Some land-rich Canadian universities are looking to residential development to help solve their funding difficulties. One Ontario university has set up a retirement community adjacent to its campus.
Across from the school's 500-acre arboretum, the University of Guelph has already leased 150 bungalows in the 44.5-hectare Village by the Arboretum, which they built with the help of a local developer.
Guelph is facing a Can$20 million (Pounds 8.5 million) budget shortfall for the 1996/97 year. This is not the first real-estate venture for the school. Guelph also runs a golf club, research park, a gravel pit and another residential development. The project is entering its second phase, which involves the construction of 101 more houses. The university is, in effect, the landlord for the community of mainly retirees, many fleeing the hustle and bustle of Toronto, an hour's drive away.
Although it is probably the first university that can scare up a shuffleboard game, Guelph is not alone in its visions of lucrative land development. Simon Fraser University on Canada's west coast recently completed a deal with the city of Burnaby that will not only help offset government cutbacks but will create a nearby community from which the current "commuter campus" can draw.
Their deal with Burnaby, an expanding city just outside of Vancouver, mainly consisted of Simon Fraser giving the city land that will be used for one of the world's largest urban parks with the university, in turn, receiving 29 lots of land that will be part of a bigger subdivision development. With the ink on the deal still drying, Simon Fraser is still deciding how it will use the land.
Like most universities that are taking courses in real estate, Simon Fraser says it will probably set up a business to operate its upcoming ventures, separate from the university and free from its inherent bureaucracy. "Universities are very consultative organisations," said Rick Johnson, director of facilities management at Simon Fraser. He says his university will probably establish a wholly-owned subsidiary corporation.
Both the University of British Columbia and York University have these types of offices, not only free to make quick decisions but also possessing different taxation rules and charitable status. For British Columbia, the project will involve 28 acres of development and will eventually house 950 families.
Mark Betteridge, the university's real-estate corporation president, says the Can$80 million the university is earning in the sale of their land leases has been a good deal. "It's a major money-maker."
The school decided to go for land development, on one project with a local developer and on its own for another. For this project, the objective was to make money and create a community next to the school.
With the University of Toronto also joining the game, inviting proposals from developers who can turn the land, where their football stadium stands, into housing and commercial development, universities may have found one way to keep the wolves from the door.