Merrimack College doesn't own the two new dormitories it opened on its North Andover campus Tuesday, Sept. 1. An Alabama-based nonprofit does.
The 540-bed Essex and Shawsheen residence halls were built through a $98 million financing arrangement that keeps the debt off Merrimack's books. Under the deal, the college leased its land to Collegiate Housing Foundation, a nonprofit that sold tax-free bonds to pay for construction. Real estate firm Greystar handled development.
The foundation collects rent from students living in the dorms and pays Merrimack for use of the land, WHAV first reported. At the end of the lease, the college takes ownership of the buildings at no additional cost.
Nicholas McDonald, Merrimack's senior legal counsel, called the contract a "multi-decades" deal after the ceremony but declined to specify the exact term.
The structure matters because Merrimack, unlike wealthier Boston-area institutions, cannot easily float its own bonds. President Christopher E. Hopey said at the ceremony that the college is not a wealthy school and praised the partnership for letting Merrimack expand housing without shouldering the construction debt directly.
That expansion comes at a pressing time. Merrimack welcomed 1,250 freshmen this fall, its largest class ever. The college now enrolls more than 4,100 undergraduates and nearly 2,500 graduate and doctoral students, according to Merrimack's website.
How the model works
Collegiate Housing Foundation, founded in 1996, exists solely to help colleges build student housing using tax-exempt municipal bonds. Because the foundation is a 501(c)(3) nonprofit, it can borrow at lower interest rates than a private developer. According to its website, the foundation has financed 70 housing projects totaling more than 47,000 beds at 53 schools in 26 states, with total project costs exceeding $4.6 billion.
All surplus revenue and ownership of the buildings flow back to the school when the financing ends, the foundation says.
What students get
The two four-story buildings sit at the corner of Turnpike and Elm streets, in front of the college's Collegiate Church of Christ the Teacher. North Andover-based Cube 3 designed them.
Inside are 351 traditional double rooms and 189 suites with private bathrooms and living rooms. College spokesperson Suzanne Adams said the halls will house mostly upper-class students in Merrimack's honors program. Common areas include kitchens, a pool table, laundry facilities and academic meeting spaces.
More housing changes ahead
The dorms are one piece of a broader campus overhaul. Merrimack recently purchased the Crest apartment complex, formerly Royal Crest, across the street from the main campus. About 800 students live there now. Hopey said the college is planning a major renovation of the property, though he did not provide a timeline or cost estimate.
At a separate ceremony Tuesday, Aug. 25, Hopey projected that Merrimack will attract roughly $500 million in investment to the area through 25 to 30 development projects in coming years, according to Andover News.
State Sen. Bruce Tarr attended the Sept. 1 ribbon-cutting and noted he had also been on campus the previous week for the opening of Merrimack on Main, the college's new creative arts facility.
