UNCW is taking a different route than it has in the past to add student housing to its campus in the amount of about 1,800 beds.
"The university is pursuing the financing and construction of the project through a public-private partnership," said Miles Lackey, vice chancellor for business affairs at the University of North Carolina Wilmington. "We believe that this structure is an effective way to bring the facilities online."
The partnership would involve the issuance of tax-exempt bonds of up to $152 million, according to city of Wilmington documents, which address the issue because federal tax law requires the city to hold a public hearing on the matter and sign off on it.
But while the issuance threshold for the bonds is $152 million, the total anticipated project cost is about $144 million. By the fall of 2020, 1,034 beds would be added, with 778 more by the fall of 2021, Lackey said, for a total of 1,812 beds.
In addition to UNCW, the partners on the project would be Balfour Beatty Campus Solutions as the developer, a public finance authority as the issuer of the bonds and a non-profit student housing foundation as the borrower.
A housing master plan updated last April said officials had anticipated a more than 1,300-bed deficit in freshman bed capacity by the fall of 2021. But that has increased to a shortage of 1,900 beds, Lackey said.
When Hurricane Florence made landfall near Wrightsville Beach in September, it affected some buildings at UNCW, including residential halls, causing a total of at least $140 million in damage campuswide.
While some halls were repaired after the storm, students in University Apartments, which was slated to be at least 50 percent replaced in the housing plan one year and completely replaced the next, had to be moved or find somewhere else to live.
About 100 of the 400 displaced students from University Apartments were accommodated in other residences on campus, while many of the others were placed in off-campus housing as a result of UNCW working with housing providers, Lackey said.
"We had already been planning to take the apartments offline, but unfortunately it [the hurricane] accelerated that process," Lackey said.
Because of federal tax regulations, one of the steps in the process for financing student housing is to get the approval of the Wilmington City Council, although the city would have no liability or debt as a result, the city documents stated.
"The city pledges neither its taxing power nor revenues for these bonds, and the bonds will not affect the city's debt ratio or legal debt limit," according to a memo from Sterling Cheatham, Wilmington city manager, in the agenda documents for Tuesday's Wilmington City Council meeting.
The notice of public hearing, another required step before the bonds can be issued, states that Wisconsin-based Public Finance Authority would issue the student housing revenue bonds in one or more series of issues and lend the proceeds to CHF-Wilmington LLC, whose sole member is the Collegiate Housing Foundation, a non-profit corporation based in Alabama.
The purpose would be to "to finance the acquisition, construction, furnishing, and equipping of student housing facilities containing, in the aggregate, approximately 1,800 beds (the 'Student Housing Facilities'), and amenity space, along with associated site development and off-site infrastructure improvements including, but not limited to, surface parking improvements, stormwater retention facilities, common areas between the buildings comprising the Student Housing Facilities, and demolition of existing improvements to construct a portion of the Student Housing Facilities (the 'Project') on the main campus of the University of North Carolina at Wilmington (the 'University')," the notice states.
A portion of the facilities -- surface parking improvements, the stormwater retention facilities, amenity space, classroom and office space, common area space and related off-site landscaping and infrastructure -- will be owned by UNCW, according to the notice.
Meanwhile, CHF will own the remainder of the project, including, but not limited to, the student housing facilities, the notice states.
The Wilmington City Council meets at 6:30 p.m. Tuesday at City Hall.