Cardinal Court: Negotiating a new deal
Two bound volumes that stand a foot tall when stacked sit in Dan Layzell’s office. The pages consist of legal documents required to complete financing for the Cardinal Court project.
Layzell, who is ISU’s vice president for Finance and Planning; Comptroller Greg Alt ’81, M.B.A. ’94; and General Counsel Lisa Huson spent months finalizing the details between all the parties and attorneys.
Arriving on campus in 2009, Layzell was quickly included in discussions about South Campus residence halls and Cardinal Court. One possibility explored was a public-private venture allowing a company to build on ISU’s land. The Board of Trustees approved the idea in 2010.
“The board by law has the ability to lease ground we own for development,” Layzell said. A legislative resolution sponsored by Rep. Dan Brady and then Sen. Dan Rutherford ’78 was required.
Collegiate Housing Foundation (CHF) was chosen to construct the apartments in partnership with American Campus Communities. ISU entered a 40-year ground lease agreement with CHF. When the lease expires, the University assumes ownership. There is an opportunity to buy the complex prior to the end of the lease period, which is the University’s intent.
ISU maintains managerial control throughout the leasing period. The detail is one of many negotiated by Layzell and his staff, who orchestrated the necessary bond sales.
“Timing is crucial to make sure you can pay back the bonds while accounting for rent levels, occupancy, and various managerial costs,” Layzell said. After studying area apartments, rent was set between $575 and $800 a month, with most beds at $625. Cardinal Court apartments are rented for a full calendar year.
Other variables were harder to gauge. The time leading up to the bond sale saw interest rates rising, which was just one factor complicating the business side of the project.
“We were very hands-on, and we needed to be to get the best product for our students and the best financial terms,” said Layzell, whose work involved discussions with the Town of Normal leadership team and coordination with campus facility planners.
The project quickly became the most complicated venture Layzell has negotiated in his career, and also the most exciting. “It was fun,” he said, “and we all learned something new.”