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October 10, 1998
NOVEL GIFT TO UMBC WOULD PROVIDE NEW RESIDENCE HALL BY NEXT FALL
UPDATE: At the time of this release, the anticipated value of the Erickson Foundation's gift was $1.25 million, as stated below. As of the October 1, 1999 ribbon cutting for Erickson Hall, the actual value of their donated construction management and development fees has been calculated to be worth $2.2 million, which is the single largest gift to UMBC. (JF)
BALTIMORE--As the Baby Boomers' children become freshmen, colleges and universities across the country face increased demand for on-campus housing. But next fall, 255 more students will be able to live on the University of Maryland, Baltimore County campus--followed by another 277 a year later--thanks to the generosity and creativity of the Baltimore-based Erickson Foundation. Perhaps more importantly, the gift to UMBC could change how charitable foundations operate in the future.
The Erickson Foundation, which supports educational, scientific and research initiatives, has agreed to finance and construct a new 500-bed residence facility, with 255 beds ready by August of next year. The foundation will assume full risk for the real estate project, estimated to be worth $14 million, and donate its usual construction management and development fees, estimated to be worth $1.25 million.
Following today's approval by the Maryland Board of Public Works, construction for the project will begin immediately. The new facility will be located next to existing residence halls and the A. O. Kuhn Library, on a site identified for residential, dormitory-style housing in the 1990 UMBC Master Plan. Details of the project are available at www.umbc.edu/ocp
UMBC will lease the land to the foundation (for $1 a year for 40 years), and rent rooms in the completed facility exclusively to UMBC students. UMBC will pay rent only on the number of rooms it uses in a particular year, and the foundation will bear the risk if this amount is not sufficient to meet the foundation's debt service associated with the project. UMBC will not own the building, nor be liable for its debt, but it will provide furnishings, maintenance and repairs. At the end of the lease term, the facility will be donated to the University of Maryland Foundation for UMBC to continue using as a student housing facility.
"I wanted to help UMBC meet its housing needs and create an academic village for students," says John Erickson, the foundation's founder. A member of the UMBC Board of Visitors, Erickson is also CEO and president of Erickson Retirement Communities, which developed the Charlestown and Oak Crest Village retirement communities in Maryland, part of a national network of similar communities with a total residency of 5,100.
The agreement between UMBC and the Erickson Foundation was approved by the University System of Maryland Board of Regents in August following an unsolicited proposal by Erickson after he learned about UMBC's housing shortage. Designated as a growth campus by the University System of Maryland, UMBC's enrollment is projected to increase 22 percent between 1997 and 2007 (from 9,863 to 12,340), including a 20 percent increase in full-time undergraduate enrollment (6,255 to 7,534). There has been a campus housing waiting list of nearly 400 students.
Erickson says he has already been contacted by two other foundations interested in his approach to the UMBC project. As part of the foundation's mission to report on educational research, Erickson also plans to study further how local foundations, which have access to bond markets and aren't required to earn a profit, can leverage their gifts to help recipients.
"I just assumed this had been done before," says Erickson. "The foundation can help the university deliver an educational need, which is the reason for our existence, and this allows us to do more than we each could individually. It could be done by anyone, really, and I think that's why people are interested in the project."
"The Erickson Foundation's gift to UMBC will help us meet a critical need for additional student housing," says UMBC President Freeman A. Hrabowski, III. "This innovative approach could not have been done without John Erickson's vision and leadership."
Posted by dwinds1 at October 10, 1998 12:00 AM