The University of Arizona is gearing up for a massive new residence hall, a 19-story tower planned for the northwest corner of Speedway Boulevard and Campbell Avenue that is pegged at roughly $250 million and expected to house more than 1,200 students. The project would bring a dining hall and other student amenities and would replace the existing Palm Shadows apartment complex on the site. If it moves forward, it would rank among the largest single-campus housing developments proposed near the university in recent years.
According to ConnectCRE, Mortenson Development plans to purchase the roughly 2.49 acre parcel, then transfer the land to the nonprofit Collegiate Housing Foundation at fair market value, provided that the foundation is able to close on tax exempt bond financing. ConnectCRE reports that Collegiate Housing Foundation would raise those bonds, then independently finance, develop, construct and operate the dorm under a 50 year ground lease with the university. The bonds would be paid back over about 40 years through residence hall fees, which would keep the university from taking on direct debt for the project.
The Speedway and Campbell intersection has been a lightning rod for tall infill ideas and rezoning debates for years, including earlier proposals for a 20 story building on the same block, so it is a safe bet the new tower will get close attention from neighbors and city officials. KOLD Tucson has documented past rezoning battles tied to the property, while a listing from First Pioneer Properties shows the Palm Shadows complex at 1815 E. Speedway Blvd. sitting on roughly 2.5 to 2.6 acres.
How financing and ownership would work
Under the proposed structure, Collegiate Housing Foundation, an experienced nonprofit student housing financier, would issue tax exempt bonds and run the residence hall under a long term ground lease with the university, which keeps the construction debt off the school’s books. Collegiate Housing Foundation notes that it has financed more than $4.5 billion in student housing projects around the country. The dorm plan is still dependent on the foundation successfully closing its bond sale and on securing any required city approvals before construction can begin.
Why the proposal matters
Developers have been steadily adding privately built student housing near the University of Arizona in response to ongoing demand for beds within walking distance of campus, and this tower would significantly boost the number of nearby units in one shot. Recent transactions, including a Capstone Collegiate project in the Main Gate Square area, show private capital playing an increasingly big role in reshaping the local student housing landscape, as reported by Multi-Housing News…