INNspired Partnerships

April 12, 2012 | CUNY Matters

Iconic views of Manhattan with Long Island City in the foreground will be one attraction of a hotel and educational complex planned near LaGuardia Community College. New York City College of Technology has long been known for its degrees in hospitality management — top four- and two-year programs with a distinguished professional faculty and students who compete for national culinary awards, and have been going on to successful careers in the hotel, restaurant and tourism industries in New York and beyond since the early 1950s.

Another of CUNY’s Brooklyn campuses, Kingsborough Community College, features a thriving department of tourism and hospitality whose graduates can be found working everywhere from elite restaurants to cruise ships. And in Queens, LaGuardia Community College has an associate degree program in travel, tourism and hospitality management.

These CUNY programs have modern facilities and strong faculties, but the one thing they don’t have — something considered integral for college-level hospitality management programs these days — is a working, top-flight hotel to ensure the most professional-quality training for their students.

But that may soon change: The University is pursuing a public-private partnership to build and operate a hotel on a site that is now a parking lot in the shadows of the Queensborough Bridge in Long Island City.

Parking Lot A at LaGuardia is among the largest but perhaps least distinguished of CUNY’s 292 properties around the city. But to University officials, the humbly utilitarian site may be a diamond in the rough: They are about to select a hotel industry consultant to evaluate the possibilities for striking a deal with a hotel company to develop the 91,000-square-foot property on Skillman Avenue. A hotel complex there would give the University both a home for its hospitality and culinary programs — perhaps even a new CUNY-wide School of Hospitality Management — and a source of revenue.

“We’ve talked with our colleges with hospitality programs and there’s a lot of interest in creating a full-blown program because hotels are such a huge industry in New York, with a lot of well-paying jobs,” said Iris Weinshall, vice chancellor for facilities planning, construction and management. “We had some informal talks with people in the industry and they said these programs work best when they’re affiliated with a working hotel. So the idea is for CUNY to lease or sell the land to a major hotel developer to build the hotel and manage it — they would put their flag on it, and CUNY would use it for a hotel-management school.”

The proposal is the latest example of an initiative by the University to be more entrepreneurial and seek partnerships with the private sector that can generate new revenues for expanding and upgrading facilities. With all public universities confronting a 20-year trend of sharp cuts in state funding, Chancellor Matthew Goldstein has been an outspoken advocate of the need to find creative and unconventional ways of closing the revenue gap. One of the boldest steps over the past few years has been to tap and maximize the value of CUNY’s real estate by pursuing opportunities for public-private partnerships.

It’s a strategy strongly endorsed by CUNY Trustee Charles A. Shorter, an expert in real estate transactions who headed the public-private partnerships practice for the accounting firm Ernst & Young. “Treating the institution’s real estate as a portfolio of valuable assets is something that private universities embraced long ago,” says Shorter. “Cuts in state funding are the new norm for public institutions, and the opportunistic, rational use of land and buildings is a way to use what you have to yield new revenues and facilities.”

Besides the potential hotel project in Long Island City, CUNY is actively pursuing a public-private partnership to create a permanent home for its new community college in Manhattan. The University’s 24th campus, The New Community College at CUNY, will open next fall in temporary quarters on West 40th Street. To build a permanent facility from scratch would cost some $400 million, says Weinshall, so the University has a better idea — to make use of a property it already owns: North Hall at John Jay College of Criminal Justice, which is being vacated by the college’s move into a new academic building.

CUNY hopes to partner with a private developer to raze the existing building and construct a new, larger one that they could share — the University using roughly half for the new college, the developer taking the other half for a mix of residential units and commercial space. Such a partnership would allow CUNY to finance a portion of the new college’s facility with proceeds from the sale, without relying on the state for the full appropriation. The project is expected to draw significant interest from commercial developers.

The University is pursuing these projects with some significant public-private experience under its belt. Last fall, it opened a gleaming new home in East Harlem for the Silberman School of Social Work and the CUNY School of Public Health, both of Hunter College. Pulling off a major capital project in these times of constricted state budgets would be reason enough for a public university to celebrate. But what made it most unusual — and perhaps even possible — was the intricate and imaginative arrangement the University brokered with the state and three private entities: a commercial developer and two philanthropic foundations.

In 2007, the New York City Community Trust, which owned the building on East 79th Street that housed the School of Social Work, informed CUNY that it planned to put the property on the market. Because the University was only a third of the way through its rent-free 100-year lease, the Community Trust stipulated that the University would receive two-thirds of the proceeds of the sale to help relocate the social work school. But the University took it a step further, asking the trust to help find a new home for the School of Social Work that could also house CUNY’s new School of Public Health. The University ultimately received $30 million from the sale of the property to The Brodsky Organization, the state appropriated the remaining $95 million for a new building and Brodsky agreed to construct it for a reduced management fee.

The New York Times called it “a multiparty real estate deal of byzantine complexity” but it went up in record time and $20 million under budget. And while the deal may have been complex, says Shorter, “it showed that a public university can be as savvy with its assets as private institutions are.”