Daily Archives: 2020-08-07

Lost Summer: How Schools Missed a Chance to Fix Remote Learning

Source: NYT > U.S.

Article note: This right here, including at the college level, is what I've been yelling for two months. One of the courses I'm working just got pressured into an "opportunity for at least 50% in-person" scenario when we went to file our final "Fuck it, we're going online, we're confident can provide an >= experience online as compared to in person with the preconditions" decision.

Education leaders spent months preparing to reopen classrooms. But with online learning set to continue for millions of students this fall, schools must catch up with reality.

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Housing developer reminded universities about project debt as they mulled fall plans

Source: Inside Higher Ed (news)

Article note: I'm sure we're gonna find out about more of these situations soon. I've been grumbling about the unwise massive public-private not-UK's-dorms project being a moral hazard since they started. UK's contract with EDR is, as I understand, much less of a problem than the ones a lot of places went for, but also we have a bunch of board members in adjacent construction industries and such, so we may find out some of the apparently-nonsensical behavior is based on similar pressure.

Corvias is a privately owned company based in East Greenwich, R.I., that contracts with higher education institutions and the U.S. military as a housing developer and landlord.

The company counts more than 100,000 beds and 48 million square feet of space under management at over 30 properties across the country. Its portfolio of college and university projects spans well over a dozen campuses mostly across the nation’s capital, South and Midwest.

But most of the campuses where it provides student housing services are within the University System of Georgia. The system hired the company to design, build, renovate, manage and maintain student housing under a decades-long agreement that was worth $517 million in 2014. The agreement cut the university’s student-housing debt by almost $300 million, it said at the time, and had the company developing 3,683 new beds and managing 6,195 existing ones across nine different system institutions.

Such deals between colleges and for-profit companies often are referred to as public-private partnerships, P3s, or privatized student housing. P3s aren’t limited to the higher education space, but they’ve grown more common there in recent years. Often the deals are structured in a way that allows colleges and universities to shed debt from their balance sheets, update their housing stock and receive cash flow from student rents, all while offloading onto a third party the difficulty of actually managing student housing.

Frequently the for-profit partner will borrow money in order to fund projects’ up-front costs, a practice sometimes called off-balance sheet borrowing for colleges and universities, because it doesn’t show up as borrowing in their financial statements. Deals are structured so that the for-profit company is paid back over time with a share of the rents and fees a project collects. Higher education partners often receive a piece of the profits, too, although specific terms of the contracts and borrowing vary greatly. Who gets paid what, when, is different from contract to contract. So too is who is on the hook should the projects not generate enough money to pay back bondholders or meet lending agreements.

Privatized student housing projects’ financial health during the COVID-19 pandemic has been of high interest in investor circles. Some projects took a financial hit when students demanded room and board refunds after colleges and universities sent them home in the spring. Ratings agencies are watching closely to see what happens in the fall.

Also concerned about student housing this fall are colleges and universities. The exact number, mix and behavior of students on campus, in classrooms and in dormitories is critical if institutions are to reopen their residential operations safely in an era when social distancing, masks and ventilation have become tools of the trade against the coronavirus infection.

Some colleges that had planned to bring many of their students back to campus this fall have been reversing plans as infection rates and totals remain high in states across the country. But institutions in the University System of Georgia have been moving to bring students back to campus and to hold in-person instruction this fall, even as some students and instructors ask for more flexibility in who teaches and attends class. Also planning to return some students to campus and residence halls is Wayne State University, a public institution in Detroit.

So it’s notable that on May 29, representatives from Corvias sent both the University System of Georgia and Wayne State nearly identical letters reminding them of the debt the company took on under privatized housing agreements and asserting that the universities don’t have the “unilateral right” to put policies in place that would limit the number of students who can occupy student housing or to reduce housing fees under the P3 agreements.

The letter to the Georgia system goes further, adding a paragraph saying the Board of Regents does not have the unilateral right to prevent students from living on campus, discourage students from living on campuses or exercise contractual rights that have a material impact on Corvias’s operation and management.

“As partners in a 40-year arrangement, we believe … interests should be aligned, and that critical decisions that could impact housing fee revenue should be made with consideration of the long-term financial viability of the on-campus student housing project,” each letter says, before detailing debt the company took on for the different universities.

“And while the Concessionaire and lender have accepted the risk of fluctuating student housing demand, they have not accepted the risk of unilateral actions” by the institutions that would “negatively impact” student housing fee revenues, the letters continued.

