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AGB ConferencePublic-Private Partnerships &

Real Estate VenturesTorrey Pines, CAJanuary 23, 2012

Presented by: Jeff W. Rountree Dr. Stephen JordanCEO, UMW Foundation PresidentPresident, Eagle Property Holdings, LLC Metropolitan State College of Denver

•Located in Fredericksburg, Virginia, 50 miles between both Washington D.C. and Richmond, Virginia.

•Selective four-year Master’s-level liberal arts institution

•4,388 undergraduate students and 913 graduate students

•Three regional campuses

•State-supported with $96 million annual budget

•4,768 perspective applications for 990 available spots (FY11)

UMW Overview

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UMW Foundation Overview

Founded in 1975, the UMW Foundation is an independent and separately incorporated 501(c) (3) organization and is responsible for receiving, managing, and administering donated assets for the support of the University.

• An independent Board of Directors controls all Foundation business and supervises staff members.

• The CEO leads the day-to-day operations of the Foundation and reports directly to the private UMWF Board of Directors.

• The UMW Foundation does not raise money.• The relationship between the University (State) and the UMW Foundation

is outlined in a Memorandum of Understanding (MOU).• Most activities involve Fund Management and Real Estate.• Total FY11 Assets under Management of $178,000,000

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UMWF owns a total of 790,163 square feet under roof:

• Multi-Family (3) 351,260 SF/over 8.65 acres 12 buildings /280 units/978 beds

• Parking Garage (1) 192,027 SF/560 pay spaces• Retail/Commercial (2) 190,021 SF• Office Space (3) 39,364 SF• Academic Space (1) 8,637 SF• Single-Family (4) 6,310 SF• Highway Bridge (1) 2,544 SF/192' clear-span bridge

Real Estate Holdings (as of June 2011)

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Eagle Village

A Mixed-Use Development Project

of The University of MaryWashington Foundation

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Property Overview – Parcels

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University Village Concept

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Phase 1 and Phase 2

Phase 1

Phase 2

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Eagle Village Phase 1

Phase 1 Includes Three Structures:1. Pedestrian Bridge 2. Student Housing

A 5-story structure that contains 156 two-bedroom apartments constructed in a 211,531 square foot “U” shaped complex, fronted by a two-story rotunda.

3. Mixed Use BuildingA 244,207 square foot structured deck for both automobiles and bicycles.The Mixed Use Building is wrapped with the offices facing Route 1 and has retail on the first floor facing south and east.

– New Retail and Restaurant Spaces (30,000 square feet)– New Class-”A” Office Space (36,000 square feet)

Fee Developer Concord Eastridge (CEI) hired to Manage Project

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Eagle Village Phase 1(continued)

Phase 1 – Total Budget of $88.9 Million1. Pedestrian Bridge

Construction Management (CM) contract$5.7 million cost

2. Student Housing (Eagle Landing)Construction Management (CM contract)$60.7 million cost. $97K per bed all-in/$91.7K excluding land

3. Mixed-Use Building (Retail/Office/Structured Parking)Design Build contract$22.5 million cost

Financing – Mixture of Taxable and Non-Taxable Variable Rate Bonds w/Synthetic SWAPUniversity Support Agreement in Place

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Final Design

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View from UMW

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Eagle Village Pedestrian Bridge

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Eagle Village Mixed-Use Complex

Eagle Village Eagle Landing

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Mixed-Use Building, Eagle Landingand Pedestrian Bridge

1. Progress Phase II DevelopmentSelect Service Hotel (90-100 rooms)Connector to Mary Washington Healthcare

2. Master Planning Efforts for Phase IIIWork with Burt Hill for Concept Design and Analysis

• Continuing Care Retirement Community (CCRC)• Additional Student Housing• Market Rate Housing• More Commercial/Retail• Academic Use?

Discussions with Mary Washington Healthcare (formerly MediCorp)

What’s Next?

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Burt Hill Master Plan

HOTEL DESIGNnbj Architecture

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Jeff W. Rountree, CEOUniversity of Mary Washington Foundation

jrountre@umw.eduwww.foundation.umw.edu

www.eaglevillage.com

Eagle Village

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Metro State Overview

• Located in the heart of Denver, Colorado, Metro State shares the Auraria Higher Education Center (AHEC) with two other education institutions—University of Colorado at Denver and Community College of Denver.

