Frequently Asked Questions
Who are we and what are our
objectives?
Is there a demand for
higher education?
Is there an economic
development focus to this university project?
Where will the students
come from?
Is there a market niche
for the proposed campus?
Will there be a
market demand study?
Where is the proposed campus
site?
Why is “Section 24”
the best site? What happened to the Havasu Heights campus site?
What is the process and
timeline for acquiring the land? Who will hold title to the land?
Who are the “Partners” in
the campus project? What is the role of each of the “Partners”?
How much will it cost to
master plan the campus? Who will pay for the master plan?
What will the campus
include?
How much will it cost
to develop the campus? Who will pay for building the campus and providing the
necessary infrastructure?
Is there a plan for
campus financing?
Are there other
fundraising options?
What is the timeline for
building the campus---when will it open? What needs to be in place for NAU to
open the doors?
What will be the
fundraising area?
What are the population
demographics for the area?
What is the economic
base for this area?
What is significant
about the proposed mainland marina at Contact Point State Park, which is next to
the university site?
What is funding
and budget for the proposed mainland marina at Contact Point State Park?
What is
significant about the proposed municipal golf course, which is next to the
university site?
What other education
agencies are in this area?
What are HFHE
needs in professional fundraising for campus construction?
A BUSINESS PLAN WITH A BROADLY BASED
RESEARCH COMPONENT
FOR THE PROPOSED UNIVERSITY CAMPUS IN
LAKE HAVASU CITY
Not for public distribution. The 3-8-09 draft
is for review and critique only. For the complete draft document, contact the
Foundation. To date, this project has consumed 1,400 hours and would have cost
$630,000 with an outside contractor. The Foundation estimates over a year and a
minimum of 1,000 hours to finish this business plan project.
Executive Summary
(A Power Point presentation and jpg slides are also available.)
The Foundation vision includes an impressive lake-side “Greenfield” campus near the center of town with awesome vistas, marina, beaches, municipal golf course, fine and performing arts center, two small shopping areas, and a $1 billion mixed-use private development with a resort hotel.
Our long-range plan
projects a campus of 2,731 students within 20 years of initial operation,
growing to the size of the NAU or Northern Arizona University Flagstaff campus
within 40 years. Such enrollment growth would be a direct result of significant
population growth in Mohave County and the state at large.
The projected
growth in college-bound students in Arizona is estimated at 39,500 new students
by 2010. By
2020, university enrollment must double for Arizona to be nationally competitive.
We are also aware of the increasing sensitivity of students and their families
to the costs of higher education and the trends to select public colleges within
their state and area of residence.
The Foundation’s
mission is anchored to economic development. Our objectives include economic
expansion in ways that will significantly broaden and improve the employment
base of our community and county, attract businesses and industries that most
benefit from and contribute to a university town, expand the tax base, and
significantly increase tax revenue streams that result in improved city
infrastructure and a reduced tax burden on individuals and families. The tax
benefits are also expected to help the county and state in ways that directly
benefit our community. To expand this objective, an Arizona State University
(ASU)-Phoenix downtown campus educational and economic fiscal impact type study
will be needed.
The economic
development focus within our mission
in no way diminishes the educational and social benefits individuals, families,
businesses, organizations, and government will gain from meeting the basic
mission of creating a vibrant and successful comprehensive residential 4-year
university in our town.
To enhance this vision, a major business plan project is required with a broadly-based research component including market demand surveys. To that end, the Foundation retained the services of Huron Consulting Group, Inc., a nationally recognized firm specializing in financial, managerial, technical, legal, industrial, medical, governance, and university services; http://www.huronconsultinggroup.com/ Huron is assisting with the review of the content and methodology of the business plan, as well as assisting with the formulation of a major market demand study. A grant from the PED has made this support possible.
