Arkansas State University (ASU) has announced the construction of two apartment-style residence and a hotel complex on campus through public-private partnership PPP models.

Zimmer Development Company, a subsidiary of Wilmington Consulting Group, will build and maintain the two housing facilities under a 35-year ground lease agreement. Both buildings will accommodate a total of 515 students. The complex will include a 350-bed undergraduate facility on the east side of campus and a 165-bed complex primarily for graduate students on the west side area.

During the initial years, Zimmer Development Company has agreed to pay the university US$305,000 annually from the rental payments of the two buildings. After these years, payments are fixed to index escalators.

The university will manage and market the dorms and assume ownership of them after the lease term agreement.

Additionally, ASU has also issued a 50-year ground lease for the SPV Jonesboro Hotel Partners, owned by O’Reilly Hospitality Management. The SPV will build, operate and maintain a new hotel with 205 beds, a convention center which will cover around 40,000-square-foot  and a restaurant, all of them on campus. 

Construction of the new student housing is expected to be completed by the fall of 2017, while the hotel, convention center and restaurant complex is scheduled to be finished in 2018.

ASU System President Chuck Welch, said:

“We believe this could be transformative for our campus in a variety of ways, including a hospitality management program, a student recruitment and visibility that set us apart from our peers.”