Increasing demands for capital expansion combined with a continued weak economy make partnerships with private entities an attractive option for financing new campus facilities. These partnerships are often fraught with complexity -- and not only because of their legal and tax ramifications. There are also the ramifications of communicating and collaborating with a variety of off-campus constituents. Successful projects engage these constituents both early and deliberately.
For advice on including off-campus constituencies in the project in constructive ways, we turned this week to Dale McGirr, senior planner with GBBN Architects, who also oversaw public/private partnerships during his 29 years at the University of Cincinnati (22 years as a cabinet officer).
Being Clear on the Stakes
"At most medium and large-sized public institutions," McGirr remarks, "twice as many students live residentially near a campus as live on the campus. The era of treating housing for those students as someone else's problem is over -- developing an off-campus housing policy needs to be a top priority, and the quality of student life in that shadow campus district, as well as the quality of community relations in that district, are increasingly becoming strategic priorities for institutional leaders to address."
McGirr notes that public/private partnerships are a strategic device for addressing the off-campus housing issue because they provide a means for an institution to directly influence quality of residential life near campus and the quality of the business district in the area around the campus, without actually owning the property.
However, legal risks and credit risks aside, management of a public/private partnership project also carries both significant risks and significant opportunities for improving relations with local, off-campus constituencies. McGirr suggests that three steps are essential to making sure the project brings neighborhood, campus, and local business together rather than further estranging them:
- Thorough internal vetting of the project to ensure that the institution speaks to the community about the project with one voice
- Crafting an intentional message about the project's goals and complexities
- Being aware from the start of what town-gown issues are likely to come up, and being prepared to address those issues proactively
"You can send all the RFPs out you want; if developers see combative, uncooperative constituencies, they are likely to decide that they have better things to do with their time. They are less likely to respond to RFPs that would clearly bring them into that situation and into a series of public battles."
Dale McGirr, GBBN Architects
Vetting the Project Internally
"There is usually a good 6-12 months of work that needs to take place within the institution," McGirr cautions, "in terms of policy-making and limit-setting, so that institutional representatives are well-prepared to speak intelligently with the community about their goals, their policies, the level of work the institution is willing to invest in the project, and the amount of risk the institution is willing to absorb. All of this needs to be vetted within the institution before attempting to reach out and form relationships with the city or with a developer around the project. The city and the developer will have these questions."
McGirr notes that a public/private partnership will require in-depth conversations with many off-campus constituencies, all of whom will come to the table with many questions to ask, and all of whom will need to establish a degree of buy-in for the public/private project. The institution will need to coordinate not only with developers, but also with city and county authorities and with leaders from both the local residential and business community.
Crafting an Intentional Message
"When you go to your local community, you're the suspect in any crimes of development from the past 100 years," McGirr remarks, noting that as institutions have expanded over past decades -- typically, in the past, with minimal outreach and collaboration with the local community -- they have often built up a bank account of local resentment and suspicion. "It is not useful to deny or argue past disputes," McGirr warns. "The events of the past are probably well-known among your off-campus constituents, and the style of American higher education in the past wasn't necessarily to partner but to grow."
McGirr emphasizes the importance of preparing an intentional message to articulate how the future between town and gown can be different; how business, community, and institutional goals can be achieved together; and why it is important not to fight but to problem-solve. "Acknowledge the past," McGirr suggests, "but then frame the conversation around having a common problem. If the quality of off-campus student housing and of the business district is such that the area is in jeopardy of losing economic development opportunities to districts that are further away, then tell that story and note the joint incentive that you have to collaborate in a new partnership to align community health and institutional health. Communicate that regardless of your shared history, this is a truism about the future and that you are ready to move forward."
McGirr notes that this is also why internal vetting prior to outreach is so crucial. If your internal constituencies (including your alumni, your board, and your faculty) are not on board with the project, you may end up in a situation where several internal voices are relaying differing messages to external constituents.
"You can't wing this statement at a reception. Your internal constituents need to understand and own the story that the entire zone of the shadow campus is deteriorating and that only the combined efforts of everyone will reverse that. The institution must articulate this message with one voice to its external constituents."
Dale McGirr, GBBN Architects
Issues to Cut Off at the Pass
We asked McGirr what issues tend to present the most significant threats to effective communication and partnership around a public/private project. McGirr suggests that one of the major issues is the way that external constituents will perceive the complexity of the public/private agreement. "These agreements are legally and financial complex by their nature," he notes. "There is a tendency for external constituents to view that complexity as intentional -- as a means for the institution to obscure what is actually being decided. There may be a day when you are all looking together at a complex diagram of the deal, and your off-campus constituents are skeptical. They wonder if they're missing something. They may remember ENRON creating offshore entities to hide debt; we see all these entities doing that in media, and there is a tendency to transfer that suspicion to the university."
"You have to work to make sure complexity isn't misconstrued. You need to prepare external constituents ahead of time for the complexity of the deal, educating them about what that complexity in fact means."
Dale McGirr, GBBN Architects
McGirr suggests two steps for educating constituents early about the complexity they'll see:
- First, give the history and explain why the deal is complex. "Blame the lawyers," McGirr remarks. "You can say, buying a house isn't supposed to be as complex as it's now been made to be, but there are so many legal requirements to satisfy. This is the same way. Every deal has to comply with these requirements."
- Second, give the reason for the complexity. "Point out the specific advantages of working through this complexity and understanding it," McGirr suggests. "For example, if the complexity involves a tax credit and would reduce the cost of the project, talk about that. That's a good thing. You can say, the reason for this complexity is to save on costs."
A good approach to communicating about the complexities of a public/private agreement, McGirr suggests, is to assume that the others in the room also have constituencies outside of that room to which they will need to explain things after your meeting.
"Give them sound bytes," McGirr advises. "Give them analogies that will help them explain to their constituents. They need a couple of solid bullet points that explain the issue. You aren't just working to get them off the fence themselves; you're also preparing them to speak to their own constituents."
Done well, this type of early, proactive communication can build buy-in and good will, while also empowering representatives of your off-campus constituencies to serve as advocates for the project.
Increasing demands for capital expansion combined with a continued weak economy make partnerships with private entities an attractive option for financing new campus facilities. But before forming partnerships, an institution must understand various structures and options, as well as possible implications of the partnerships on risk profile, debt capacity, credit rating, and even town-gown relations.