A housing study conducted for Wichita State University recommends phasing out Fairmount Towers and building a new residence hall with about 400 beds.
More than 1,500 students were surveyed by the firm Brailsford & Dunlavey about housing preferences, costs and amenities.
The study recommends a 160,500-square-foot residence hall with a combination of two- and four-bedroom apartments, which could cost between $32.4 and $36.8 million.
For most students, cost was the driving factor when choosing a place to live, according to the report.
Lou Heldman, WSU’s vice president for strategic communications, said there’s no time frame for when the university might decide to build another residence hall.
The decision rests on several factors, he said, including the environment for selling bonds and whether WSU’s enrollment increases next fall.
In June, Wichita State’s president, worried about costs, put on hold plans to build a second residence hall on campus.
President John Bardo had hoped to start construction on a 400- to 600-bed hall in November and open it before the fall semester of 2017. Bardo has said previously that a new residence hall is integral to building the new Innovation Campus at WSU.
The new Innovation Campus residence hall would have come on the heels of the new Shocker Hall, a 784-bed dormitory that was built in a little over a year at a cost of $60 million. Shocker Hall opened in August 2014.
Two financing options
One financing option to build a new residence hall is a public-private partnership, where a 501(c)3 foundation – potentially the university’s Innovation Alliance or a newly created foundation – owns the property and the building is financed with tax-exempt bonds. The nonprofit would then lease the site to WSU, which would help fill the beds. The operating costs and debt service would then be covered by the rent generated. Private entities would help develop the site.
A public-private partnership would cost about $36.8 million – $4 million more than a residence hall funded by the university using traditional bonds, the study said.
That greater cost would translate into higher rents for students – 16 percent more than a university-funded building.
A public-private partnership would cost about $36.8 million – $4 million more than a residence hall funded by the university. That greater cost would translate into higher rents for students.
While the students would pay more in rent, the university would have greater excess cash flow with a private-public partnership.
For example, a public-private partnership would generate $983,000 for the university the first year the residence hall was open, increasing to $1.26 million by its 10th year.
A university-funded hall, on the other hand, would generate $12,000 in excess cash in the first year, growing to $827,000 by its 10th year.
In a public-private partnership, it could cost anywhere from $7,860 for a shared bedroom in a four-bedroom apartment to $9,355 for a private bedroom in a two-bedroom apartment.
That’s $873 to $1,039 a month for the academic year.
It’s less in a university-funded hall: $6,715 for a shared bedroom in a four-bedroom apartment and up to about $8,060 for a private bedroom in a two-bedroom apartment, or about $746 to $895 a month.
Those prices don’t include meal plans.
In a previous survey, students were asked if they would pay $750 to $900 a month per student — not including parking and meals — to live in the new hall. WSU surveyed all students under the age of 30 late last year. The Eagle acquired the survey through a Kansas Open Records Act request.
That student survey, which cited concerns about costs, spurred the university to do more research, Heldman said in a previous interview.
The survey, completed in December 2014, drew negative comments from students. Some pointed out that they could buy a house and pay less on a mortgage than what they would pay in rent at the proposed dorm.
About 32 percent of students surveyed said they thought $750 a month was “somewhat reasonable” or “very reasonable.”
▪ “How rich do you think students are?” one student wrote in the survey. “Why would they pay that amount to live on an apartment when we can live 1 block from campus and pay one third of that?”
▪ “In the surrounding areas, housing is extremely cheap; my house I own is 1700 square feet with bills amounting to 900$ per month (utilities included),” another student wrote.
▪ “If four people are splitting the apartment rent at $750 dollars each … then the apartment is $3,000 a month,” another wrote. “Doesn’t that seem a bit excessive?”
The proposed cost to live in Shocker Hall at Wichita State next fall is $10,694 a school year per student, including a 15-meals-a-week plan, according to WSU’s most recent proposal to the Board of Regents.
The cost to live in the 1960s-built Fairmount Towers, also with a 15-meal plan, is an estimated $10,154 a school year for a private room and $8,844 for a shared room.
For shared rooms, Fairmount has seen a 36 percent increase in cost since 2012, mostly to help offset the costs for students living in the newer Shocker Hall.
Only about 8 percent of WSU’s students live on campus.
Currently, Fairmount Towers is 62 percent full with 445 beds, said Scott Jensen, director of housing and residence life. Shocker Hall has an occupancy rate of 93 percent with 778 beds.
Fairmount Towers also has about $4.7 million in deferred maintenance, Jensen said.
“Does it make sense for us to continue to have Fairmount open? It’s old and more expensive to maintain. That’s one reason to build new,” Jensen said.
And there is still $4.2 million in outstanding bonded indebtedness for the 52-year-old Fairmount Towers, which includes debt rolled in from the former Wheatshocker Apartments and Brennan Residence Hall, according to Troy Bruun, associate vice president for administration and financial reporting. Wheatshocker was torn down to make room for Innovation Campus buildings, and Brennan is being used as office space.
At its current rate, the debt is scheduled to be paid off by June 2021, Bruun said.