There’s ‘luxury’ housing at Philly’s community college, but where are the students?

Main Line developers helped CCP build the Hamilton, now leasing in Center City.

HamiltonCCP
Max Marin/Billy Penn
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At the Community College of Philadelphia, poverty is an open secret. As many as one in five students are experiencing homelessness, and more than half are deemed “housing insecure.”

So many were taken aback when the college last year began soliciting for the Hamilton, its new Center City tower built in partnership with a Main Line developer. “Luxury” studio apartments there range from $1,400 to $1,700 a month.

“Among apartments for rent in Philadelphia, it’s simply a smarter place to be,” read an April 2018 email sent out to students from an administrative address, offering perks for student sign-ups.

With the Hamilton, CCP has become one of the nation’s first community colleges to delve into a money-making enterprise usually reserved for large private universities with wealthy student bodies. Built on land owned by CCP, the $150 million development recently began leasing the first of what will eventually be two residential towers.

Perhaps unsurprisingly, few community college students actually call the place home.

The school’s original intent for the Hamilton, as described when construction began in 2016, was to attract international undergrads, who pay three times the tuition locals do. So far, there’s little evidence that plan is working.

International enrollment at CCP has fallen behind schedule since the Hamilton broke ground. Billy Penn found that the firm hired by the college to lure overseas students delivered only 20 percent the number projected. Perhaps relatedly, just 30 tenants in the 279-unit Hamilton are currently CCP students, only one of whom is considered “domestic.”

David Yeager, Hamilton developer and CEO of Radnor Property Group, who did not return requests for comment for this story, recently told Curbed Philly that 60 percent of tenants are non-students.

College officials said there is no student tenant quota to fill. Dr. Donald Guy Generals, CCP president, argued the Hamilon contributes to the vitality of campus — “as important as a fitness center” — and also helps the college’s underfunded bottom line.

“It’s not at the expense of domestic students…Our focus has not been compromised in any way,” Generals said. “It’s a net good.”

The school will make an average of $586,000 annually from rental profits, according to lease records obtained through a Right-to-Know request. That might sound like a lot, but it equals less than 0.5 percent of the college’s operating budget. (The city currently underfunds the school by about $17 million a year.)

Either way, it’s a financial path feared by faculty, which recently came close to striking during long-delayed contract negotiations.

“The Hamilton represents a daunting future for community college,” said Junior Brainard, co-president of the Faculty & Staff Federation of Community College of Philadelphia, “one in which real estate development and wealthy international students are tools for funding what should be public higher education.”

Higher education experts are also baffled as to how the luxury facility serves the mission of the publicly funded institution.

“There is no track record of community colleges getting into campus housing that ends up working out financially for the school or the students,” said Dr. Sara Goldrick-Rab, a professor of higher education policy at Temple University.

PROMO VIDEO FOR THE HAMILTON

From ‘student housing’ to ‘high-end luxury’

The 1940s-era former Inquirer warehouse adjacent to campus was purchased by the college for $5.8 million in 2010.

The first mention of the Hamilton project doesn’t show up in CCP Board of Trustees meeting minutes until six years later. In February 2016, officials expressed a seemingly sudden desire to erect a mixed-use housing project for “500 students” to foster a “better sense of community around the campus,” and laid out a plan to lease the land to a private developer for capital construction.

It was an unusual move. Leasing plum land to developers is largely uncharted territory for community colleges, according to Brent Little, a Texas-based real estate pro and national student housing expert.

“As a rule, student housing developers stay away from community colleges,” Little said. “There’s very few [partnerships] that have happened in the U.S., and even fewer that have been successful.”

But based on a review of minutes, the Hamilton plan appeared to receive little scrutiny from the trustees, who are appointed by the mayor — and many of whom have ties to the real estate industry.

Brainard, co-president of the faculty union, said the college’s board had failed to steer things in a direction that addresses real needs on campus.

“This project has undeniably overlooked the needs of our current students from the beginning,” Brainard said. “We want a college that invests in its students, not in luxury real estate that our students cannot afford.”

