How a Regent’s firm was chosen to build student housing at WSU

The business that built a Wichita State University student apartment complex was initially one of the university’s more expensive options for building a dorm hall two years ago.

The firm, MWCB, LLC, was awarded a dorm hall project in June 2015 after it submitted a cheaper proposal. But that project was abruptly shelved the next day.

The following spring, MWCB asked to build a private apartment complex in the same location where the dorm would have been. WSU accepted.

David Murfin, a co-owner of the MWCB firm, signed the letter of intent to WSU requesting to build the private student housing. Murfin, who also sits on the Kansas Board of Regents, abstained from the state vote that moved the project forward two months later.

MWCB, which is comprised of Murfin, Nestor Weigand Jr., Ivan Crossland Jr., and Steven Barrett, has been involved in several projects on WSU’s Innovation Campus, a 120-acre development on the former Braeburn Golf Course.

The private housing apartment complex, called The Flats, is now home to hundreds of WSU students. Most of those students were initially going to live in Fairmount Towers residence hall before the university announced its closure on July 14.

On July 26, The Eagle asked for requests and bids for a residence hall and private housing on the Innovation Campus. WSU did not provide all the documents until Sept. 20, eight weeks after they were first requested under the Kansas Open Records Act.

Residence hall request

In early 2015, WSU announced plans to consider another residence hall on its campus to join Shocker Hall, which opened in August 2014.

The university issued a request for qualifications to build a new residence hall on the Innovation Campus. Four firms submitted proposals to the university: Dondlinger Construction, America First Real Estate Group, Clayco Realty Group and MWCB.

America First’s proposal had a development cost of $39.6 million. Clayco proposed a $44.5 million project. The estimated construction cost for MWCB’s proposal was $47.7 million. Dondlinger’s offer didn’t have a total cost listed in its first proposal.

That May, WSU’s Assistant Director of Purchasing Kim Sowell asked vendors to submit new cost proposals.

“Due to considerable differences in the presentations, we are requesting additional information before making a final selection,” Sowell wrote.

MWCB’s new total cost was $40.2 million. Dondlinger proposed a total cost of $49.4 million. Clayco’s new proposal was $53.4 million. There was no new America First proposal in the documents provided to The Eagle.

Sowell emailed prospective vendors the next month that a selection committee concluded the MWCB proposal had “best meets our expectations.”

“We still have significant concerns related to the project costs that we hope can be resolved,” according to a June 15, 2015 e-mail to Barrett, Crossland and Murfin. “We look forward to working with you as we attempt to produce a viable project.”

The next day, Murfin was appointed by Gov. Sam Brownback to the Kansas Board of Regents, which is responsible for governing WSU and other state universities and colleges.

Also on that day, June 16, 2015, The Eagle reported that WSU president John Bardo put residence hall plans on hold over concerns about costs.

WSU’s Vice President for Public Affairs Lou Heldman told The Eagle the project being put on hold was not because of or related to Murfin’s appointment.

“The first wave of proposals we received from developers would have required the university to take on long-term debt,” Heldman wrote in an e-mail. “That seemed like a bad plan in this era of declining state support and understandable student unhappiness with rising tuition and fees.”

“We decided to reserve the university’s future bonding power for use in buildings directly tied to WSU’s educational mission,” he added.

Private housing proposal

After the residence hall project was postponed, a market study found there was a student housing demand for about 400 beds.

Based on those findings, MWCB presented a draft letter of intent on student apartments, noting that WSU encourages “developers interested in collaboration in support of the WSU Innovation Campus to submit proposals or expressions of interest.”

“Given our team’s selection and the apparent need for on-campus housing, we request that the (Wichita State Innovation Alliance) allow our group to proceed with a student apartment project on the WSU campus at the same site discussed for the student-housing project,” according to the April 15, 2016 letter.

“The MWCB team would own and operate these apartments without requiring any financial commitment or bonding capacity from WSU,” the letter reads. “This student apartment project will be a unique opportunity for WSU to gain the housing needed without the long term financial commitment that the previously proposed 600-bed student housing project would require.”

MWCB said they wanted to begin construction later in 2016.

“Our team offers this proposal to address the needs of the students and to assist the university,” the letter concludes. “As members of this community, we are especially invested in helping Wichita State University thrive as a successful economic driver in the region.”

The letter was signed by the four MWCB co-owners, including Murfin.

WSU accepted the proposal because MWCB was a reliable developer for the Airbus building that had a good reputation “in completing numerous development projects in Kansas,” Heldman said.

“No other proposals were received for building this many units or more of student housing without the university taking on long-term debt,” Heldman said. “We believed they would deliver on what they promised.”

Two months later, the Kansas Board of Regents approved WSU’s request to lease property to the Innovation Alliance, who would sublease it for construction. Murfin abstained from the June 15, 2016, vote and discussion.

WSU announced the partnership last August. The Flats began leasing this February for the fall 2017 semester.

‘Where we ended up’

The Flats only had 47 people signed up to live there before the Fairmount Towers announcement in July, which moved more than 300 students to the new apartments.

Wichita State decided to lease space at The Flats without a formal go-ahead from the Board of Regents, which is required under state policy. Murfin told The Eagle at a Regents meeting in Topeka that WSU approached his development team with the idea of leasing The Flats.

“We agreed to change the character of the building at their request,” Murfin said.

The university is set to pay a base rent of about $1 million from August 1 to May 31, 2018, under the agreement that was approved by KBOR.

Heldman said the new apartments have already boosted the quality and vibrancy of student life on campus and have become “an additional important recruiting tool.” He said they will become more important as the Innovation Campus adds more Braeburn Square development and a YMCA and wellness center.

“Our learning process, like that of our students, benefits from experience,” Heldman said. “It took a couple of years for the elements of the right solution to come together.”

“We feel good about where we ended up.”

This story was originally published October 10, 2017 at 9:43 AM with the headline "How a Regent’s firm was chosen to build student housing at WSU."