Corvias selected for a $517M deal to develop and manage student housing for nine campuses across Georgia for the next 65 years
Atlanta, Ga. (November 12, 2014) – Corvias Group, announced today that Corvias Campus Living, the company's student housing division, has been chosen by the Board of Regents (BOR) of the University System of Georgia (USG) to develop, construct, manage and maintain student housing in the first phase of an unprecedented Public-Private Partnership (P3). Phase 1 will include 3,683 new beds and 6,195 existing beds totaling over 3 million square feet across nine of the USG's 31 campuses.
"Quality, safe, affordable housing for students is our priority," said Chancellor Hank Huckaby. "We expect our initiative will generate innovation, operating efficiencies and best practices in student housing to improve the quality of the on-campus housing experience for our students."
The partnership represents a unique approach in student housing because it is the first time a state system has initiated the privatization of student housing through a portfolio of campuses. Corvias has approached this as an opportunity to listen, understand and create solutions that are unattainable through traditional real estate or P3 structures.
"We applaud Georgia and the Board of Regents for taking such an innovative leadership position in solving today's student housing challenges," said Kurt Ehlers, Managing Director of Corvias Campus Living. "The partnership focuses on doing the right thing — providing affordable on-campus housing for USG students while also setting the stage for positive change in student housing. We look forward to working with the BOR to enliven the true meaning of a partnership."
The USG-Corvias partnership offers a proven model that protects the program's interests and partners in all aspects of financing, providing funds for upgrades, modernization efforts and the replacement or completion of USG-mandated projects.
Corvias' unique P3 model offers long-term financial, operational, construction and design components, creating significant benefits, including:
- Performance-based fees, which tie compensation to metrics, are awarded at the discretion of the BOR and individual campuses to ensure alignment of interests between Corvias and the USG.
- A reinvestment account that is projected to exceed $2 billion over the life of the partnership will ensure that all facilities are left in like-new condition at the end of the 65-year program. These guaranteed funds allow each building to go through minor renovations, major renovations and full replacements five times without requiring additional capital.
- $5.6 million of up-front funding for capital repairs and renovations to take place in the first year on existing housing. This allows all residence halls to improve.
- Local economic impact in the state of Georgia; Corvias has already hired seven Georgia-based architecture, engineering and construction firms, and will seek additional subcontractors.
Under the agreement, Corvias will construct 3,683 new beds across seven of the nine privatized campuses. Each development program will be tailored to the needs of each individual school, allowing each campus to attract, educate, retain and graduate a growing number of students. This includes design that supports long-term flexibility of use and student engagement with a focus on affordability without sacrificing quality.
Corvias will also be responsible for managing the operations of the new housing facilities, as well as the 6,195 existing beds for the duration of the 65-year partnership.
Corvias' experience with P3s goes back to the Military Housing Privatization Initiative (MHPI), which saw the U.S. military turn to the private sector for their on-post housing needs in the late 1990s. Under the MHPI, Corvias developed a trailblazing privatization model to improve the Army's substandard housing through long-term, sustainable partnerships. Using traditional methods, the Department of Defense would have needed 20 years and $16 billion to complete the necessary work. Corvias and the other private sector partners were able to clear the backlog 20 times faster.
Corvias is highly experienced at finding unique financing solutions for its partners, as evidenced by the more than $2.7 billion in partnership financing for the military. The company's national portfolio extends from Alaska to Florida with more than 26,145 units and 82,807 beds owned and operated across nine states on more than 16,577 acres. Fort Bragg in North Carolina, one of the 13 military installations where Corvias manages housing, covers 251 square miles alone.
Corvias' significant experience in successfully executing large-scale housing programs is exemplified by its existing partnerships that have resulted in over $170 million per year of construction projects and the addition of 4,500 beds annually, all executed within the same P3 framework proposed for USG. The company's student housing division, Corvias Campus Living, was established in 2012 and is based in Cary, North Carolina.
About Corvias Group
Corvias Group is a privately-owned company that strives to tackle tough, large-scale challenges through trusted partnerships that put client interests first; focus more on performance than profit; and, produce sustainable long-term solutions. Three business divisions deliver our mission of Living Made Better — Corvias Military Living, Corvias Campus Living and Corvias Solutions. We work on behalf of the U.S. military, colleges and universities, and public sector agencies to develop tailored solutions that remedy some of America's most challenging deficiencies in infrastructure and facilities caused by chronic underinvestment. All Corvias Group companies are governed by three core principles: Be the best provider of service; be the best place to work; and, generously give back to the communities where we live and serve. Corvias (kor-vee-us) Group is headquartered in East Greenwich, R.I. www.corvias.com