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Image 10 of Minutes of the University of Kentucky Board of Trustees, 2011-12-13

Part of Minutes of the University of Kentucky Board of Trustees

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-10- Now, I want to stress that we are not asking for Board action today. This is just an infonnation session. But, I wanted to go through our next steps. First, we are going to negotiate with EDR and develop a very general Memorandum of Understanding on how we proceed. It is going to deal more with Phase I for the single facility. We expect to build this facility on Haggin Field, behind Haggin Hall on University Drive near the library. To detennine if the P3 is an optimal solution for us, we will evaluate the potential agreement which will address the rental rates, not only now but in the future for our students. Our goal is to replace the existing housing and have annual increases that are less than what we are currently doing. So, our students will be paying in the future less than what they would nonnally but live in new facilities. If the P3 does prove optimal, then the action will be asking the Board of Trustees to approve a ground lease where we would lease the land to EDR, and they would construct a facility. It would be a very long ground lease. In this business, it runs from 40 to 60 years. So, it is going to depend on the negotiations ofthe contract on how long our ground lease will be. In most of these situations, the facilities revert to the university at the end of the ground lease. If we get this far, we will then also enter into an Affiliation Agreement with EDR, and this gets into all the details you can only imagine that would come with allowing or asking a developer to manage our housing. We are talking about the operation and maintenance requirements of this facility. We are talking about the rental rates and who is going to collect the rental rates, insurance, and UK’s employees. In response to our proposal, EDR has agreed to make a commitment to our existing employees. So, we would have three different options for our staff; if we move this way. We could find our custodians and maintenance folks other positions on campus. We do have a lot of tumover in that area. So, if they are currently employed, we can handle it. We could work with EDR on transferring the employees to them if the employees choose to do so, or we can keep them on as our own employees, and then reimburse or have EDR reimburse us. EDR is willing to work with us for any of those options as we move forward. Of course, nothing is too good to be true. And so, we will have to work through the details and see what is possible. Now, we want this to be as a transparent and inclusive process as possible. So, we have already initiated some of the discussions, and we will continue to have discussions with the Govemor, the legislative leadership, bond rating agencies, local communities, as well as faculty, staff; and students. So, this is where we are at this point. We can give you updates as we go through this process. We will need to decide in January which way we want to go if a donn is to open in fall 2013. A funny story with that is that President Capilouto said he wanted a new donn and asked, "When can you have it open?” Bob Wiseman said, "It is no problem. We can have it open in August 20l4.” President Capilouto responded, "Well, you got the month right.” This is a very aggressive timeline, but we will have a new donn in 20l3 whether it is in a traditional manner or whether it is a public/private partnership. Ms. Martin concluded her remarks by stressing that if UK goes with the public/private partnership, it would only be for Phase I. After Phase I is completed, they could then step back re- evaluate it, and decide how to approach Phase II. They could decide: do we want to do it all, do we want to do it with this developer, or do we want to do it in a traditional manner?