Jun 22nd 2016 | Posted in Education by Peter Partheymuller

$1.1 billion public-private partnership will double school’s capacity by 2020

Officials with the University of California (UC) System have been planning to expand the campus in Merced for several years. With the state’s tight finances and a desire to accelerate the process in mind, the system’s regents decided to build out the 11-year-old campus using private capital and have gone through a solicitation process that resulted in the decision last week to choose a private developer for the project.

Rendering from UC Merced

Rendering from UC Merced

Called Project 2020, the public-private partnership (PPP/P3) will double the physical capacity of the campus by 2020. The new construction will enable the school’s enrollment to grow from its current 6,700 students to 10,000 within five years and, eventually, to 25,000. UC Merced was founded in 2005 to establish a public research university in the San Joaquin Valley. The school was built to fill a niche and serve a population whose historical rate of college attendance had been quite low.

Despite the fact the university is so young, its growth has been quick. Officials note that its classroom facilities are at capacity, there is a waitlist for on-campus housing and faculty offices and research labs have been forced to move off campus. They also contend that the PPP method will allow the school to improve its facilities much faster than it otherwise would be able to.

“UC Merced, the youngest campus in our system, is poised to become a model for our other campuses as we look for the most efficient ways to construct, operate and maintain facilities that enable us to pursue our teaching, research and public service missions,” UC President Janet Napolitano said.  “As the first public research university to be created in the 21st century, UC Merced is prepared to build on its remarkable academic achievements as the campus itself is built out to accommodate future growth.”

Project 2020 will add about 920,000 square feet of space. New classrooms and research areas will be constructed as flexible, mixed-use spaces. The university’s allotment of student housing will double, and new dining facilities and recreational areas also will be built.

The PPP agreement calls for the state to pay about two-thirds of the cost, which will come in the form of $600 million in bonds and $157 million from the university. The private partners will contribute $386 million up front and make back their money through $51 million annual payments from the university over the length of the 35-year agreement. UC Merced will retain ownership of the facilities and the land.

The UC regents approved the Project 2020 budget and the delivery method in November 2015. They will formally approve the design and the external financing in July, and execution of the formal contract will occur in August. Construction is scheduled to begin in the fall.

Public-private partnerships are excellent tools for funding infrastructure projects, and SPI’s team of government affairs consultants are experts in the model. Contact them today.