The Regents of the University of California (the “Regents”) approved the commercial terms of the P3 agreement for the UC Merced 2020 Project (the “Project”) on Thursday, November 19, 2015 at the Regents meeting held in San Francisco, contingent on a not to exceed limit on financial proposals.
The Regents’ approval authorizes the university to move forward with the Request for Proposals (RFP) phase of the Project with the three proposing teams that were shortlisted in January. The equity members for these teams are:
- E3 2020: Balfour Beatty Investments, Inc., Star America E3 2020, LLC.
- EP2 Developers: Plenary Group (Canada) Ltd.
- Merced Campus Collaborative: Lend Lease (US) Investments, Inc., Macquarie Capital Group Ltd., and ACC OP Development LLC.
According to Daniel Feitelberg, Vice Chancellor for Planning and Budget at UC Merced, the final RFP will likely be released “at the turn of the new year.”
The Project consists of the comprehensive development, design, construction, financing, operations, and maintenance of a broad mix of academic, residential, student life, and recreational facilities at the University of California, Merced campus. The planned campus expansion, which will add approximately 919,000 assignable square feet to campus facilities, is intended to support projected enrollment growth from nearly 6,700 current students to 10,000 students within five to seven years.
The Project is expected to have a significant economic impact on both the San Joaquin Valley and the state of California. It is anticipated that the Project will create 10,800 new construction jobs regionally (12,600 statewide) and inject $1.9 billion into the regional economy ($2.4 billion statewide).
The current schedule calls for proposals to be submitted in the spring of 2016, followed by the selection of the winning proposal and Regents’ approval of the external financing for the Project. Execution of the Project agreement would take place soon after, allowing for construction to begin in late 2016.
Delivery of the first set of facilities is scheduled for 2018, and the Project is expected to be substantially complete in 2020.