Agenda Item No. V. B. 1.

Washburn University Board of Regents





SUBJECT: Washburn Greek Village



BACKGROUND:



The Washburn University Greek system is an important asset to the University and the community. The emphasis on leadership, scholarship, fellowship, and multigenerational involvement makes the Greek system an important component of the traditions and culture of the campus. The University wants the Greek system to thrive.



We are at a crossroads. Some of the houses are in excellent condition and need little to help them remain comfortable and competitive. Other houses are in need of improvement not only to meet competitive standards of student living but to meet functional and safety needs. Some have expressed an interest in creating new or newly remodeled space. Some have approached the University about building additional houses on campus. Some probably have capability to privately raise substantial portions of the cost of new or vastly improved facilities. Others may not.



Every Greek unit has a slightly different set of circumstances. The University's challenge is to treat individual houses, the Greek system, and the University fairly. This task presents a complicated challenge.



We engaged Treanor Architects, a nationally recognized consultant on Greek housing, to help us gather, sort and aggregate data. They have done an admirable job consulting with each organization to allow each to voice their dreams, opinions and concerns. We listened carefully.



We have tried to look at this from many different perspectives. We have explored a multitude of options, and think possibilities exist for how we can improve Greek housing.



Every Greek organization is an important partner with the University. We think there are reasons why some of the Greek organizations, but probably not all, will want to redefine their partnership with the University through a new housing development.



A new approach to Greek housing on campus is a big undertaking. The budgets run into the millions of dollars. Projects will need to be financed for decades, and the facilities will need to perform for many decades beyond that. Any solution is a long term commitment. Like all housing projects on campus, any project would need to be financially sound and self-sustaining.



With that in mind, we think there are advantages for Greek organizations considering housing projects with the University.











Washburn offers:



Land in a designated and specific area near existing on-campus fraternities that is ready for development.

WEA will assist with fundraising to assist each organization meet its goal for the project.

Washburn can finance the project with double tax exempt Municipal Revenue Bonds (like those used for both LLC and Washburn Village) with favorable interest rates.

Washburn has considerable favorable experience in both managing large complex building projects and managing facilities.

Washburn builds quality facilities to high standards of both durability and aesthetics. The living accommodations will meet or exceed the quality other university housing and have the services like phone, cable television and internet connections provided in all campus housing.

Both Washburn and the Greek unit will need each other more than ever to assure strong Greek units for decades into the future.

Washburn will provide professional housing management to ensure the high standards of housing quality both students and their parents expect.

Each Greek unit has the potential to have new facilities at a fraction of the cost each would need to raise individually to provide similar space.

Washburn respects the programmatic and ritual requirements of each Greek unit and understands the need for chapter spaces that serve the organization.



Greek organization participation:



Participate in design

$1 million fundraising

Agree to University housing management, maintenance and housing rates

Contract for 95% occupancy and non-residential member usage fee

Maintain general liability insurance.



As of January 31, 2006, the deadline for expressions of interest from each chapter, two fraternities indicated a definite request to build on campus in a new Greek Village, one is in agreement with most of the major conditions but wants clarification and further discussion. Two sororities have indicated they are not planning new facilities, but want to remain in the flow of information. One fraternity and two sororities had not responded by January 31.

We know such a step will require exhaustive discussions within each chapter. This is not a consideration to be made lightly by either the individual Greek units or the University. We understand the dynamic of both risk and opportunity that exists here.



The next step is to continue talks with those chapters wanting to be actively involved in a serious discussion based on the assumptions outlined in the study conducted by Treanor about what is technically and financially viable. This will be a discussion about new housing on campus. Those Greek units choosing not to be active participants in planning for the possibility of new housing for their units will continue to receive information updates.



More indepth discussions about the proposed project took place with three fraternities during the weeks of February 20th and February 27th. Each of these fraternities was asked to sign a letter of intent to confirm their interest in pursuing the Greek Village project.



WEA has considered the opportunities for fundraising and has been in direct consultation with some of the Greek groups at the group's request.



DESCRIPTION:



The Board of Regents Project Management Process calls for:

1. Assessment of the need and program statement involving work by constituents of the project and consultants when necessary to priorities needs, wants, and create a framework for preliminary cost estimates and financing schemes.

2. Fundraising Feasibility Study - investigate the potential of fundraising viability

3. Recommendation to request Architect selection - requires Board of Regents action.

4. Architect selection - requires Board of Regents action.



Design, bidding and construction follow according to the process with intermediate Board approvals along the way.



The assistance of an architect (Stage 3 above) is needed to find the best option and to develop the best design incorporating as many of the priorities as possible within the financial parameters of the Greek Village project. A timeline developed for the proposed project indicates a completion date of January 2009.





FINANCIAL IMPLICATIONS:



Depending on how many Greek groups participate, early and very preliminary estimates are each house will cost approximately $2 million, half of which would be raised from the individual group led by and in cooperation with WEA. The remainder of the project would be financed by self-supporting revenue bond financing issued by the University.



Financing Plan:



Cost per house:

26 residential beds $1,500,000

Development cost $ 400,000

$1,900,000

Financing per house:

Fundraising or down payment per house $1,000,000

Debt (20 yr 5% bond) $ 900,000

$1,900,000

Estimate revenue per house:

Estimated rents and fees $ 146,000

Estimated debt and operating expense $ 151,000

Net operating result year one $ (5,000)





RECOMMENDATION:



President Farley recommends the Board of Regents authorize the University to solicit and interview architects for the Greek Village. A final recommendation on architect's selection will return to the Board for approval in May 2006.



______________________________ _______________________________

Date Jerry B. Farley, President






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