A Corvias spokeswoman did not respond to multiple requests for comment.

Officials at the University System of Georgia, several of the universities operating within it, and Wayne State University said the company did not influence decisions about fall housing.

Corvias’s letter was attached to the bottom of a Georgia Board of Regents agenda for June 10 that detailed “P3 Housing Concerns and Risks.” That agenda notes that, “Since this letter, Corvias has requested a meeting to discuss return to campus P3 housing plans.”

The agenda also details the financial impact of a Georgia State University plan to occupy only 75 percent of P3 housing. Such a plan would cost $3.1 million in revenue and drop the project below key financial indicators required by lenders, requiring contributions from Corvias or the Georgia system in order to prevent default.

“Georgia State University approached system leadership with a plan to reduce housing density for the fall semester and was told it was their decision,” a system spokesman, Aaron Diamant, said in an email. “The system office performed an analysis to review the impact as we generally do with our housing portfolios. It became apparent to GSU in July that dramatically reduced student demand for housing has resulted in lower density than what was being planned for, and therefore the issue was moot and the proposed plan was not implemented.”

Georgia State issued a similar statement.

“At no point was Georgia State University pressured to open its residence halls at full capacity this fall,” it said. “In the interest of health and safety, early this summer Georgia State developed a plan to reduce the number of Housing residents, but the number of students opting out of campus housing made it unnecessary for us to implement our plan. Over the last two months, many students have cancelled housing contracts. We continue to move students off our wait list, and yet we are certain to open at much lower density because of attrition.”

Georgia State did not provide information on how much revenue it now expects to lose because of lower fall occupancy rates, nor what loss might be attributable to Corvias beds or those the university manages on its own. It’s too soon to say because students still are choosing their room assignments, according to university officials.

Wayne State in Detroit expects its residence halls to be about half-full for the upcoming semester, said Matt Lockwood, associate vice president for university communications.

Lockwood pointed to a committee system that determined fall reopening plans.

“All decisions regarding fall semester, including campus housing, were made by those subcommittees and endorsed by the Public Health subcommittee consisting of campus medical experts and did not include Corvias,” he said in an email.

Five Corvias employees were listed on a 25-member housing, dining and campus retail subcommittee at Wayne State that played a part in making fall reopening plans.

In a June 9 letter responding to Corvias, Wayne State’s associate vice president and chief housing officer, Timothy L. Michael, pointed out that the university had invited company staff members to participate in COVID-19 mitigation planning. He called for flexibility and emphasizing health and safety.

“The health and safety of the Wayne State community is our highest consideration, and the success of our housing partnership will depend on the confidence that students, faculty and staff have that everything possible is being done, dependent on evidence-based science, to reasonably keep them safe,” Michael wrote. “Because WSU does not have a housing requirement for our students, occupancy for fall 2020 will depend directly on creating an environment where residents are safe and feel safe.”

Letters Noting Debt Levels

On May 29, a Corvias vice president, Chris Wilson, wrote to the University of Georgia system’s vice chancellor for fiscal affairs and treasurer, copying its vice chancellor for legal affairs. An amended 2015 agreement under which the company developed and leased student housing was the topic.

“We understand the BOR and the nine institutions involved in the Phase 1 Student Housing MCA may currently be deliberating alternative plans for the Fall 2020 semester, and we therefore felt it important to communicate directly with you regarding our concerns, as the Concessionaire, regarding certain actions the BOR may be considering at this time,” the letter began.

It went on to argue that regents do not have several unilateral rights under the P3 agreement before noting the amount of borrowing the project required.

“It is important to note that the Concessionaire took on $548 million in debt in order to defease over $311 million of BOR debt and facilitate the construction of approximately 6,500 new beds and significant renovations of approximately 3,500 beds across the nine involved USG Institution campuses,” the letter said. That was nearly identical to language in the company's letter to Wayne State, which listed $307 million in debt the company took on to defease $120 million of university debt while performing construction and renovations.

Corvias planned to follow U.S. Centers for Disease Control and Prevention guidance on social distancing, cleanliness and disinfecting “as closely as reasonably possible,” the letters said. They pointed out that CDC guidance did not call for social distancing among housemates, arguing roommates are considered housemates.

