing.
Tax-exempt bonds are issued for the total cost of the project, which is solely guaranteed by Ambling, then paid back by rental, dining, and/or parking revenues from the project over a 30-year term. The separate LLC means that associated debt does not encumber the institution. Once the bonds are fully repaid, the ground lease expires and the land plus all improvements revert to ownership by the institution. Ambling recently partnered with Southern Polytechnic State University of Atlanta to develop a $45 million housing and dining complex, to be completed by next fall.