In October, our Board of Trustees met for two days in an intense and rewarding retreat to discuss how we could best move forward as an institution in honoring what I have come to call "The Kentucky Promise."
It's the idea that through the students we educate, the research we conduct and the service we render, our university serves as the best beacon of hope for this commonwealth's future. The question we wrestled with is how do we honor that covenant in a time of great economic uncertainty and challenge.
As always, our faculty, students and staff helped provide the answers. I had months of conversations in small groups, and a specially appointed University Review Committee composed of faculty and staff thoroughly examined our progress and remaining challenges.
The message emerging from both of these efforts was clear: It is time to renew and redouble our focus on enhancing undergraduate education, the cornerstone of what we do. A critical component of that effort was the urgent need to revitalize our campus infrastructure, paying particular attention to the space where our students live and learn and where our faculty perform their incredible work.
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Our board, in a decisive and unified voice, has authorized me to execute a ground lease with Education Realty Trust, (EdR), to construct a 600-bed residence hall on the field next to Haggin Hall. The new residence hall, which will open in August 2013, will house honors students along with high-tech classroom and office space. Equally important, our hope is to move forward over the next five to seven years with an aggressive agenda to combine a limited number of existing residence halls with a dramatic construction effort, yielding a 9,000-bed campus. While there are still many details to work out, this innovative public-private partnership has the promise to make this dream a reality.
If this process is successful, EdR — which operates thousands of college residence hall beds across 23 states — would own and manage the residential halls on grounds leased to it by the university. EdR is pledging several hundred million dollars in equity to make this transformation a reality. UK would continue to manage all of the residence life and student programming associated with the residence halls.
We are committed to keeping housing affordable for our students, to building in an environmentally sound manner and to ensuring that the interests of our employees are safeguarded as we transition to this private-public partnership.
Why are residence halls so important to our efforts?
First, our students do better — much better — when they live on campus, when they can become part of a vibrant university life and when they are able to more readily reach out to faculty and staff. Students who live on campus have a retention rate some 20 percentage points higher than those students who live elsewhere — nearly 90 percent compared to 68 percent.
Today, we operate about 6,000 residence hall beds. Only about 600 of them provide the modern living and learning space students expect. We have a waiting list each year — a few thousand students long — for the four modern residence halls in place.
Second, we live in a highly competitive environment when it comes to recruiting students. Universities across the country, particularly in the South, are recruiting some of our best and brightest with the allure of high-tech living and learning spaces. It's not simply a matter of better amenities. We are looking to design these new residence halls in ways that support student success, with space for study, collaborative work, teaching and learning.
Third, we are pursuing a public-private partnership because our capital infrastructure needs for instruction, research and student support space are so great across our campus. We get access to this private company's financial resources and focus our own resources — generated through innovative programs or philanthropy — on other vital campus infrastructure projects.
EdR is offering 100-percent equity financing to rebuild and manage our campus housing stock. That would save us significant resources to pay for and manage the debt associated with renovating and building classroom and desperately needed research space.
We should not wait until tomorrow to do what needs to be done for our students and our campus today. At each step along the way, we will continue to act in a transparent and prudent way, moving forward in a manner that serves the best interests of both the university and our students.