Howard University has entered a $144 million partnership with Rhode Island-based real estate group Corvias in a deal that will pay for the renovations of two of the Northwest D.C. university’s largest residence halls.
Corvias raised funds from investors that will go toward the renovation of Howard’s Plaza Towers, as well as the ongoing maintenance of Drew and Cook residence halls. The funding will also cover some of Howard’s debt and transaction costs and create a reserve for future capital expenses, officials said.
The west tower, which is closed, will reopened in fall 2017 with 825 renovated beds. The renovated east tower, with 928 beds, will reopen in fall 2018. The spaces will include “live, learn and gather spaces,” Howard officials said.
“We really intend to create an academic environment that matches the ambitions of our students,” said Howard University President Dr. Wayne Frederick during the announcement on Tuesday. “These are the types of things that will bring our campus into this century and to make sure we have not just a modern campus, but on an ongoing basis, we have the kind of maintenance that needs to take place to make the facility a world-class facility.”
A wholly-owned and title-holding company of Howard University will continue to own the buildings and the land, officials said. Revenues from the residence halls will be used to pay investors, as well as a performance-based management fee to Corvias. After costs for operations, debt, management and reserves are collected, excess cash flow will be returned to Howard.
Over the 40-year life of the partnership, university officials estimate Howard will receive $528 million in financial return from the project, half which will be dedicated to a building reserve fund.