Brookings Advocates for Small Business Town Hall Meeting Power Point Presentation

7/30/2019 Brookings Advocates for Small Business Town Hall Meeting Power Point Presentation

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Hosted by Brookings Advocates for Small Business

11-12-2012

Q and A session to follow presentation


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HISTORY of

COOPERATION


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SDSU and Brookings Brookings businesses have provided

junior/senior housing, retail andmany other products/services for

SDSU students for decades.

SDSU traditionally focused onAcademics, Faculty, and Facilities tosupport learning and research.

This partnership has worked well forboth.


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SDSU proposes a Game Changer Fall 2009

NW quadrant MasterPlan revealed


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SDSU NW Quadrant Master Plan


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NW Quad Located NW of Ag

heritage museum

The Master Plan

includes: 608 beds in upscale

apartments Two 115 unit assisted

living complexes

60 Active Adulttownhomes Retail spaces 100 room Hotel and

conference center


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Retail at NW Quad


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Anticipated Retail:

Grocery store

Fitness centerCoffee House

Interactive caf

Convenience store


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What has happened since 2009?

Initial NW Quad plan met with immediate significantcommunity resistance appearance before city council informative meeting held (no media present) letters sent, Personal visits

Many thought hoped - the plan would be reconsidered. Inreality, it continued under the radar

June 2012, the plan reappeared with SDSUs request to the Boardof Regents to issue a Request for Proposal (RFP) for Phase 1 ofthe project.

Result - Regents heard testimony but ultimately approvedissuance of the (RFP) SDSU Allowed to test the water


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RFP Issued November 7:

Public-PrivatePartnership

SDSU leases land toPrivate Partner whobuilds, owns andoperates the apartments


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Project Includes: 300 Bed upscale apartment

complex with: Underground parking

auxiliary Services may

include coffee shop, fitnesscenter

SCALE? Twice as big asInnovation Village

2009 estimated cost of $16.9million Currently estimated over $20

million

Innovation Village Private


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What are the impacts? Game Changer Junior/Senior/Grad. student

housing market currently served by private enterprise.

SDSU full-time equivalent(FTE) enrollment declining 2010 10,513 FTE

2011 10,421 FTE (0.88% decrease)

2012 10,153 FTE (2.57% decrease) Source BOR fact book 2012

Online distance learning is growing


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What are the impacts? Law of supply and demand

Increased SDSU housing and decreasing enrollment

To achieve SDSU phase 1 goal for upscale housing forJuniors/Seniors SDSU must take from existing market.


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Phase 1 impacts?

Property Taxes:

Minimum Tax loss of $44,640 per year (land value only)

Ultimately a Tax loss of $447,600 every year

Estimated tax loss for entire proposed NW quad???

Lost revenue for K-12 school system andcity/county government

Impact = Less service or more taxes?


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Phase 1 impacts?

State owned tax exempt land is a form of governmentsubsidy.

Government subsidizing upscale housing?

Will these new apartments be only for students?

Rent to faculty, alumni, general public? Will alcohol be allowed?

What if they cant fill them like Coyote Village (USD)


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Coyote Village (USD)

60% full when opened, so another dorm was closed

Freshmen through graduate students live there (originallyintended for only upper division students just like RFP for NWQuadrant)

Coyote Village is now the first wet (allows alcohol) dorms in SouthDakota

A USD Senior Student Well its a lot cheaper being a collegestudent to buy a case of beer than go downtownhttp://www.kcautv.com/story/19401420/new-alcohol-policy-so-far-a-success-at-usd?clienttype=printable

STATE OWNED AND OPERATED - no property taxes paid to

fund local schools, government, etc.


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Brookings apartment housing 2008 city housing study

Vision Brookings funded

RECENT STATISTICS: 09 9 buildings 181 units

10 1 building 2 units

11 5 buildings 30 units

12 18 buildings 159 units

372 units in 4 years =average of 93 units/year


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Brookings housing Phase 1 of NW quad equates to 240 units or

Since Brookings has averaged 93 units/yearTHEN 240 units = 2.6 years of no private

multifamily construction How many contractors lose work?


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Impact on Construction?

Private partner atNW quad likely anational company

Invited developersinclude


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National company will likely import their own labor,sub contractors and some or most suppliers

To be eligible to respond, the successful firm or teammust demonstrate that it has provided and hasdeveloped successfully and operated similar typehousing and/or mixed-use projects at one or moreuniversities under similar market conditions.

Quoted from SDSU RFP document


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Not qualified to bid unless partner

with national firm


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For RENT signs are everywhere!


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LOTS of choices!