The initial results of the first of dozens of market demand studies are impressive. For example, 84% of those local students surveyed have indicated they would attend the Lake Havasu university campus if it were to open soon. By the end of April 2009, such surveys will have been completed for all of the major high schools in Mohave County and Parker. From there we will survey parts of Western Maricopa County and most of the rest of Western Arizona. You can check the survey instrument on; www.HavasuSurvey.com
We recognize the
most important factor for students and their families in selecting a college, is
cost-to-attend. The second ranked factor is availability of financial
aid. The third ranked factor is the influence of the academic reputation
of the institution on enrollment decisions. The Foundation in its business plan
development and the related market demand research embraces the significance of
such selection factors and is designing a campus and long-range operational plan
accordingly.
Thus, the
Foundation’s plan includes a quality university partner with a brand-name
that will readily attract quality students. Otherwise, the Foundation will face
a significant level of scholarship fundraising to insure a critical enrollment
base.
Cost-to-attend
factors also require a business plan design that takes advantage of the
economies possible within our small town (modeled on Prescott area colleges) for
student room, board and personal expenditures. The overall cost savings to
students could be as large as $10,743 per year when compared to Arizona metro
area university campuses. Or, $3,306 per year less than the average cost to
attend a California State University system school.
We researched several small university models…public and private…within Arizona and California, including the two 2+2 campuses in Arizona. We investigated the economics of upper and lower division offerings, resident and non-resident student mix, management structure, curriculum, marketing, and student recruitment.
We built statistical tools to extrapolate into the Havasu campus model, data accurate to the penny for specific numbers of students. Our plans are well documented, with active links to the sources, and we have shared the results with the Arizona Board of Regents, legislators, and the three public universities.
Our initial goal of
a 500 FTE or Full Time Equivalent enrollment with entering freshmen classes of
156 FTE students simply reflects the prudence of starting small and managing for
maximum educational quality and financial stability. The Foundation has
identified several small private colleges within our region that function quite
well at that level of operation.
The 4th
year revenue budget is $9.3 million. It could be as high as $12 million with the
level of general fund sharing the UA or University of Arizona provides to its
Sierra Vista branch campus. Interestingly, the enrollment for the proposed Lake
Havasu campus would be a miniscule 1/10th of 1% of the total Arizona
university system enrollment.
From the revenue budget analysis, a university partnership with UA as one example, would add $3,356,000 to the annual Lake Havasu campus budget if funded at the same rate and level UA funds the Sierra Vista branch campus. Accordingly, the Foundation keeps the door open to several options for a university partner and is prepared to negotiate the level of “withholding” by the parent university of Lake Havasu campus earned general fund revenues.
The Foundation business plan includes an appropriate mix of resident and non-resident students similar to that ASU has achieved where 28% of its total student body and 35% of entering freshmen are non-residents. It is the out-of-state enrollments, currently capped at 40% by ABOR, that help Arizona universities reach the critical mass of students needed for basic operations while expanding the options and choices for Arizona residents. In short, it is the appropriate mix of in-state and non-resident students that help the state universities meet their basic mission of service to Arizona.
Given the enrollment potential for the proposed Lake Havasu campus, the Foundation is able to project a profitable small campus operation, particularly with the $1.2 million of WICHE Western Undergraduate Exchange non-resident tuition income.
The Foundation envisions a common-sense method of financing campus and facilities construction modeled on the ASU-Phoenix downtown campus. Essentially, ASU and Phoenix developed agreements for acquiring land and financing buildings. Phoenix then passed a $220 million bond to acquire costly downtown land. In contrast, our town has access to 320 acres of prime lake-side land at no cost to the university. This BLM section is valued at over $128 million.
Before Phoenix voted on the bond, ASU and Phoenix developed lease agreements for the buildings. Essentially, Phoenix provided the land and buildings. With campus enrollment assured by ASU, more than adequate revenue is being generated for the bond payments. Once the bonds are retired, ASU (actually the state through the Arizona Board of Regents) will take title to the land and facilities.
The Foundation’s facility cost analysis is based on an initial campus of 80,000 sq. ft. with costs of $177.74 psf, which equals $14,219,200 in 2008 dollars. The Foundation rounded that calculation up to $17 million to include campus amenities such as sidewalks, parking, lighting, modest recreational areas, etc. The annual principal/interest on a 30-year revenue bond for the $17 million would be $808,380.
