April 17, 2009

W I L M O RI TE

1265 Scottsville RoadRochester, NY 14624585-464-9400www.wilmorite.com

Higher Education & Real Estate

Panel Participants

• Tom George – Wilmorite, Director of Development

• Kevin Wilmot – Wilmorite, Vice President

• Jeff Turner – Brailsford & Dunlavey, Senior Vice President

• Janine von Juergensonn – Barnes & Noble, Vice President

W I L M O RI T E

Higher E

ducation & R

eal Estate

Outline• Panel Introduction• RIT & Wilmorite Background• A True College Town

– History of the Town/Gown Relationship– Market Analysis– Findings & Recommendations

• Park Point at RIT– Development Program

• Land Acquisition– Campus Evolution– Wetland Mitigation– Approval Entities

• Creating a Vital, Vibrant Town Center– Programming– Retail– Barnes & Noble Academic Superstore

• Financing• Timeline Summary

• Questions & Contact

W I L M O RI T E

Higher E

ducation & R

eal Estate

4

About Wilmorite

W I L M O RI T E

Founded by James P. Wilmot in 1948 and headquartered in Rochester, NY

• 3rd Generation, family owned business

• Tom Wilmot Sr. became CEO in 1980

• Operating for 60 years as a real estate development, construction and property management firm with more than 250+ employees

• Projects include retail centers, residential communities, student housing, academic facilities, historical restorations, hotels, convention space and more

• Has developed, owned and operated in 10 states

• Over $4 Billion in commercial development completed

Higher E

ducation & R

eal Estate

5

University Experience

W I L M O RI T E

Wilmorite has been on campus in Upstate New York since the 1960’s

• Have enjoyed a 30+ year relationship with multiple Universities

• On-campus work includes student & faculty housing, athletic center, dining facilities, bookstores, theater, library, instructional labs and office

• First student housing project was in 1972. Since then have built more than 4,000 students beds. 1,200+ beds in approval stage

• Clients include:– University of Rochester– Nazareth College– Rochester Institute of Technology– Cazenovia College– Herkimer Community College– Tompkins Cortland Community College– Syracuse University

Higher E

ducation & R

eal Estate

6

Rochester Institute of Technology

W I L M O RI T E

1829• Colonel Nathaniel Rochester and other Rochester community leaders found

the Athenaeum, an association “for the purpose of cultivating and promoting literature, science, and the arts.”

2009 • 16,500 students• 9 colleges and institutes• 2,000 faculty and staff• 6,700 beds on-campus• 1,300 acre campus• 238 buildings (5.3 million sqft)• The world’s first and largest technological college for deaf and

hard-of-hearing• One of America’s “Best College Values.” (U.S. News and World Report) • Ranked by the Princeton Review as one of the 25 Most Connected Campuses

for computing resources

Higher E

ducation & R

eal Estate

7

RIT & Wilmorite

W I L M O RI T E

Wilmorite began its relationship with RIT in 1998 and since has deliveredover 1,000 student beds

• University Commons • 3 year - 3 phase implementation of apartment style housing

• RIT Greek Village• A strategic effort to house all Greek activities on campus• Buildings designed to grow with increase membership

• “Collegetown”• Develop a program that addresses the importance of the student experience

outside the classroom• Increase the on-campus quality-of-life factor • Increased student retention

Higher E

ducation & R

eal Estate

8

Collegetown Goals

W I L M O RI T E

• Create a mixed-use development while achieving financial viability

• Offer convenient and value oriented retail and service offerings

• Create a “non-institutionalized” on-campus development

• Meet RIT student housing needs

• Increase campus accessibility

• Expand linkages between RIT and the community – Town/Gown

Higher E

ducation & R

eal Estate

9

History of Town/Gown Relationships

W I L M O RI T E

Tumultuous Beginnings• Medieval town-gown riots in Cambridge and Oxford

Higher E

ducation & R

eal Estate

10

History of Town/Gown Relationships

W I L M O RI T E

“…Many groups have important roles to play in building healthier communities, but few institutions have more to contribute to the revitalization of urban communities than Americas’ colleges and universities – and few have a greater stake in the effort and its success.”

