EMU’s Welcome Home 2025 Plan is an equity initiative. Its goal is to ensure that EMU student housing residents -- nearly 40% of whom are students of color -- have access to quality and affordable housing.
EMU’s on-campus student housing facilities (which consist of more than 4,000 beds throughout 18 housing communities) are, unfortunately, outdated: most facilities were built more than 50 years ago, have not been updated, and have incurred hundreds of millions of dollars of deferred maintenance. In the most recent comprehensive assessment of EMU’s facilities, completed in 2016, all but one of EMU’s housing facilities were rated as “poor.”
Over the years, the University has focused its limited capital budget on improvements to academic facilities (e.g., Sill Hall renovation), core infrastructure (e.g., the new Energy Center), and student life assets (e.g., Rec/IM renovation). It is now time to invest in student housing facilities to ensure that EMU students have quality and affordable facilities in which to live, study, and socialize.
Other universities are investing in student housing facilities (including WMU, WSU, OU, NMU, and MSU) because they recognize the importance of offering students a high-quality on-campus living experience.
EMU determined that it is not in the best interest of students, faculty, or staff for the University to self-fund the $200+ million Welcome Home 2025 initiative because, as outlined in more detail below, the University borrowing to make a $200+ million capital investment would require EMU to issue significant new debt, use its cash reserves, or a combination of both -- and, as outlined below, any of these options would require funding cuts to other University operations.
Debt: If EMU borrowed $200+ million to finance the improvements to student housing facilities, EMU would be required to pay over $10 million per year to service the debt -- thus requiring massive cuts to the University’s operating budget to cover that expense. Budget cuts of this scale would negatively impact the classroom experience, financial aid, student services, facilities, and other areas of the University. Taking on this much new debt would also cause a negative impact on the University’s financial position.
Cash: The University does not have unrestricted cash reserves to fund an investment of this scope. Moreover, diverting operating funds (which are different than reserves) to pay for student housing improvements would require massive cuts to the University’s operating budget, thereby negatively impacting the classroom experience, financial aid, student services, facilities, and other areas of the University.
In return for coordinating the financing and overseeing all of the construction work, Gilbane and their development team will receive professional service fees for the $200+ million investment from 2022-2025. Gilbane will also receive a property management fee annually to provide maintenance, custodial, and other related services that will be subject to key performance indicators developed by EMU and Gilbane.
Affordability is one of the primary goals of this partnership. Initial rental rates were developed by the University and accounted for existing rates, and all future rates will be jointly set by the University and Gilbane.
The University will not have any requirements to guarantee occupancy in student housing. In the event occupancy falls below expectations, EMU’s partner will be responsible for any operating deficits.
The planning process that led to the Welcome Home 2025 Plan began in September 2018.
As a next step, the University will negotiate comprehensive agreements with Gilbane Development Company.
The University has begun engaging the campus community related to specific improvements to student housing facilities, including new construction, renovation, and demolition.
We expect that construction will begin in the summer of 2022 and that all construction will be completed by fall 2025.
EMU will continue to hire, train, employ, and supervise all staff whose mission is focused on residence life operations, including resident advisors (RAs), Complex Directors, Graduate Student Hall Directors, and front desk staff.
Gilbane will hire, train, employ, and supervise all maintenance and custodial staff working in student housing. All custodial and maintenance staff who are currently employed by EMU and work in EMU student housing will be offered jobs with Gilbane or be permitted to continue working in their current maintenance/custodial roles at EMU.