Facing financial pressure, University considers selling graduate residence hall

Media Credit: Jordan McDonald | Hatchet Staff Photographer

Officials are considering selling the Hall on Virginia Avenue, which had been slated for renovations.

Updated: Nov. 16, 2015 at 10:35 a.m.

Years after officials promised graduate students and faculty a revamped, state-of-the-art residence hall, the location may be heading to the real estate market.

The Hall on Virginia Avenue was set to undergo a $35 million facelift that would have transformed it into a more modern space to attract top graduate students and faculty, before officials announced they may sell it last week. But two years after the space was promised as a concession to a part of the student body that has felt ignored in the past, students and faculty say the decision could mean GW is prioritizing finances over giving graduate students the place to live on campus.

GW purchased HOVA, which was previously the Howard Johnson hotel, for $25 million in 1999, or about $35 million today adjusted for inflation. And after graduate enrollment numbers fell below projections last year, officials made 5 percent cuts to administrative divisions across the University. Forty-six employees were laid off, and several academic programs have been trimmed.

Senior Associate Vice President for Operations Alicia Knight said in an email that the building has undergone some interior work, but the University has halted demolition until the broker lays out financial options for selling the building. She declined to say how much was spent on renovations so far.

She said GW hopes to have a broker selected by the end of the calendar year and have the building listed by the beginning of 2016.

“Since HOVA closed for renovation, we have received interest from potential buyers and University leadership believed it was prudent to fully consider all available options,” Knight said.

Dean of Student Affairs Peter Konwerski and Director of GW Housing Programs Seth Weinshel declined to comment.

Solving a ‘serious bind’
Economics professor Donald Parsons said officials may have felt that cutting off a project still in its early stages would be a “less painful” option than making cuts to existing programs. Officials slashed the music department by 40 percent last fall and cut eight creative writing adjunct faculty members this year because of missed budget projections.

Parsons, who is a member of the Faculty Senate’s finance committee, said he is not surprised that GW is considering selling the hall because the University is in a “serious bind financially,” after the planned fundraising for the Science and Engineering Hall fell through.

Last fall, officials changed their funding plans for the $275 million building after they failed to fundraise as much for the complex as they had hoped. Subsidies on government-sponsored research that officials hoped would also help pay down the building’s costs have not yet come in.

“I think they’re in desperate shape,” Parsons said. “We definitely have been cutting back any service supports we can because of the massive debt with which we have been burdened.”

Anthony Yezer, an economics professor, said in an email that the Hall on Virginia Avenue could be a financial boon to GW, which may be why officials decide not to keep it as a residence hall.

“The University may have decided that the property was too valuable to use for graduate housing,” Yezer said.

GW owns more than $600 million in real estate, which accounts for 40 percent of its endowment assets, according to last year’s endowment report.

University spokesman Kurtis Hiatt declined to say whether any of the planned renovations will continue or how much the University is hoping it could make from the sale of the building.

The capital budget, which is used to pay for construction projects, has also declined since it peaked at nearly $480 million fiscal year 2013, because officials have checked off major construction projects like new public health and engineering buildings. The capital budget approved last spring was a slight increase from the year before, but about a quarter of the size of previous budgets.

Officials must also balance new construction projects against a large debt load of about $1.67 billion. GW took on about $300 million in new debt in July 2014, and about half of that amount was put toward construction projects like moving Student Health Services to campus.

Chris Leinberger, the chair of GW’s Center for Real Estate and Urban Analysis, said if GW does sell the building, officials could put those funds toward other future projects.

“I suspect it depends on what price this broker comes up with that will probably influence what they’re going to do,” Leinberger said. “If they get a lot of money out of this, they can put it into some other project.”

He said a buyer would likely demolish and rebuild the building, but the land would be attractive to buyers because of its proximity to the Watergate Hotel and the Potomac River.

A potential selling point
If the planned renovations were completed, the state-of-the-art building could have been a selling point for graduate students and junior faculty members who might have trouble affording to live in one of the most expensive neighborhoods in the country.

GW does not list any residence options for faculty on its University Human Resources website. City schools like Northwestern and Boston universities offer faculty housing, and New York University has a specific Faculty Housing Office to match interested faculty with rentals in its Greenwich Village neighborhood.

The University lists two options for graduate student housing on its website. First-year law school students as well as a “small number” in other programs can apply to live in the Aston, one of four residence halls GW spent $3 million to upgrade in 2012.

Hiatt said in an email that GW will still offer housing to graduate students and is exploring “options for additional faculty-in-residence housing.” He said the University has not yet determined if The Aston on New Hampshire Avenue will be renovated next year as officials will decide that as part of next fiscal year’s capital budget, which is approved in the spring.

“Resources and programming for graduate students are largely offered through the student’s specific school and/or program,” Hiatt said.

While GW now only owns one graduate residence hall, the University also owns a minority interest in the Columbia Plaza Apartments on Virginia Avenue, where many graduate students live.

Graduate students were a part of Student Association President Andie Dowd’s campaign platform. She said she felt the graduate student population sometimes wasn’t catered to enough, though last year, a graduate student study space opened in Gelman Library.

Dowd said she was not part of any conversations about the Hall on Virginia Avenue, but she said GW should prioritize making graduate student space open and available to the largest fraction of GW’s student population. Graduate students make up nearly 60 percent of the University’s total student body, according to GW’s Office of Institutional Research and Planning.

“I think we can continue to encourage student space in Gelman Library and find other spots across campus that graduate students can call home. I think it’s really important to make sure graduate students are happy on campus, as they make up a large portion of our population,” Dowd said.

Student Assocation Sen. Tremayne Smith, CCAS-G, said “it would have been nice” if GW invested in a designated residence hall for graduate students – with collaborative study space to boot.

“It’s not that undergraduates are rambunctious people who can’t study. Graduate students are at a different point in life: The discipline and the rigor of the work is different, and if you’re around like-minded people, that’s helpful,” he said.

Smith said he found roommates through a GW database before he arrived in D.C. – “like Match.com for grad students” – but that it felt like a “rat race” to find affordable housing in a safe neighborhood.

“I tell you, it would have been less hectic if there were a suitable on-campus space to live,” he said.

Andrew Goudsward contributed reporting.

This post was updated to reflect the following clarification:
GW owns a minority interest in the Columbia Plaza Apartments.

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