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JANUARY 23, 2013
LMC will build student housing

www.heraldpalladium.com

By Ralph Heibutzki

BENTON TOWNSHIP - After looking into the idea for several years, Lake Michigan College is getting into the student housing business by planning to build a 200-unit project at its Napier Avenue campus.

The LMC board unanimously supported the idea in Tuesday’s meeting, following brief presentations by President Bob Harrison and developer Dick Davis of Student Suites, Independence, Mo., the company that will handle the construction. Hollis Miller, an architectural firm from Overland Park, Kan., oversaw the design.

As part of the kickoff process, the board authorized the college to form a nonprofit corporation that will own and operate the housing and negotiate a lease agreement for the property.

“Student housing represents a natural, logical extension of our commitment to offering a premier educational experience,” Harrison said in a college news release. “It broadens student life experiences, and will attract more students to LMC by making our programs accessible to students from outside our immediate region.”

LMC Board President David Maysick voiced similar confidence that the project will be successful. “We believe this project will be good for our students and will ultimately contribute positively to the college’s bottom line,” he said in his own statement.

LMC is not the first community college in the area to build student housing. Southwestern Michigan College built a dorm on its Dowagiac campus in 2009 and another in 2010 and will open a third next fall, housing a total of about 390 students.

LMC’s plans call for construction on the Napier Avenue campus to start in winter 2014, with a target date of opening by the fall semester of that year, according to the college. The site will be on the west side of the campus, as people come in from the main entrance, Harrison said.

The estimated cost is $6.5 million, which the newly formed nonprofit corporation will finance by issuing bonds to finance the project - essentially, allowing the college to retain ownership of the asset without being obligated for the debt, Harrison said.

“It’s a different financing mechanism that allows us to fully fund it (the project) using tax-exempt bonds rather than a conventional loan, so the costs of borrowing will go way down,” Harrison said. “It will not require a cash outlay by the college.”

The college would recover the bond issue costs over 30 years through housing fees, its release said.

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The board’s action wasn’t specifically intended to compete with other community colleges that have their own student housing, such as Southwester Michigan College, Harrison said after the meeting.

“The research shows that residential housing, for community college students, has a positive impact. It helps integrate students who are looking for a residence opportunity that we don’t have,” he said.

Harrison said seven community colleges around the state do have student housing. Most are located in rural areas, with the exception of Jackson Community College, he said.

In LMC’s case, the college had been actively studying the idea of doing its own student housing program for several years, Harrison said.

“Our focus for the last several years has been programs and services. We felt that we’ve made good progress on those, and now we’re looking at other amenities that we’re able to offer students,” Harrison said. “This offers additional services, not only to students living in dorms, but to the other 3,500 to 4,000 students.”

In talks 5 years

The Student Suites company has been in the student housing construction business for about 15 years, said Davis, the company’s director of development, acquisitions and finance.

“We started a dialogue (with LMC) about five years ago,” Davis said after the meeting. “A lot of our business comes from first projects for two-year colleges. That’s kind of our niche, and so we had Lake Michigan on the radar, to try to convince them (to pursue a student housing project).”

Some of the company’s notable recent projects include student housing for Gogebic Community College in the Upper Peninsula; Florida Keys Community College in Key West, Fla.; and North Carolina A&T University in Greensboro, N.C., Davis said.

“There’s a growing trend among two-year colleges to provide housing, that did not (do so) in the past. We did hire independent folks to do a market study to make sure that the market is there. We’re confident that it’s going to be a success,” he said.

Once completed, the new units will be supervised by an on-site property manager hired specifically for that purpose, Harrison said.

“We think we’ll be able to offer a first-class housing opportunity for our students,” he said.