“Accordingly, while the CDC may be of the belief that reducing density in student housing may lower the possibility of infection, we do not believe that requires a reduction in the number of roommates that would typically be permitted in the Phase 1 Student Housing or the number of students that can be housed in a given building,” the letter to the Georgia system said, again mirroring language sent to Wayne State. “Rather, we believe a more appropriate course of action would be to do things like limit the occupancy and use of common areas, shared bathrooms, and elevators -- all things we are already preparing to address, if and as necessary this Fall.”

Limiting occupancy of on-campus student housing won’t benefit students or the university at large, the letters added. Displaced students would be forced to live off campus, likely paying more and not receiving “the benefit of the same level of health-conscious operations the Concessionaire and the University can maintain in the on-campus housing.”

The Corvias letter to the Georgia system was first surfaced Wednesday by a Twitter user posting the results of a public records request, which sought documents related to fall reopening plans. Inside Higher Ed subsequently sent copies of the letter to the University of Georgia system office and each of the nine Georgia institutions with housing projects in Corvias’s portfolio, as well as five other higher education institutions in Corvias’s portfolio. It later obtained the letter sent to Wayne State.

Georgia Universities Deny Feeling Pressure

The spokesman for the Georgia system said each individual university in the system made its own decisions regarding housing capacity for the fall.

“Each University System of Georgia (USG) institution made its own decisions regarding housing capacity for fall semester,” Diamant said. “At no point did any campus indicate the decisions they made regarding housing capacity were influenced by the concerns raised by Corvias.”

In addition to Georgia State, several other institutions within the Georgia system said they were not pressured over their fall plans.

“As we developed our extensive return to campus plan, we considered a wide range of options for housing and other operations on campus and were not under any outside pressure to make a specific determination,” a spokeswoman for Georgia Southern University said in an email.

Georgia Southern totals 5,350 beds across two campuses in Statesboro and Savannah, according to the spokeswoman. The Statesboro campus is fully occupied, while the Savannah campus, which is the former Armstrong State University and the campus with privatized housing, is at 68 percent occupancy.

The Savannah campus’s total capacity is 1,411 beds, 68 percent of which are filled. Privatized student housing there totals 1,219 beds and is occupied at a slightly higher rate, 74.2 percent.

An official for the College of Coastal Georgia also said in an email that there was no outside influence.

“The College of Coastal Georgia has made its own decisions regarding the capacity of its residence halls this fall. Housing capacity has not been limited, and at no point was Coastal Georgia pressured regarding fall capacity,” said Jamie Bessette, vice president for advancement. “Current housing capacity numbers are fluid, as some students are still making decisions about their fall housing plans.”

Dalton State College emailed a statement from its director of residential life, Tim Reilly.

“We have taken concerns surrounding the pandemic very seriously, and the health and safety of our students remains a top priority,” it said. “Dalton State has one residence hall with 363 beds, which is operating at 74% capacity this year. We knew as early as June that our occupancy would be less than in previous years, so our demand didn’t necessitate a conversation about capacity. Some students were comfortable having a roommate, but any student who desired a single room for fall semester was accommodated. There was no outside influence to increase or decrease capacity or limit students to a single occupancy room.”

Dalton State also provided a statement from its president, Margaret Venable.

“The health and safety of our Roadrunner family remains a top priority,” it said. “Our campus plans hinge on four pillars: symptom checking, hand washing, wearing a face covering and social distancing. We have changed our academic calendar, removing breaks during the semester, so students will finish before Thanksgiving break. In the classroom, we are utilizing a flipped classroom model, hybrid classes and physical distancing in others.”

East Georgia State College’s communications coordinator, Harley Strickland Smith, said the college expects 398 students on campus this fall, 91.9 percent of occupancy.

“Though EGSC is part of a P3, that did not influence our decision in terms of capacity limitations and operations,” she said in an email. “We are choosing to open at full capacity rather than limiting capacity, because all of our housing units are private bedroom units. Bathrooms are shared only between 2 residential students. Additional social distancing from a capacity standpoint was deemed unnecessary.”

Representatives from the other Georgia institutions in the Corvias portfolio, Abraham Baldwin Agricultural College, Augusta University, Columbus State University and the University of North Georgia, did not respond to a request for comment Thursday.

No Corporate Influence, Say Other Universities

Corvias lists several other colleges and universities outside the Georgia system in its higher education portfolio, including the Alabama College of Osteopathic Medicine, Howard University, North Carolina Central University, the University of Notre Dame and Wayne State University.