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Something for EVERYONE!


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Retail/Commercial space


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Unintended Consequences

SDSU wellness center

Great amenity

Great for SDSU

Supported financiallyby City Council


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But

Beautiful facility,


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Local Business Lost


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Enrollment at South Dakota State(According to 2012 Board of Regent Factbook)

12,376 12,816 12,725 12,583

10,197 10,513 10,421 10,153

02,000

4,000

6,000

8,000

10,000

12,000

14,000

2009 2010 2011 2012

Headcount FTE


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SDSU Brookings Campus Enrollment Projections(According to the updated 2011 SDSU Residential Life & Dining Services Master Plan)

10,27210,728

11,14511,518

11,754

9,500

10,000

10,500

11,000

11,500

12,000

Actual 2009 Actual 2010 Projected 2011 Projected 2012 Projected 2013

Brookings Campus


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Decline in Headcount

12,100

12,20012,300

12,400

12,500

12,60012,700

12,800

12,900

2009 2010 2011 2012

Headcount


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Decline in Full-Time Equivalent Students

10,197

10,513

10,421

10,153

9,900

10,000

10,100

10,200

10,300

10,400

10,500

10,600

2009 2010 2011 2012

FTE


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Growth of Distance Education

10,60911,865

13,28615,973

17,916

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2007 2008 2009 2010 2011

Unduplicated Headcount Regental System


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Drawing the Proper Caveat

Distance education is increasing rapidly nationwide

Fully on-line, real-time, interactive, video-streamingeducation is increasingly used all over the country

Increasing numbers of students nationwide receivedegrees without ever setting foot on the residentialcampus from which they are taking classes

All projections of actual enrollment at the Brookingscampus most fully factor the changing reality of highereducation in North America


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The Takeaway

2011 - FTEs fell almost 1% over 2010

2012 - FTEs fell 2.57% over 2011

Fall 2012 FTEs are less than theywere in 2009

Fall 2012 Total headcount only

207 over 2009

But many of those total headcountare online and not in Brookings!

But SDSU projected 3%Brookings enrollmentincreases through 2013

SDSUs plan of erectingdorms and upscaleapartments is predicatedupon rosy enrollmentprojections not being

actualized!

Why would the State ofSouth Dakota build morehousing with fewer students?


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2012 Brookings Headcount Versus Projections

11,518

11,075

10,800

10,900

11,000

11,100

11,200

11,300

11,400

11,500

11,600

Projected F2012 BrookingsEnrollment

Actual F2012 BrookingsEnrollment

Projected F2012 BrookingsEnrollment

Actual F2012 BrookingsEnrollment


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Declining Graduate Student Numbers

But declining numbers ofstudents in Brookings willnot likely need so muchhousing

SDSU has seen a decreaseof 20 Ph. D students and107 masters students thisfall (Brookings Register,Sept 27)

Decrease in graduatepopulation of 127constitutes an 8% declineover 2011

1,674

1,532

1,450

1,500

1,550

1,600

1,650

1,700

Projected F2012Graduate Students

Actual F2012Graduate Students


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The Future?

Graduate Student Populationnot Growing

8% reduction from 1,659 to1,532

But the Master Planestimated 1,674 for Fall 2012

[There are] probably two drivers in that,President Chicoine said. One is the counter-cyclical nature of graduate student enrollment.

The numbers tend to increase going into, andin, a recession and to decline coming out,because workforce opportunities are strongerfor students with an undergraduate degree andthey then choose, perhaps, to pursue a jobopportunity as opposed to staying in gradschool.

And then the other, of course, is we had fewerfaculty in our university this last year becauseof the reduction in state support, he said.And, the number of faculty are reallyimportant for the recruiting and mentoring ofgraduate students. So, I think that a

combination of those two factors has impactedour masters student numbers inparticular. (Brookings Register, Sept 27)

The latter explanation is probably the bestexplanation.


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Student Housing Capacity(Compiled from SD Board of Regents Fact books)

SDSU adding 800 beds byFall 2013

This will drive availableoccupancy to well above4,500 with reconversion

Total dorm occupancy atSDSU was about 3,000 justa few years ago 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2009 2010 2011 2012-13

SDSU Student Housing Capacity

SDSUStudentHousing

Capacity


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Interesting Fact

According to the SDSUHousingMaster Plan, in 2010 SDSUprovided housing for 32.1% of its population

This was among the highest in its peer group Only NDSU was higher at 33%

This was before all of the construction taking place the past twoyears eventuating in 800 new beds!

