May 10, 2005
ITEM 127-1002-S0505 A Request From the Chairman of the Board of Regents That the Board Approve or Disapprove Further Planning for the Construction of a University Linked Residential Community; The University Of Montana-Missoula
THAT: The Board of Regents of Higher Education approves or disapproves The University of Montana – Missoula’s request to proceed with the planning process for a proposed University Linked Residential Community of approximately 590 residential units to be built at the University’s South Campus location.
EXPLANATION: The University of Montana – Missoula, having entered into a preliminary, non-binding, agreement with UM Village Development LLC to assess the potential for the development of a University Linked Residential Community (ULRC), has reached the stage in the project where the University requests permission from the Board of Regents to proceed from the current project feasibility analysis to the full planning stage. The following assumptions as to the planning process have been made:
· Based on the complexity of the project and the inherent financial risk it presents, the University will not contribute any University funds for project construction. Rather, the principal UM Village Development LLC developers, Walt Brett and Ed Rogerson, will assume all financial risk and all costs associated with planning, marketing, construction and financing of the project.
· The University will lease for sixty years approximately 50 acres of land on the South campus to UM Village Development LLC, where the University Linked Residential Community will be built. Given the unique nature of the project, the lease is intended to be granted by the University on a non-bid, sole source basis.
· In exchange for the leasing of the land to UM Village Development LLC the University will receive an equal share of the net revenues of the project during the term of the lease.
· Through covenants and restrictions in the lease document, the University will retain architectural design approval for the project during the development and construction phase; and will have equal representation with the developer on the UM Village Development LLC board of directors.
· It is anticipated that state and local property taxes will be paid on the community residences and related infrastructure improvements related to the residences on University land. It is further anticipated that the University land itself will retain tax exempt status to the extent permissible by law.
· The University and the developers anticipate bringing a final proposal, including projected revenue forecasts and sharing formulas, along with proposed project development and operating agreements, to the Board of Regents for final approval at the September 2005 meeting. The University and the developers will endeavor to make preliminary versions of these materials to the Board of Regents in July 2005.