Western Kentucky University has inked a 50-year public-private partnership with Gilbane Development Company for what the school calls a "total revitalization" of its housing portfolio to attract more students.
The first phase, including the demolition of existing buildings and construction of a 1,000-bed dorm and dining hall, will be financed with $350 million of tax-exempt and taxable bonds. The Kentucky Bond Development Corporation, a conduit issuer created by the Kentucky League of Cities, will issue the debt.
The university was forced to close three relatively new residence halls in the last few years due to design and construction flaws, while the college's overall housing stock is aging, WKU president Timothy Caboni told state lawmakers on the Capital Projects and Bond Oversight Committee on Monday
"It became clear our residence halls were a constraint and not an asset for our university," Caboni said. "The scale and the complexity of what we're attempting to do required a new partnership with a national firm," he said, calling the P3 a "fundamental change in our approach."
The project easily won the committee's approval. The financing is on track for a May close, Caboni said.
As revenue-producing assets, student housing has become a solid niche in the P3 sector. Public-private partnerships are a way for colleges and universities, which are
WKU, located in Bowling Green, Ky., has roughly 16,000 students. It was the only Kentucky school that saw enrollment decline in the fall of 2024,
"You're talking about wanting to increase your student enrollment and attract students, this will do it more than anything else," state Sen. Reginald Thomas told WKU officials at the committee hearing. "Even your athletic program won't be able to match the attention you'll get by students wanting to come and have a nice place to live."
The deal calls for WKU to enter into a 50-year ground lease with the Collegiate Housing Foundation, an Alabama-based nonprofit, which will serve as owner and borrower. The revenue bonds will be backed by student housing fees, with surplus revenues going to WKU after repair and maintenance costs, according to the school.
Brailsford and Dunlavey will serve as project advisor.
The deal is structured with a 50-year land lease and 40-year bonds. The properties revert to the university once the debt is paid and the school has the ability to accelerate payments.
"Elevate WKU represents the kind of long‑term, mission‑aligned public-private partnership we are proud to partner on," said Geoff Eisenacher, Vice President of Development, Gilbane Development, said in a statement.
The WKU Board of Regents approved the agreement on April 24.