A 2017 survey found 19 percent of CCP students were experiencing homelessness — well above the 14 percent national average — and more than half of the students were food and housing insecure.

Mike Luna, the former head of the CCP student union, said he personally knows some of these students, and he viewed the Hamilton as another cash cow with little benefit for the student body.

“It doesn’t make sense morally,” Luna said. “If this is a community college it should be treated as such, not as an opportunity to profit off of students.”

As enshrined in state law, CCP’s funding should come from three equal parts: the state, the city and the students. With dwindled contributions from City Hall and Harrisburg, however, students today fund 57 percent of the college through their tuition.

International students not only pay three times the tuition as domestic students; they also pay upfront in cash.

“I don’t want you to convert that to ‘we’re exploiting them for the money,’ that’s not the case,” Generals, the CCP president, said in an April interview. “They help.”

The globalization of community college

Attracting international students has been a growing trend for cash-strapped schools trying to stay afloat.

However, the pipeline has begun to reverse course. According to data from the Institute for International Education, international student enrollment has declined across the board since 2016. Some attribute the downturn to concerns about safety and immigration under the Trump administration.

Nonetheless, Generals said CCP is vying to compete with other comparable community colleges that have seen “tremendous” numbers of international students.

Today, the college boasts 337 international students. That’s just over 1 percent of the student population — numbers that are far behind the college’s own projections. And paid efforts to lure more students have been slow to yield results.

In 2015, CCP contracted international student recruitment company QuadLearning to fill out a pipeline program called American Honors. Generals had also brought in American Honors when he worked at Mercer County Community College, in New Jersey, but it was later scuttled out of fairness to the college’s economically disadvantaged students, a Mercer spokesperson said.

At CCP, for an undisclosed fee, QuadLearning projected it would help enroll 350 international students by the upcoming semester, according to copy of its contract obtained by Billy Penn.

Yet as of last November, QuadLearning had recruited just 67 international students, according to board minutes. It’s unclear how many of those recruits are among the 29 international students currently living in the Hamilton.

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Max Marin/Billy Penn

‘We have zero investment’

Generals characterized the apartment tower as a cosmopolitan enclave for “all students,” including Temple, Penn and Drexel, as well as anyone who wants to enjoy proximity to Center City. He contended that many of CCP’s domestic students could afford to live at the Hamilton if they doubled up on roommates.

“It’s not an understatement to say there’s a lot of really poor students that could not afford, but I think you underestimate a lot of students who are working, who probably could afford,” Generals said. “I’m going to get accused of not knowing my students, but I do know them.”

Asked about addressing housing insecurity among the student body, Generals hinted at affordable housing plans in the works, but declined to provide more details.

The college says it has no financial liability on the line with the Hamilton deal, and maintains its spent no money on the investment.

“We have zero investment on the property. All we have is a lease agreement with [Radnor Property Group], period,” said Jacob Eipan, the college’s vice president of business and finance.

Radnor intervened on a Right-to-Know request filed by Billy Penn for a copy of CCP’s lease agreement, arguing the details of its arrangement with the government-funded college were a confidential trade secret. Portions of the lease were eventually released through a mediation process with the state open records office.

The college ultimately did spend some money: It contracted law firm Saul Ewing to facilitate the deal with Radnor, and later paid another $84,600 to Wallace Roberts & Todd to review the final plans for the Hamilton, according to board minutes.

A CCP spokesperson confirmed the developer will pay the real estate taxes on both the land and the building, which lost tax-exempt status under the for-profit partnership.

Real estate experts note that public agencies sometimes get the shaft when partnering with sophisticated private developers. Little, the Texas student housing expert, reviewed portions of the lease and said only one thing jumped out to him: numerous provisions about how and when Radnor could transfer its lease to another management company.

“This means developer can potentially have a nice windfall after they build it and it is cash flowing, then they ‘sell’ the lease,” he said.

David Yaeger, the Radnor Property Group developer, did not return multiple requests for an interview.

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