• Metro State has the second-largest undergraduate student population in Colorado—approximately 24,000 students.

• It has the best value in higher education combining academic excellence with the lowest tuition of all 4-year institutions in Colorado.

• It boasts the highest number of students of color in the state—roughly 7,400 students or 31% of its student population.

• Nearly 80% of our graduates remain in Colorado

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Hospitality and Tourism

• Hospitality and tourism is Colorado’s second-largest industry—bringing $13.9 billion to the state in 2009—and therefore has substantial workforce needs

• Metro State’s Department of Hospitality, Tourism & Events—

Is widely considered the most comprehensive and cost-effective baccalaureate hospitality management program within a 400-mile radius of Denver

Has more than 600 students

The Project

• In 2010, Metro State’s Board of Trustees approved building a hotel and hospitality center on the Auraria Campus

• Total project size is about 126,000 gross square feet

• Includes approximately 28,000 square feet of laboratory, classrooms and academic space supporting the Hospitality, Tourism & Events Department—referred to as the Hospitality Learning Center

• Also includes about 5,000 square feet of meeting and conference space

• The hotel will have 150 rooms, dining area, exercise room, business center, sundries shop, and a quick-serve restaurant

• Built on a prominent site, highly visible to pedestrians and vehicles, and conveniently located near many major Denver sights and attractions

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Conference Center

HLC

Hotel

Auraria Campus

Colorado Convention Center

Denver Performing Arts Complex

Denver Central Business District

Pepsi Center

Hotel & HLC

Auraria Campus

Mile High Stadium

Colorado State Capitol

LODO & Coors Field

Larimer Square

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Legal Framework

• Metro State entered into a ground lease with AHEC

• Metro State created HLC@Metro, Inc.—a special purpose corporation—to own and operate the hotel and hospitality learning center

• It also formed the Metropolitan State College of Denver Roadrunner Recovery and Reinvestment Act Finance Authority to issue the bonds required to finance the project

Approves Articles and Bylaws, Appoints

BoardDesign/Build (or other Construction) Agreement

Franchise Agreement

(QMA)

Metro State Hotel/HLC Project Structure

Hotel Operating Co

(Sage)

HLC@Metro, Inc.

Special Purpose Corp. (Nonprofit Corporation)

owns and operates Hotel/HLC

DeveloperDesign/Builder

(Mortenson)

Architect(RNL) MSCD Foundation

Franchisor(Marriott)

Guaranteed Maximum Price Conversion to Fixed Price Guarantee

Operating Agreement/MOU

(QMA)Operating Agreement

(QMA)

ArchitectAgreement

Metro State

Ground Lease

AHEC

Authorityissues Build America Bonds

Loans bond proceeds

Formed via contract by Metro & SPC

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The Vision—A nationally renowned hospitality program affordably

serving a diverse student population. The program prepares tomorrow’s hospitality leaders within an

experiential learning for-profit hotel located in urban Denver, a living laboratory.

Collaboration—Metro State has teamed up with Denver-based Sage Hospitality Resources, one of the country’s leading hotel management and development companies, to build the hotel and hospitality learning center. Sage will serve as the hotel operator when completed

Other Collaborators

• Mortensen Development & Construction is the project’s developer and general contractor

• RNL Design is the architect

• The hotel will be branded with the SpringHill Suites® by Marriott flagThere are 255 SpringHill Suites® by Marriott locations in US and CanadaIt is Marriott’s highest performing and fast growing brand—it targets corporate-transient businessMarriott International has the industry’s strongest reservation system—it drives over 60% of Gross Room Nights for the SpringHill Suites® brandIt has a guest satisfaction score of 85.7%, leading all of Marriott’s other brands

• Red Robin will operate a quick-serve restaurant within the building

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Financing

• In October 2010, we issued $54.9 million of bonds to finance $45 million of construction costs, plus estimated capitalized interest, debt service and operating reserves, and bond issuance expenses

• There was a mix of tax-exempt revenue bonds ($4.5 million), Build America Bonds ($49.7 million), and taxable revenue bonds ($0.7 million)

• Principal will be repaid between 2013 and 2042

• Average interest rate is below 5%

• Bonds are secured by the hotel’s net revenues, fundraising and the backstop of the College (via a Guaranty Agreement)

Financing(continued)

• Debt attributed to the hotel and conference center is expected to be repaid from the operation’s net revenues

• The portion attributed to the hospitality learning center—approximately $12 million—will be repaid from MSCD Foundation fundraising efforts

• No taxpayer dollars are being used for this project!

