California State University: Innovation and Delivering Returns for Higher Education
Objective
Objective
To prove economic and construction feasibility for revitalizing the student housing and effectively manage implementation on the Fresno campus.
Situation
In 1994, the California State University system changed a policy that made each campus responsible for the economic viability of its student housing. At the Fresno campus, old dormitory-styled buildings weren't competing with private, off-campus apartments. In fact, occupancy was at 65 percent and declining. The Executive Director of the school's Foundation wanted to privatize student housing and use a separate, not-for-profit affiliate to operate the student housing like a business. He contracted with PMA to analyze the short- and long-term feasibility of this approach within the California State University System and, when proven feasible, implement the project management expertise needed to deliver outcomes within the designated schedule and budget.
PMA’s Contribution
PMA did an initial feasibility study for this new concept in 30 days, which included hiring an architect, conducting an existing conditions study, developing design studies for renovation of the existing housing stock and developing detailed financial projections. The study presented a viable solution for converting these traditional, double-loaded corridor dormitories into apartments. To ensure comprehensive due diligence for the California State University System, PMA then undertook an expanded feasibility study and explored four alternative scenarios for dealing with the housing crisis – from utilizing a traditional public procurement approach to complete privatization and outsourcing. This gave State officials the needed information to make a responsible decision. Once the new business structure was established and financed, PMA managed a tight and complex rolling renovation schedule that included asbestos abatement during a Thanksgiving holiday break and managed renovations building-by-building while the housing was still in use, in order to preserve anticipated revenues.
Results
PMA's understanding of the economic, operational and marketing challenges associated with student housing helped campus executives identify, plan and execute an innovative business model with realistic design and construction parameters. The renovation and unveiling of the first building was so successful that a 90 percent occupancy rate was achieved upon completion (8 months from start of construction) and the appeal of the student housing helped increase campus enrollment overall. The program's success also resulted in adoption at other campuses in the California State University system.