University of Michigan seeks developer for hotel, conference center through P3

December 8, 2023

The University of Michigan is starting the process of selecting a developer to finance and build a 150-room hotel and conference center on campus.

The university and its partner, commercial real estate and property investment firm JLL, opened a request for qualifications from potential developers to build the center on the university’s North Campus in Ann Arbor.

Through the public-private partnership (P3), the developer would be responsible for funding and constructing the project as well as maintaining and operating the completed center through a ground lease with the university. The developer would also take on the revenue risk for the project, according to JLL.

The scope of the proposed project includes an upscale or boutique hotel adjacent to a multifunctional conference center that would have capacity for up to 1,000 attendees. Plans also call for a full-service restaurant and parking in either a garage or incorporated into the first few floors of the building.

Statements of qualifications are due Jan. 19, and U-M plans to issue a short-list of qualified developers in February to issue requests for proposals (RFPs).

Building partnerships

The new hotel and conference center is not the first time U-M has sought a partnership with a private firm this year for a new development. In September, the university’s board of regents approved the budget for a $631 million student housing project that will have 2,300 beds and a 900-seat dining hall. While the agreement is not a true P3 since the university is funding the project, American Campus Communities is managing and developing the project.

However, more universities are seeking true P3s by having the developer not only construct but finance the project. As many universities began struggling with limited resources, they looked for other opportunities to deliver projects. Although P3s have been around since the 1960s, the model gained traction with higher education institutions in the 1990s when tax-exempt financing became an option for development firms, according to a P3 report from Brailsford & Dunlavey.

Other recent examples include JLL assisting Michigan State University with its first P3 in 2019 with Health Innovation Partners – a real estate development joint venture – to expand the Grand Rapids Research Center. The developer also secured a ground lease for the new building.

The University of Tennessee, Knoxville, announced in May it will build three multiuse student housing developments through a P3 agreement to add more than 2,500 beds, totaling nearly $310 million

The developer, RISE Real Estate, will develop, finance and construct the three buildings. RISE and UT will partner to maintain the buildings through a long-term agreement.

“The public-private partnership with RISE is an important step to help meet the student housing needs of our growing campus,” said Vice Chancellor for Student Life Frank Cuevas said in a news release.

In August, the University of Vermont signed a letter of intent with AAM 15 Management LLC for new undergraduate housing. The university will only fund one quarter of the $100 million cost.

“Our ability to move forward with this project in a financially responsible way will yield significant benefits for UVM students and the university’s neighbors,” UVM board Chairman Ron Lumbra said in a news release.

In late November, Texas State University issued an RFP to seek a developer to design, finance and build a 150- to 250-room full-service hotel in San Marcos. The project would also include at least one food and beverage restaurant and a community gathering space. Proposals are due Jan. 23, and Texas State will select a developer in May.

Strategic Partnerships, Inc. provides business development assistance and hands-on services for all types of contracting opportunities. Take a quick look at what our consultants do for clients throughout the U.S. Contact

Photo Credit: Scott C. Soderberg, provided by Michigan Photography, University of Michigan

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