Henry Cisneros Former HUD Secretary

Higher E

ducation & R

eal Estate

11

Town/Gown Relationships Today

W I L M O RI T E

• Institutions are being asked to do more

• More master plans have less defined campus edges

• Off-campus university bookstores make for strong anchors

• College towns potentially incubate new business

• Retail remains challenging

• Mix of high-end national and local merchants

Higher E

ducation & R

eal Estate

12

2002 Market Study

W I L M O RI T E

Focus groups and intercept interviews including nearly 100 RIT students, faculty and staff

• A case study of four mixed-use developments that are adjacent to other Universities

• A review of the local housing market to define and characterize the private market offerings available for RIT students

• Electronic surveys including responses from over 2,500 RIT students, faculty and staff to assess shopping and entertainment preferences, service needs, housing preferences, monthly expenditures, and demographic profiles

• Retail and housing analyses to quantitatively assess the demand for expenditures and preferences in Collegetown

Higher E

ducation & R

eal Estate

13

2006 Market Study Update

W I L M O RI T E

Higher E

ducation & R

eal Estate

2006 RIT Housing Capacity

Residence Halls49%Apartments

44%

Greek Houses2%

RIT Inn5%

14

Summary of Findings

W I L M O RI T E

• Students attracted to RIT due to strong academic reputation, co-op program, and strong education in technical disciplines. Biggestdisappointment was campus “quality of life.”

• 96% of the student respondents and 92% of the faculty/staff respondents agreed “Collegetown will improve the Quality of Life at RIT.”

• Very limited “student friendly” off campus housing market near campus

• On-campus was 102% occupied in 2006

• Demand for 1,200 beds – mostly in 2 and 4 bedroom apartments

• Approximately 67,000 gsf of retail space

• Students interested in late night restaurant and bars. University interested in having the appropriate balance and mix of retail activities

Higher E

ducation & R

eal Estate

15

Park Point at RIT

W I L M O RI T E

A mixed-use University project that opened the campus edge and extended into the community.

• 938 beds• 100% leased at opening• 100-bed waitlist

• Market rate housing• Student, Graduate, Faculty, Young Professional

• All-Inclusive rates• Rent, Utilities, Furniture, Phone/Data/Cable, 24/7 On-site Security, Parking

• 60,000sqft of Retail including Barnes & Noble Academic Superstore• Total Development Square Footage: 500,000+• Total Development Cost: $77,000,000• Construction Timeline:16 months

• Construction began April 2007• Project opened August 2008

Higher E

ducation & R

eal Estate

19

Neighborhood Building Types

W I L M O RI T E

Higher E

ducation & R

eal Estate

21

Apartment Interiors

W I L M O RI T E

Higher E

ducation & R

eal Estate

22

Land Purchase

W I L M O RI T E

Higher E

ducation & R

eal Estate

• 60 acres was purchased from RIT by Wilmorite• Original plan was 25-40 land lease• Purchase helped wetland permits and university accounting

requirements (off balance sheet)• Sale contingent on the University becoming anchor tenant with the

campus bookstore

• RIT can recapture the property after 40 years• Enabling the developer to realize reasonable returns• School maintains ultimate control of the property if it so desires

• Buy Back Option• Pre-set price of $1.00• Right of first refusal clause if sold prior to 40 yrs

• Can only sell for remainder of the term• 90 day option after 40 years

RIT – Campus Evolution

W I L M O RI T E

1951

Higher E

ducation & R

eal Estate

RIT – Campus Evolution

W I L M O RI T E

1951

Higher E

ducation & R

eal Estate

Park Point - Regulatory Agencies

Federal• United State Army Corp of Engineers

State• NYS Department of Environmental Conservation• NYS Department of Transportation• NYS Historical Preservation

Local• Monroe County

• IDA• Pure Waters Agency• Health Agency

• Town of Henrietta• Planning Board• Town Board (Lead SEQR – 90 day approval process)

W I L M O RI T E

Throughout this development coordination with 10 regulatory agencies was required.

Higher E

ducation & R

eal Estate

26

Creating Vital, Vibrant Town Centers

W I L M O RI T E

Dynamic Mix of Retailers, Programs & Activities

• Simone Square Live Concert Series

• RIT Alumni Festival

• Tenant Programmed Events

• Park Point Fitness Center

• Barnes & Noble Academic Superstore (1st in New York State)

• M&T Bank

• TC Riley’s Irish Pub & Sports Bar

• Lovin’ Cup Music Bistro & Coffee House

• King David’s Mediterranean Restaurant

• Gallery Salon Too – Hair & Spa

• Abbott’s Frozen Custard

• Paradiso Pizza

• Wok with You Asian Cuisine

Higher E

ducation & R

eal Estate

27

Creating Vital, Vibrant Town Centers

W I L M O RI T E

Higher E

ducation & R

eal Estate

29

Barnes & Noble Academic Superstore

W I L M O RI T E

Higher E

ducation & R

eal Estate

• Hybrid of B&N retail bookstores within an academic environment• University gives B&N exclusive ( min. 15 year) contract to be campus bookstore

provider

• B&N provides guaranteed annual income and hires current staff; purchases current inventory; assumes bookstore operating costs; provides state of art technology and systems