By comparison the University of Minnesota provides housing for

12% of its students

But why in a town where the private sector can respond andbuild to student need, would the State be wanting to aggressivelydo so?


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What If? The Master Plan projected 1,674 graduate students

in the Fall of 2012, but SDUS has only 1,532,underperforming by 8.4%

The Master Plan estimates 1,782 graduate studentsby the Fall of 2013, but this is would constitute nowa 16.3% increase highly unlikely

What if the actual enrollments on campussubstantially underperform projected enrollmentson campus?


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The Master Plan Has the Answer Two options to manage an absolute decline in

freshman and sophomore enrollment are:

Deploy some or all of Hansen Hall single-occupancyrooms to upper-division students, assigning more

sophomores to the southeast freshman and sophomoreneighborhood

Withdraw some or all of the release of the

approximately 100 sophomores to Greek Village chapterhouses, assigning more sophomores to the southeastfreshman and sophomore neighborhood (Master Plan,27).


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Looking to the Future

Student enrollment projections over the last two yearshave substantiallyunderperformedwhat the SDSU

Master Plan specified

With the growth in distance education and fundingcuts and faculty losses from many SDSU flagshipprograms, there is no reason to believe that strong

enrollment increases will allow the projections uponwhich theMaster Plan is based to be realized

When in doubt it is always best not to overbuild


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Northeast Quadrant

Innovation Village already exists to handle the upper-divisionand graduate student housing needs next to campus

It is as close to much of campus as is the proposed NW build

It is adjacent to the SDSU Research Park, a place that SDSUgraduate students will work!

It is operated privately and when fully complete will generatemore than $400,000 a year in taxes

It has the amenities already projected by the NW build and candeliver housing much more cheaply to students

Why not let private investors take the risk rather than the Stateof South Dakota?

Why Reduplicate?


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y p

Already Up-Scale


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y p

All the Amenities


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Innovation has Vacancies!

There are 25 units available right now!

Rents on these Innovation units are already running wellbelowwhat SDSU projected in 2009 that students would

have to pay in the proposed SDSU up-scale apartment

Where will these students come from?

What happens if SDSU cannot achieve these rents?

Will the apartment complex be bought and gifted back toSDSU thus eliminating any chance for Brookings County toreceive taxes on it?


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Final Thoughts

Brookings is growing

SDSU currently is not growing, but declining in students

Distance education allows SDSU students to receivedegrees without living in Brookings

SDSU will have increased its housing capacity 50% (3,110 to

over 4,500) from 2009 to 2013

Numbers of students not required to live on campus hasshrunk to 6,066, almost 10% lowerthan in 2008


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Final Thoughts

One might argue that keeping students on campusincreases retention

There is solid empirical data showing that keepingfreshmen and sophomores on campus increases student

retention

Some data suggests this to be true for upper-divisionstudents and possibly graduate students as well

But extreme caution must be employed in contextualizingnational data to our local situation

The issue in retention is one of building community andBrookings already has it!


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Students in large cities can get lost and drop out if they

are living in isolation and removed from campus

Brookings is not a large city, and nowhere in our towncan students become lost and totally removed from

campus

Solid empirical studies show that student concernabout cost increases as they get older, and thatgraduate students are thus least likely to pursue up-scale and expensive housing


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In SUMMARY the FACTS:

SDSU is an extension of state government

SDSUs purpose is to educate

SDSU has historically not served the housing needs ofthe junior/senior & grad. student population. Thathas been done by private business.

SDSU (on campus) enrollment is decreasing at thesame time that distance learning is on the rise.


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In SUMMARY the FACTS:

Any new SDSU housing that captures part of thejunior/senior & grad. student market MUST TAKEthat market from existing private business.

Law of supply and demand says that excess vacancyleads to no new construction - up to 3 years fromphase 1 alone

Because an active housing industry is needed for avibrant economy, a drastic and prolonged slowdown in

housing construction will damage the local economy


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In SUMMARY the FACTS: TAX REVENUE for K-12 education and local

government is LOST:

OVER $44,000 Lost immediately and EVERY YEARthereafter from private building on state land

MORE than $450,000 LOST EVERY YEAR once thelease expires and the property converts to all stateowned.

Taxes on un-built private housing (during years ofwaiting for the market to catch up) - never happens.


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What can we do? SDBOR have not issued final approval to proceed.

Because SDSU is an extension of state government theyshould be responsive to the people.

Handout available with basic information about theproject, our concerns and contact information for you tospeak up.

THANK YOU!

Questions and Comments


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A history of cooperation

The future?

Documents

Brookings Advocates for Small Business Town Hall Meeting Power Point Presentation