Wayne State’s campus housing capacity totals just over 3,000 beds and is expected to be about half-full this fall. Corvias manages all of the university’s beds.

Wayne State’s spokesman, Lockwood, denied any influence from the company in fall planning.

“No influence from Corvias related to Wayne State fall semester plans,” Lockwood said in an email. He said subcommittees were in charge of reopening plans.

Wayne State's “campus restart” website lists a 25-member housing, dining and campus retail subcommittee. That committee includes five members from Corvias, including a company director of real estate and capital projects, finance manager, vice president for property management, on-site Wayne State operations manager, and portfolio director. Two committee members are Wayne State faculty members.

Asked about the company representatives on the committee, Lockwood said they were divided among subgroups appropriately.

“The large Housing/Dining/Retail committee was divided into five focused groups, the Corvias employees were divided among the auxiliary operations and finance subgroups, which was appropriate,” he said. “Faculty and academic staff were present in varying numbers on all campus restart committees, the number of faculty on our student services’ group was consistent with the recommendation from the faculty senate. Our faculty representatives served on the student development subgroup.”

In his June 9 letter responding to Corvias, Wayne State’s associate vice president and chief housing officer said that the university has expertise managing the pandemic response because its president, M. Roy Wilson, is a physician and epidemiologist and because it has public health experts from its School of Medicine, College of Nursing, the Detroit Medical Center and the Henry Ford Health System. He argued the company and university’s interests are aligned.

“Given the emphasis in your letter about the security of loans and payments obtained by the partnership, WSU staff remain available to communicate jointly with you to the CCL-WSU, LLC lenders,” the chief housing officer, Michael, wrote. “We are confident that our lender community will agree that the comprehensive, science-based mitigation strategies we are employing at WSU and in campus housing are in the best interests of their investments, and the best way to assure current and future interests by the WSU campus community in living on campus.”

He closed by asking to be informed “if or when we need to meet with the lenders.”

Notre Dame manages its own 33 on-campus undergraduate residence halls, a university spokesman said. Corvias operates a small, new, off-campus housing complex for married students or students who are parents, most of whom are graduate students.

“There are about 50 units, and there was no pressure by Corvias to open for the fall semester,” the spokesman, Dennis Brown, wrote in an email. He said the university had not received any letter from the company.

Companies have not influenced fall plans, according to North Carolina Central University officials.

“No company has influenced North Carolina Central University’s plans to return to campus for the fall semester,” Ayana D. Hernandez, associate vice chancellor in the office of communications and marketing, said in an email. “Please note: Corvias is not the owner of the NCCU P3 housing. Corvias has served as the developer and will be the on-site operator.”

The Alabama College of Osteopathic Medicine wasn’t pressured, according to Sarah Senn, its director of communications and marketing.

“The Alabama College of Osteopathic Medicine (ACOM) has not received a request or any pressure from Corvias to reopen student housing,” she wrote in an email. “Unlike traditional campus dormitories, the student housing adjacent to ACOM is an apartment-style community that is owned and operated separately from the college and remains open year-round, even during campus closures.”

A statement from Howard University said it announced a reopening plan in June to operate in a hybrid format with more than 80 percent of courses available online so it can meet Washington, D.C., guidelines for social distancing.

"Howard University’s priority -- first and foremost -- is the health, safety and well-being of our students, faculty and staff," it said. "Our decision to re-open campus in a hybrid model has not been and will not be influenced by our vendors. Corvias is one of two providers and managers of resident housing for Howard University. Howard University is committed to compliance with all applicable federal and D.C. guidance to protect the Howard community from the spread of COVID-19. We continue to work with Corvias to educate them on our needs and our view of compliance and to understand their position."

The university has continued to monitor the spread of the coronavirus and make adjustments, Howard's statement said.

"As an institution that has historically supported and educated students from under-resourced communities, we feel it is our obligation to address the longstanding societal inequities exacerbated by the global pandemic, as opening our campus provides students with meals and Wi-Fi," it said. "Our position is supported by our ability to host an on-site, CLIA-certified testing laboratory, which will ensure our ability to return results within 24 hours. A robust testing plan is a key element to ensure detection, prevention, and mitigation."

A Corvias spokeswoman did not respond to several requests for comment. Contacted by phone Thursday, she said she was moving offices and would review questions.

What Is Corvias?