• School provides capital funding and retains ownership and control of facility, often anchor in mixed-use retail development

• Town/Gown element, amenities include huge general book selection, cafes, special events, extended hours, seating + traditional college store merchandise such as textbooks and spirit merchandise

• Usually co-branded as : "B&N at... {name of school}

30

Barnes & Noble Academic Superstore

W I L M O RI T E

Higher E

ducation & R

eal Estate

• Other Superstore Examples:• Harvard• Yale• U Penn• Southern Methodist University• Georgia Tech• De Paul University• Johns Hopkins• College of William & Mary• U of Mississippi• Boston University• Bucknell University

• New projects pending:• Rutgers University• Virginia Commonwealth University• New Mexico State University

Retail Leasing• 95% leased

• Anchor Tenant – Barnes & Noble

• National vs. Regional• Most prospective national retailers had an existing store presence in regional shopping

centers less than two miles from RIT• Received great response from established local and regional operators• Based on market studies & local focus groups we targeted certain retail uses that

appealed to both students and the community

• Standard Lease• 10 year terms• Gross rents range with annual increases• Tenant responsible for build-outs

• Retail Maturity• Managing tenant commitments and defaults

W I L M O RI T E

Higher E

ducation & R

eal Estate

Financing• Construction Loan

• Executed a 2.5 yr construction loan, with 2 six month options• This gave us the ability to stabilize the project prior to obtaining long term

permanent financing

• Key Factors of Financing Terms• Demand• Enrollment• Location• Lack of quality student housing in the area – First-To-Market

• IDA PILOT Agreement• No sales tax on construction materials• Real property tax

• Capital Markets Positive Outlook• Even with today’s economic conditions, the quality student housing sector

remains strong with lenders

W I L M O RI T E

Higher E

ducation & R

eal Estate

Project History & Timeline1998 Rochester Institute of Technology and Wilmorite begin working on a plan for an on-campus

living community to add student beds and increase the colleges quality-of-life rating.

2002 RIT begins a national search and RPF process to select development partner for a mixed-use project on 120 acres of university land, dubbed Collegetown. Pre-development programming, market & feasibility studies, student focus groups, architectural drawings begin.

2004 Wilmorite is selected as “turn-key” developer. Initial contact with USACOE & NYSDEC regarding the project’s wetlands.

2005 Site plans and preliminary drawings complete and approved by RIT. Wetland disturbance permits submitted.

2006 Final designs completed. Application made to the Town of Henrietta Town Board for Use Permits (height and setback) and SEQR procedures (requesting Town be lead agency)

2006 Town Board granted Use Permits and prepared SEQR Negative Declaration – 61 DaysApplication to the Town of Henrietta Planning Board for subdivision and site plan approvals.Applications to all outside approval agencies (NYSDOT, Monroe County Health Dept., etc.) made at the same time.

2007 Wetland permits obtained from NYSDEC & USACOE (3 years) – Construction begins!

2008 Fall Semester Park Point Opens!

W I L M O RI T E

Higher E

ducation & R

eal Estate

35

Questions

W I L M O RI T E

For More Information Please Contact:

Tom GeorgeDirector of Development585-464-9400tgeorge@wilmorite.com

www.parkpointrit.comwww.wilmorite.com

Higher E

ducation & R

eal Estate

mailto:tgeorge@wilmorite.comhttp://www.parkpointrit.com/http://www.wilmorite.com/

Institutional Background• Not growing– 8,000 students (6,000

undergrad, 2,000 grad)• Designated “Hottest Small State School”

by Newsweek• Recent New York Times front page

coverage as a “well regarded public institution”

• Goal is to be a residential campus, integrating living and learning

Current Housing Situation• Affordable and proximate housing for

students, faculty and staff identified as a long term risk to institutional vision

• Current on campus student housing, 3,000 beds with many tripled serves, about half the undergraduate population

Campus Housing Today• Student housing not available for

transfer or graduate students• No “suite style” housing available for

students• Local community eager to address

problems caused by undesirable landlords with more campus housing

Local Housing Market• Affordable and proximate faculty and staff

housing key to long term college vision• New Paltz real estate prices (even today) price

out new faculty and staff of most nearby options– 90 miles from NYC– Small college town – Major visitor/second home destination

