Preston Hollow Community Capital Completes $85 Million Bond Purchase for Mixed-Use Development in Westbrook
Preston Hollow Community Capital (“PHCC”) recently announced the purchase of $85.7 million in tax-exempt revenue…
Howard University’s Harriet Tubman Quadrangle dormitory, nicknamed The Quad, housed many of the school’s most notable alumni, including Toni Morrison and US Vice President Kamala Harris. But the rich history has been marred in recent years by questionable conditions at the 648-bed dorm.
“Living here, it’s not the worst, but it’s not the best. You kind of just expect that,” Gabrielle Crapps, a current freshman who resides at The Quad, said in an interview, citing several TikTok videos from October 2021 showing Howard students living in flooded, moldy and mice-infested dorms. A maintenance request sent for Crapps’s dorm upon her arrival in August still hasn’t been addressed.
But relief is expected for current and future Quad residents as well as other on-campus undergraduate students now that a new property manager is in place. The change was made possible after the university closed on a $300 million tax-exempt bond deal with Preston Hollow Community Capital earlier this year that consolidates financing for a majority of its undergraduate dormitories across the Washington DC campus.
This comes as the nation faces a student housing crisis and paves the way for Howard to finally address its ongoing issues. Almost 64% of the historically Black college’s undergrad student population reside on campus, according to Howard.
The deal has brought in Provident Resources Group, a Baton Rouge, Louisiana-based nonprofit to finance and oversee the majority of the school’s on-campus dorms. As a result, Provident and Howard have agreed, in turn, to remove Corvias Inc. as property manager.
It was the deterioration of a number of Corvias-operated dorms, including the Quad, that spurred students to hold a monthlong sit-in protest in 2021, dubbed the “Blackburn Takeover,” that garnered national attention. The demonstrations shed light on similar complaints at Georgia University residence halls and military base Fort Braggs Housing, all managed by Corvias.
Students and families campaigned for Howard to “Break Up With Corvias.” Close to 5,000 people signed the petition calling for the school to cancel its 40-year contract with Corvias that dated back to 2016. While the sit-in led to an agreement between student protestors and university leadership, complaints continued to linger.
“The university collectively is interested in ensuring that we have the best environment for all of our stakeholders, mainly the students. So, we’re looking to enhance our strategic plan by improving the current stock of housing,” said Derrek Niec-Williams, Howard’s executive director of campus planning, architecture and development.
Corvias did not respond to emails seeking request for comment.
Provident now owns the dorms until the debt is paid off. “We don’t view it as owning it. We view it as we’re a good steward of the asset,” said Steve Hicks, chief executive officer of Provident Resources Group, which suggested Howard replace Corvias with Campus Apartments LLC, a Philadelphia-based student housing company that manages more than 20,000 student beds across the country including those at Emory University and University of Pennsylvania.
Campus Apartments is no stranger to Howard. It has been managing two dorms for the school since 2013. According to Hicks, that successful relationship led to the expansion of the company’s role at Howard. Now it operates all but one of its eight undergrad dorms.
Bethune Annex is still currently owned by Howard, the university said, but it plans to bring the 550-bed dorm under Provident and Campus Apartments, similar to what the school has done with its other dorms so it can move to renovate and improve that facility.
According to Emily Wadhwani, a senior director at Fitch Ratings, the bond deal with Preston Hollow also helps the school’s credit rating because its housing debt will now be excluded from rating considerations since the debt is held under third-party partners, in this case Provident. Fitch recently upgraded Howard’s bond rating on strong enrollment growth, increased philanthropy and federal support.
Schools enter deals like these when they feel another entity may have more success in managing the residential facilities, according to Jessica Goldman, director at S&P Global Ratings.
“It’s a way for the schools to outsource expertise,” Goldman said, adding that it takes some of the weight off of the school operationally. “It really gives the university an opportunity to focus operation on academics and programming and other strategic items that they may be thinking about.”
March 24, 2023 at 12:12 PM CDT