UC Merced sets billion-dollar boom in motion

The University of California at Merced is announcing a $1.142 billion expansion deal that breaks new ground in public-private partnerships, paving the way to a 10,000-student campus.

The developer consortium and design details will be unveiled Wednesday for the UC Merced 2020 Project, which will frame the campus entry and double its footprint over the next four years. The project, expected to start construction this fall, is seen as an interim step as the university moves toward an eventual 25,000-student goal.

Under terms approved by the UC Board of Regents, the state will pay about two-thirds of the cost, $600 million from bonds and $157 million from UC Merced funds. The private consortium will put out the remaining third, $386 million, recouping the investment over 35 years of $51 million payments. The university will own the facilities and the land from the start.

The deal will be the largest public-private partnership of its kind in the U.S. higher education sector, notes a UC Merced news release, calling it a model for expanding public research universities in leaner times. In a report to the regents, administrators said the process would allow expansion at nearly twice the speed of traditional public construction projects.

UC Merced is the newest and by far the smallest full-service campus in the UC system, serving 6,685 students this year, most the first of their families to go to college. The campus is beyond capacity at its current size, says the report.

“Currently, classroom space is at capacity, housing is oversubscribed, and infrastructure systems operate above their design,” it lists, adding that administration, faculty offices and research labs have moved off campus to fit student classes.

The project overview available online calls for building 918,900 square feet of space, while having minimal environmental impact. New classrooms and research areas are envisioned as mixed-use spaces. Student housing will double, adding 1,700 beds, with new dining facilities and recreational areas.

But the campus presence stands larger than its footprint, said Jeffrey Michael, head of the University of the Pacific Center for Business and Policy Research.

“UC Merced has been a major driver of the economy in Merced County since the start,” Michael said Tuesday. “The $1 billion in construction isn’t a one-time thing. They’re building operations space,” he said.

The project is expected to generate 10,800 construction jobs in the region and inject $1.9 billion into the regional economy.

“A university impacts an economy in a lot of ways, especially a research university like they’re trying to grow,” Michael said.

Nearly two in three jobs in Merced County pay less than $15 an hour, a study done by his center found. While the 400 jobs the university anticipates it will add will include professorships, many will be in food service and other low-paying areas, some worked by students, Michael said.

“A lot of us worked those jobs, and they were important to gain experience as well as money,” he said.

But the greater impact will be jobs outside of the university, Michael predicted.

“It generates more of a knowledge economy, helps facilitate startups,” he said. “It’s not something that happens overnight. It’s a long process.”

This story was originally published June 14, 2016 at 6:36 PM with the headline "UC Merced sets billion-dollar boom in motion."