• Early retirement of principal from gift revenue will reduce interest charges on this portion. Bonds with a call feature will provide the flexibility to extinguish the HLC share.

• The College and the Foundation entered into a separate memorandum of understanding. This MOU outlines roles and responsibilities pertaining to the fundraising campaign and includes a provision for reimbursement by the Foundation of any advances made under the Guarantee Agreement.

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Net Profits After Debt Payments

• After payments are made for bonds, related expenses, and reserve replenishments—including advances made by the College under the Guarantee Agreement—the net profits generated by HLC@Metro, Inc. will flow to the Foundation

• The Foundation may use these funds for scholarships, academic programs and other projects that benefit the College

• However, when the Foundation makes an allocation, they must spend at least 50% of the amount on scholarships for Metro students

June 2007

• Auraria Campus Master Plan allows for Public/Private Development

May2008

• Initial Pahl Architecture program plan

Spring2009

• Approvals Received [ Metro Board of Trustees, Metro Foundation, Auraria Board of Directors, CCHE, CDC, JBC]

July2009

• Request for Developer proposals

August2009

• Selection of Mortenson Development team

December2009

• Phase I Engagement Agreement with Developer Team

February2010

• Board approvals on relocation of site from Lot R to Tennis Courts

June2010

• New Denver Zoning Code allowing Hotel as a permitted use

Timeline

March 2010

• Request for Proposals for Hotel Franchise Opportunity

May2010

• Refine and confirm initial program plan

August2010

• Schematic Design Package Complete

December2010

• Design Development Package Complete

January2011

• Bid Package No. 1 Bid & Award

February2011

• Ground Breaking on site work (17 Months)

April2011

• Bid Package No. 2 Bid & Award

July/August2012

• Construction Complete, Move In and Open for Business

2007

2008

2009

2010

2011

2012

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Construction Challenges, Lessons and Outcomes

• Prior to 2007, Auraria did not allow for public/private development. The campus master plan added the ‘urban district’ which now allows for public/private partnerships.

• Original project location was in a parking lot. We discovered utilities (gas and water) which service the majority of lower downtown. Relocation of the utilities would have added millions to the project, and delayed the start and completion of the project. There were also vertical height limitations on this site.

• Therefore, the site was relocated to the Metro State tennis courts. The NCAA Division II tennis courts were demolished with the stipulation that the tennis courts would be reconstructed on an alternate site within a specific timeframe.

Construction Challenges, Lessons and Outcomes

(continued)

• Interestingly, the site did not include sufficient utilities to support a 150-room hotel, conference center, parking structure and academic component. Had to upgrade electrical and telecommunications. The project team also had to bore under a major downtown artery to connect water and storm utilities. Additionally, an underground detention and water quality vault was required to contain storm water. The vault was cast in place concrete measuring 14 feet wide, 166 feet long and 10 feet tall.

• Required a change in the City and County of Denver’s zoning codes to allow hotel use. Granted in June 2010.

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Construction Challenges, Lessons and Outcomes

(continued)

• The site had a variety of previous uses including; residential, industrial, manufacturing, junk yard, laundry facilities and athletic facilities (tennis courts). Site clearing for this project began early to facilitate discovery of environmental conditions—which were discovered. The predominant contaminate on site was asbestos, found in a variety of building materials. Removal required lined trucks, and special manifest handling to segregate the material at the local landfill. This excavation operation resulted in the import of 12,000 cubic yards of clean material to bring the project site back up to grade.

• The ultimate outcome—a profit-generating operation, created from partnerships formed with private organizations, that will provide tremendous educational benefit to Metro State students, a trained workforce for community businesses, and a source of revenue for the Foundation to support the College through scholarships and other program/project funding

Conference Center Windows Provide Stunning Views

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Views of Downtown Denver

Views of Downtown Denver (continued)

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Metro State’s Hotel & Hospitality Learning Center

Metro State’s Hotel & Hospitality Learning Center

Dr. Stephen Jordan, PresidentMetropolitan State College of Denver

smjordan@mscd.edu www.mscd.edu