Privatized housing deals at U.S. military bases have also come under scrutiny recently, in the wake of a massive Reuters investigation into substandard housing and alleged cover-ups. Corvias was among those named in Reuters articles, one of which described homes the company rents to military families as being “plagued by flooding, bursting pipes, mold blooms, collapsed ceilings, exposed lead paint and tap water as brown as tea.”

The company’s founder and CEO, John G. Picerne, was among housing contractor representatives that appeared at a U.S. House of Representatives Armed Services subcommittee hearing on the issue in December.

Representative Anthony Brown, a Maryland Democrat, has also accused Corvias of retaliating against members of the U.S. military who complained about poor conditions in Fort Meade housing projects, The Washington Post reported.

Picerne has said his company will not permit retaliation, retribution or harassment. He also touted improvements Corvias made to housing, including $320 million “at no cost to the government.”

Military families filed suit against Corvias in district court in Maryland alleging gross negligence and fraud, according to the Post. The suit included photos and statements from military spouses who said they lived with children in mold-infested houses and that Corvias representatives were slow to make repairs. A company spokeswomen told the newspaper at the time that the lawsuit didn’t “reflect the significant resources, attention and rigor that has been brought to assuring quality resident housing.”

Picerne, the company’s CEO, has a history of donating to federal political candidates, parties and political action committees, according to a Center for Responsive Politics database stretching back to 1989.

Corvias also has a track record of donating to colleges and universities through its foundation, which describes itself as inspiring “college bound students, military families, higher education communities and our partners to reach higher.” Since 2006, the foundation says it has dedicated $15 million to scholarships and outreach, including four-year, $50,000 scholarships for high school seniors.

The foundation’s federal tax form shows it making scholarship payments to universities across the country.

Institutions in the University System of Georgia have touted awards from the company, describing it as their housing partner in news releases. One 2016 release from the University of North Georgia notes 34 students were receiving $30,000 in scholarships through a program funded by Corvias.

"With the rising cost of living and tuition, every little bit of financial support helps," said a statement from Treva Smith, director of residence life at UNG. "Because of the tremendous generosity of our housing partner, Corvias, we are able to help out those students who are good examples of how to successfully balance organizational leadership and service to other students."

Privatized Student Housing Projects on Watch

The college P3 market has been under scrutiny amid uncertainty about what the COVID-19 pandemic would do to occupancy rates and rent payments.

S&P Global Ratings this week placed 16 privatized higher education student housing projects from different companies that it rates on a negative credit watch. That means the ratings agency estimates a 50 percent chance it will downgrade the projects’ credit ratings within 90 days.

“Significant occupancy losses in fall 2020 could affect even facilities that have experienced strong occupancy historically and received demonstrated financial support from their sponsor institutions,” the ratings agency wrote in a news release announcing the decision. “The effects on these projects could be disproportionate, as the situation may vary from campus to campus. For all issuers, an extended COVID-19 duration, and correspondingly more severe economic fallout, has the potential to result in diminished occupancies in student housing that, in the long term, could be inconsistent with current rating levels, in our opinion.”

Elsewhere, companies have attempted to sound positive notes in the face of financial losses.

American Campus Communities Inc., which is among the largest owners, managers and developers of student housing in the country, dropped to a $13.3 million loss in the second quarter of 2020, down from net income of $10.4 million in the same quarter a year ago. The company reported providing $23.7 million in financial assistance to tenants, either directly to residents or to students through university partnerships. It waived all late fees and online payment fees.

In a July 20 release on its earnings, American Campus Communities noted that 63 of the 68 universities where it operates housing were planning to hold either in-person or hybrid classes in the fall.

“Although we don’t expect a full return to normalcy in Fall 2020, universities are focused on the policies and procedures necessary to promote a safe environment in the delivery of their academic curriculum this fall,” the company’s CEO, Bill Bayless, said in a statement at the time. “Our leasing trends and consumer sentiment at this time make us cautiously optimistic that we are on a path that many would have considered a best-case scenario at the outset of this pandemic.”

The seven-day average for new COVID-19 cases reported across the country was 66,240 on July 20, according to the CDC. It was 56,651 Thursday. The seven-day average did not rise above 19,000 in March, when many colleges started sending students home for the spring semester. The indicator was rising in March and has been declining since late July.

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Georgia State University
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In 2016, Georgia State University opened a new student housing and dining hall complex in downtown Atlanta, the first facility built and operated on the university’s campus under a P3 deal between the University System of Georgia and Corvias.
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