Why Use Foundation?• Willing partner, mission-based commitment to

meet campus needs• Enhance access to (non-Dormitory Authority)

private financing• Reduced overhead and increased flexibility• Ability to partner with private sector, enabled

larger project• Permitted by system rules and contract

Why this parcel and project?• Acquire land bank for campus• Increase campus footprint by 20+%• Begin to address housing shortage• Developer’s community ties, local experience• Largest undeveloped parcel contiguous to

campus • Ability to develop an integrated, pedestrian

oriented housing• More suitable than available campus sites

Transaction Structure• LLC wholly owned by the Foundation purchases approximately

42 acres• Leaseback all but 10 acres to Developer for 40 years. 10 acres

retained for development by Foundation • Need to balance Developer desire for flexibility with College

desire for housing suitable for students, faculty and staff1. Permitted use: Mix of apartment and town home style housing,

together with accessory commercial uses. Other uses consistent with Campus character that do not detract from primary intended use are permitted, subject to reasonable approval of Foundation.

2. Foundation retains ability to approve development on leased site. This approval right does not extend to certain development details, i.e., mix of housing and accessory uses and interior layouts etc. . . . However, approval right does cover building layout and other exterior site features. If Developer disputes reasonableness of any refusal to consent, dispute settled by arbitration.

3. Concept Plan attached to lease to show general intent of parties.4. College and Developer will work together to market first to College

students, faculty and staff.

Transaction Structure (continued)• Leasehold mortgage considerations

1. Developer right to grant leasehold mortgage to institutional lenders2. Lease must cover distribution of fire and condemnation proceeds3. Lease must contain mortgagee cure rights and other typical

mortgagee required provisions.• Foundation Early termination option

1. Applies to approximately 4 acres2. Effective at end of 20th year3. Foundation to pay FMV of improvements as agreed by parties or, if

no agreement, as determined by appraisal4. Foundation can rescind election after appraisal process completed.

• Project approvals coordination1. Parties will work cooperatively to prepare development plan and

obtain required approvals.2. Developer must obtain Foundation consent to assign Lease prior to

obtaining development approvals.3. Parties can hire their own consultants or hire joint consultants and

share fees.4. Each party can decide to bifurcate project at any time.

12448763.1

Transaction Structure Outline by

Kevin V. Recchia Partner

Nixon Peabody LLP Rochester, New York

• LLC wholly owned by the Foundation purchases approximately 42 acres

• Leaseback all but 10 acres to Developer for 40 years. 10 acres retained for development by

Foundation

• Need to balance Developer desire for flexibility with College desire for housing suitable for

students, faculty and staff

1. Permitted use: Mix of apartment and town home style housing, together with

accessory commercial uses. Other uses consistent with Campus character that do not

detract from primary intended use are permitted, subject to reasonable approval of

Foundation.

2. Foundation retains ability to approve development on leased site. This approval right

does not extend to certain development details, i.e., mix of housing and accessory

uses and interior layouts etc. . . . However, approval right does cover building layout

and other exterior site features. If Developer disputes reasonableness of any refusal

to consent, dispute settled by arbitration.

3. Concept Plan attached to lease to show general intent of parties.

4. College and Developer will work together to market first to College students, faculty

and staff.

Transaction Structure -Continued-

• Leasehold mortgage considerations

1. Developer right to grant leasehold mortgage to institutional lenders

2. Lease must cover distribution of fire and condemnation proceeds

3. Lease must contain mortgagee cure rights and other typical mortgagee required

provisions.

• Foundation Early termination option

1. Applies to approximately 4 acres

2. Effective at end of 20th year

3. Foundation to pay FMV of improvements as agreed by parties or, if no agreement, as

determined by appraisal

4. Foundation can rescind election after appraisal process completed.

• Project approvals coordination

1. Parties will work cooperatively to prepare development plan and obtain required

approvals.

2. Developer must obtain Foundation consent to assign Lease prior to obtaining

development approvals.

3. Parties can hire their own consultants or hire joint consultants and share fees.

4. Each party can decide to bifurcate project at any time.

SECTION VI PARK POINT CASE STUDY.PPTPanel ParticipantsOutline

SECTION VI NEW PALTZ CASE STUDY.PPTTransaction StructureTransaction Structure (continued)

SECTION VI HANDOUT RECCIA.pdf