By: Karen Villasenor
A team of Nixon Peabody attorneys served as bond counsel in a student housing development financing transaction for Keck Graduate Institute (KGI). The transaction was completed in March 2017, and the 419-bed student, faculty and staff housing facility is expected to open in fall 2018.
“Student housing financings are challenging,” said Danny Kim, Nixon Peabody public finance partner. “The source of revenue to pay bonds is dependent on the housing facility’s success, and investors are cautious in taking on such risk.”
The California Public Finance Authority (CalPFA) provided $53.2 million of tax-exempt revenue bonds to NCCD-Claremont Properties, LLC to finance the housing development on the KGI campus, providing the necessary funds to acquire, construct, furnish and equip the facility. The 225,000-square-foot housing facility, located at the southwest corner of Bucknell Avenue and Wharton Drive/Santa Fe Street, will include 10,000 square feet of classroom space, an outdoor plaza, student lounges, a swimming pool, fitness center and barbeque area. Environmentally friendly features will range from LEED certification to lower water consumption and self-contained parking.
“The high-density KGI housing project took high precedence in the City of Claremont, which made the two-year entitlement process a challenge, but we had a strong team that was able to overcome the obstacles,” said Robert Kim, Executive Managing Director of Hanover Pacific, LLC, the project’s developer. “Nixon Peabody did an excellent job during the process.”
The development will be the first-ever on-campus housing opportunity for KGI students. KGI is a member of The Claremont Colleges, which consists of five undergraduate liberal arts colleges and two graduate institutions. Claremont Graduate University is the only member of The Claremont Colleges that provides housing for primarily graduate students. The KGI housing facility is designed to serve primarily graduate students, but eligible residents also will include undergraduate students, regular full-time faculty and other eligible individuals pre-approved by a member college of The Claremont Colleges.
“Although challenging, the work that goes into student housing financings is worthwhile and beneficial to the community. Adequate housing is an essential component in any university’s success,” added Danny Kim. “KGI’s student housing development is going to help accommodate the university’s growing enrollment and improve the City of Claremont’s economy.”
Nixon Peabody’s Public Finance practice has a national reputation for innovative work in financing a wide range of municipal and infrastructure projects, from mass transit and hospitals to baseball stadiums, student loans, public power and housing. The firm is one of the top bond firms in the nation.