BOONE — The University of North Carolina Board of Governors earlier this week granted approvals for several Appalachian State University projects currently estimated at $250 million.

The approvals include authorization of a ground lease with Beyond Owners Group for the west campus student housing project, approval of financing and construction for the Kidd Brewer Stadium north end zone facility, approval of Millennial Campus expansions, approval to move forward with planning for athletic facilities at the old WHS site and endorsement of a steam project.

The university’s expansive student housing project moves ahead with authorization from the BOG of a ground lease with Ohio-based Beyond Owners Group — a financial arrangement that is part of the public-private partnership (P3) under which the 2,100-bed, five-building housing project (four residential structures, one parking deck) is being constructed.

The estimated project cost of $191 million includes development and financing for the project, which is planned in three phases with completion dates of fall 2020, fall 2021 and fall 2022, ASU said.

Because the dorms will replace older housing stock, the project does not represent a significant net increase in the number of beds on campus. The project, according to ASU, renovates or replaces seven residence halls: Bowie, Coltrane, Eggers, Gardner, Winkler, Justice and East, providing a mix of unit types within each building. Parking facilities include the 470-space parking deck and 340 surface parking spaces.

Earlier this year, through a competitive procurement process, Appalachian selected Georgia-based RISE: A Real Estate Company as the developer for the project. The P3 student housing project team consists of RISE, Beyond Owners Group as the asset manager, architect Niles Bolton Associates, design consultant Jenkins-Peer Architects, general contractor Choate Construction and RBC Capital Markets as underwriter.

The cost estimate of $191 million is up from a previous estimate of $182 million presented in the spring, when Appalachian State selected RISE as the developer for the project. But the figure is still less than the $255 million Appalachian State asserts the project would cost if it developed the same project itself.

Approximately 330 beds will be constructed by RISE and purchased and owned by Appalachian using proceeds from its general revenue bonds, Series 2016C, to replace the former Winkler Hall, ASU said, while approximately 1,770 beds and the parking deck will be financed and owned by Beyond Owners Group through tax-exempt debt.

ASU Vice Chancellor for Business Affairs Paul Forte noted these numbers are approximate, and the number of beds could total between 2,100 and 2,200.

The ground lease agreement with Beyond “will serve as the foundation for related agreements on the development and management of the 1,770-bed and parking deck portion of the project,” ASU said.

A ground lease is an agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner, the university said. The agreement between the university and Beyond will allow Beyond to obtain project financing. Beyond will have a leasehold interest in the project site, and will be obligated to develop the project and own the privately financed improvements for the duration of the ground lease. Appalachian will have the right to approve plans and specifications for the project.

A development agreement between Beyond and RISE will obligate RISE for the on-time and on-budget delivery of the project and enable RISE to engage the general contractor, leading to a guaranteed maximum price, to be established as the project details are finalized, ASU said. In the event of late delivery, RISE will be responsible for providing temporary housing and related services.

“(ASU) will not be a signatory to this agreement, but will retain oversight of design and construction through the ground lease agreement, and will not be at risk for cost overruns during construction,” the university said.

A management agreement between Beyond and ASU will: obligate ASU to manage the project on behalf of Beyond to the university’s housing standards, including maintenance, custodial, residence life and administrative services; obligate Beyond to provide for capital reinvestment and long-term asset management of the project; provide for reimbursement to the university for its services as an operating expense to the project; and set annual budgeting and capital improvement planning procedures, ASU said.

Under a parking facility lease, Beyond will lease the parking deck to ASU through a 10-year, triple net lease, making the university responsible for ongoing expenses of the property, including maintenance and utilities. The lease revenue to Beyond will repay the debt service on the financing for the parking deck, ASU said, and under the terms of the lease agreement, Appalachian will have exclusive access to the parking deck, will operate and manage the parking deck and will retain all revenues generated.

Kidd Brewer Stadium north end zone facility

End zone project

An architectural rendering of App State’s planned end zone project.

The Kidd Brewer Stadium north end zone project, which received BOG approval for planning earlier this year, was approved by the BOG for financing and construction. The university said the facility will include 80,000 to 100,000 square feet of space and will accommodate various athletics and academic uses, including athletic training and nutrition science, as well as conference and continuing education training space, an orthopedic clinic, dining facilities, a team store, hydrotherapy, approximately 1,000 premium (club) seats and offices for coaches and athletics staff.

The end zone facility will replace the 45-year-old Owens Field House, which is approximately 34,500 square feet. DPR Construction is the construction manager at risk and was awarded the pre-construction services contract, ASU said.

“An enhanced experience for student-athletes and fans can go a long way in recruiting new students,” ASU Athletics Director Doug Gillin said in a statement.

The project budget is $45 million; BOG meeting materials indicated that 81 percent of the project will be financed by debt under Millennial Campus authority (to be repaid using tenant lease revenue, ASU said), 11 percent will come from athletics gifts and receipts and 8 percent will come from dining receipts.

The facility plans include a schedule to open for the fall 2020 football season.

Kidd Brewer Stadium rendering

This is an aerial view rendering of Kidd Brewer Stadium with the planned north end zone facility.

Millennial Campus expansion

The BOG also approved ASU’s requested Millennial Campus designation for the 75-acre old Watauga High School site (“Appalachian 105”), the 2.1-acre Legends site, a 0.6- acre Howard Street property, 5.5-acre Appalachian Panhellenic Hall site and 6.7-acre expansion of the existing University Hall Millennial site.

Millennial Campus designation gives the university the flexibility to enter into agreements with private sector firms to develop campus properties, facilitates issuing bonds to finance development of the properties and allows the university to keep all revenues related to leasing space in the properties.

“These millennial status-designated projects present us with opportunities to think and act more creatively, quickly and nimbly in ways that further our research, teaching and service mission while also enhancing the economic development of the region we serve,” ASU Chancellor Sheri N. Everts said in a statement.

Conceptual designs for Appalachian 105

The BOG approved the university’s request to move forward with the conceptual design process — including $1.18 million in advance planning costs — in order to begin developing competition and training facilities for the university’s track and field, tennis and softball programs at the old WHS property.

Some of the facilities require relocation because of the Kidd Brewer Stadium north end zone project; others will be enhanced to improve facilities for student-athletes.

ASU’s current plans are for the property to include App State’s track (currently located at Kidd Brewer Stadium), a multipurpose field, indoor and outdoor tennis courts, a softball field, indoor batting cage, offices, concessions and storage buildings, with project costs estimated at $11.8 million, to be funded through donations, ASU said.

Forte emphasized this project will develop only a small portion of the Appalachian 105 property.

“Other ideas under consideration for the future include facilities to meet the university’s needs for collaborative academic spaces, event space, parking, residence halls and additional recreation accommodations for students,” he said.

A hotel and conference center was also mentioned in BOG meeting materials.

Stadium parking lot steam utility improvement

The BOG also approved a resolution for endorsement of a steam utility improvement project that will deliver concentrated steam used to provide hot water and heat to campus buildings, including the Quinn Center, Kidd Brewer Stadium north end zone project and the university’s residence hall renovation/replacement project, ASU said.

The project is expected to cost $3.5 million and will be funded through trust fund revenue.

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