This article was originally published on Common Edge.
I am by no means an expert on public-private partnerships. But for about 10 years, as the University of California Berkeley’s campus planner and then campus architect, I watched these developments play out in higher education—sometimes from a front-row seat, sometimes as a participant. During that time, this strategy, promoted with great enthusiasm and optimism, was touted as the answer to whatever problem arose. And yet the definition of a public-private partnership was slippery. The concept itself seemed to be all things for all people, depending on what was needed, who was recommending it, and what equivalents (if any) existed outside the university. The bandwagon continues to play today, making it ever more important to nail down the pros and cons of this development strategy, not only for colleges and universities, but for all public decision-making.
I believe the jury is out on the effectiveness of these projects. We haven’t yet seen the long-term impacts on campus placemaking. Universities enter into these partnerships with enthusiasm, hoping they can solve a wide range of problems that the universities can’t or won’t address on their own. I acknowledge that private partners can step into situations where the colleges and universities are unable to act in their own interests. There are certainly situations—particularly in cases where higher education, public investment in infrastructure, and economic development go hand in hand—that public-private partnerships do exactly what their cheerleaders say: address current needs and provide opportunities for the future that none of the entities could have done alone.
But all proposals for public-private project development should be approached with deep skepticism, strong institutional guardrails, and serious backbone on the part of college and university leaders.
In my case, the problems that public-private partnerships promised to solve were related to the design, construction, management, and operations of the physical environment. Mostly the private side of the partnership—that is, what was proposed to solve the problems—involved real estate transactions. And for good reason: planning, architectural design, and building construction are the same “work products” as those done for real estate development.
There were two general reasons that UC Berkeley began exploring and then creating public-private partnerships for the planning, design, and construction of its capital projects. The first was that rising construction costs made it harder and harder to raise and/or borrow enough money for campus projects of all types. The second was influential alumni and donors—many of them real estate developers—who believed that campus staff lacked the skills to manage projects, that the campus was incapable of delivering construction projects on time and on budget. As far as I know, however, none of those developer-donors had any experience with values and/or mission-driven building.
The donors may have been the particular context at Berkeley, but public-private partnerships for capital projects are front and center in higher education throughout the U.S. At first, these involved student housing, and the idea seemed more or less reasonable. Construction of housing at UC campuses and elsewhere typically involved construction financing of some sort; and, for paying the mortgage, there was a dependable revenue stream from student rents.
What everyone ignored, from the very beginning, is that higher education is its own sector. Its values, programs, and mission are quite different from other industries—and, specifically, different from those of for-profit businesses. Providing living spaces for students is not the same thing as building apartment complexes, even if they share characteristics. The most significant difference is that students have an institutional affiliation that comes with important responsibilities, expectations, and rules for both renters (students) and landlords (the universities). Student housing at American colleges and universities has long provided more than just bed space. The residential experience itself is an integral part of student education, and student life professionals support social and intellectual growth as well as academic endeavors.
By the time the University of California began exploring these partnerships in earnest, stories were already circulating in campus planning circles about unintended consequences. For one thing, it was very hard to assess whether or not these partnerships were effective, because each situation was so different in terms of goals, expectations, personalities, and organizations. Perhaps one shared characteristic was the extreme optimism and many promises with which these partnerships were pitched. Mostly, the colleges and universities turned a blind eye to whether or not the partnership would actually enhance higher education’s mission, whether the results would reflect institutional values and how much was being sacrificed to the partner’s pro forma.
After all, these are basically negotiated deals. In most cases, in exchange for getting something built (without the university carrying debt on a balance sheet, or voters approving a bond measure) or for managing an administrative operation (without the university having to support personnel or technology), the private partner makes a profit from a university-related activity.
The University of California’s four-part mission is clearly articulated: education, research, public service, and healthcare. Notably, profit is not included.
Still, it seemed possible to make a case for some profit-driven public-private partnerships. Because they were profit-driven, these projects rarely strayed from a few building types: housing, parking, research incubators. The national student housing companies offer management, maintenance, and student services along with building construction services, and what is included in their deals with the colleges and universities varies. These companies have to deliver a satisfactory “product” (“beds” and residential experience) to their “customers” (students) or risk financial failure. Business plans adapt to circumstances to avoid this often to the detriment of college and university values. For example, consider the post-pandemic luxury student housing boom. There is now no business incentive to invest in housing for those students needing affordable or low-cost housing. This presents a troubling conundrum for colleges and universities—especially public universities—committed to the education of rich and poor alike.
At UC Berkeley, students in privately developed and managed residence halls (built and/or renovated on university-owned land) pay more than students in university owned and managed residence halls. The public-private residence halls are nicer: new, well-maintained, with amenities. Although not intentional, these public-private partnerships have created a two-class system. Is providing a choice of so-called premium rooms, at a higher cost than other residential options, really compatible with campus values?
University interests play out over a long horizon. Student housing needs, for example, are ongoing. What happens when the interests of the university and its business partners diverge? Lately, we see hedge funds, REITs, and other financial investment groups purchasing student housing companies. The largest student housing company in the country was recently acquired by the world’s largest “alternate asset manager.” Students may not appreciate being the cash cow for a company far removed from the business of housing students. It’s possible that these projects will stop being profitable (or will not be profitable enough for the funds), and universities may find themselves looking toward an unstable long horizon as bankruptcy, ownership transfers, and more affect these public-private partnerships.
I am keeping my eye on the parking projects, waiting to see what happens as deals that created profitable campus parking structures for private operators begin to meet more aggressive sustainability policies and changing cultural preferences about driving.
But far worse are the donor development projects, the vanity projects—many of them projects from hell. That is, a donor, for whatever reason, believes that he/she/they can best call the shots related to their personal philanthropy. They don’t expect to make a profit, but they do expect that they will be the ones making the decisions about the money they contribute to the institution. For capital projects, they decide what a campus needs, where it should be located, how it should be designed and delivered. Once the project is finished, they “gift” it to the campus. When the campus is lucky, the donor, campus representatives, and design professionals work together and projects succeed. But donor-driven projects also take scarce land resources for low-priority projects and don’t always reflect campus values regarding design and longevity. Donor projects can cost the universities a lot of money—often, debt—when expected contributions don’t materialize.
Perhaps this is business as usual at private universities, but at a public university like UC Berkeley, these donor-driven, donor-sponsored, and donor-delivered projects were a category within the public-private partnership portfolio. I believe it is, at best, a misnomer to call these public-private partnerships. More accurately, these are philanthropic blackmail. The point of public university decision making processes—typically disdained by donors—is to make sure that decisions reflect not only the values of the institution but also the values of the public that supports the universities. Many, but not all, of the donors sponsoring these projects seemed unconcerned about the campus as a whole, unwilling to leverage their particular interest (and dollars) in ways that might improve the overall public good. For example, the campus was committed to buildings that addressed environmental issues and that met sustainability goals. The architects who worked for our private development partners usually tried hard to accommodate our concerns. But in the end, the priorities of the developer—primarily cost, but also consistency and standardization with the company’s or donor’s projects elsewhere—took precedence.
The best (and rarest) donor projects provide, thoughtfully and with grace, what a campus can’t do for itself. The worst of them foist inappropriate and/or poor-quality buildings and, sometimes, programs onto campuses where university leaders make Faustian bargains hoping for future philanthropy.
As campus architect, I worried that both profit-driven and donor-driven partnership projects ignored the design values of the university. By that, I didn’t mean style or materials or whether or not the building (or its architects) made the cover of a magazine. I was interested in buildings that fit our culture, that reflected our broad understanding of the educational program, and that intelligently responded to the physical context of the campus, its historic buildings, and its landscapes.
Public-private partnerships, including donor-developed projects, are facts of life at most U.S. public universities. Yet it’s imperative that the physical campus shaped by these projects reflects the core values of our institutions. Price and donor interest shouldn’t trump the need for buildings that fit with community culture, that address program needs, and that balance past, present, and future in ways that preserve the physical campus as a unique and identifiable place.
Our responsibility as campus planners—as designers and stewards of campuses—is to step outside the echo chamber and to realistically assess proposed public-private relationships and the deals that we make with private partners and donors out of exigency. We have to be the skeptics. Although we can’t identify all unintended consequences, we can make sure that institutional values are front and center in the negotiations that lead to these partnerships. We can identify and implement guardrails. And we can provide backbone.