The campus revenue budget identifies monies to cover that expenditure including:
$389,120 in surplus revenues from WUE enrollments
$250,000 in a student facility fee at $500 for each of the 500 FTE students
$169,260 from a portion of other revenues allocated to facility leases
Some advantages for the university partner include access to a targeted California market of 5.1 million population (over 20 million overall in Southern CA), which is as large as all of Arizona at 5.1 million (2000 census). Moreover, within the five Southern CA counties, there are nearly a million high school students. The University of California and California State University systems alone enroll over 69,000 freshmen each year. By comparison, the Lake Havasu campus will need to draw a miniscule 63 non-resident freshmen each year (likely Southern CA students) at the ABOR 40% cap to reach the desired overall Lake Havasu campus level of 500 FTE students.
The Lake Havasu campus operation is designed to be profitable thus reflecting well on the management and fiscal reputation of the university. Moreover, a small-college liberal arts (interdisciplinary studies) campus with a high-quality private college image at public college tuition will also reflect well on the parent university partner.
The university partner can expect to draw a larger share of the Mohave County higher education market, gain additional enrollments for the university’s main campus, and achieve a small increase in FTE’s from the Lake Havasu campus. Thus, the project becomes a model for other small cities.
For the Lake Havasu campus project, the City and Foundation need a major brand-name university partner to draw that proper mix of resident and non-resident students. Designating a university partner will also strengthen the City’s applications for economic stimulus funds. It will dramatically improve the campus business plan and help complete the planning of a “Greenfield” site and marketing strategies
Designating a university partner will also permit the City to move forward with the economic fiscal impact study as well as position the project for the upswing of the nation’s economy.
The text of the business plan narrative provides the detail, documentation, and reference sources to illustrate the Foundation’s vision for higher education in Lake Havasu City.
Table of Contents
PART A:
Review and Critique of the Phase I Lipman-Hearne Study
A.1 Public university partner
A.2 Initial work with NAU
A.3 Positive results of Lipman-Hearne study
A.4 Complete experience campus
A.5 Cost of entry
A.6 Market demand survey
A.7 Realistic timeline
A.8 Lipman-Hearne survey instrument and study
A.9 The state of higher education in Mohave County or lack thereof
PART B: Business
Plan and Related Research
B.1 Focus of the business plan and areas of research including various surveys, case studies,
Internet reviews, etc.
B.2 Ethics of marketing and marketing research
B.3 Economic factors
B.4 The costs of attending California State University system campuses.
B.5 The significance of Arizona and California residents on the Lake Havasu City economy
B.6 Campus site and components
B.7 Small college models, case studies
B.8 Student living and dorms, review of research
B.9 Campus facilities and cost estimates
B.10 Campus revenue factors
B.11 Factors influencing college choice
B.12 University brand name influence on college choice
B.13 Arizona survey methodology and instrument
B.14 Mohave County and Parker student survey form
Appendix:
B. Graphics
C. Attachments
Click Here for the Power Point summary of the business plan.
Click Here for those who can't open a Power Point file to get a folder of jpg slides.
Who are we and what are our objectives?
The nearly 1,900 member Havasu Foundation for Higher Education (HFHE) is an Arizona 501(c)3 non-profit public service corporation formed in March 2004. Our primary mission and objective is to establish a comprehensive residential 4-year university campus in our community, Lake Havasu City, Arizona (City).
The preferred public university partner for the Lake Havasu City project is being addressed in the business plan, now under development. Considerable information on this project, incorporation details, by-laws, news articles, land plan, etc. can be found on our Foundation website http://www.havasufoundation.com/
Is there a demand for higher education?
In late May 2004 the Arizona Board of Regents (ABOR) http://www.abor.asu.edu/ announced plans to restructure the university system to meet the growing demands for higher education from the expanding Arizona population. The Regents identified several issues that must be ad-dressed in the public university system of the future. Among those issues were;
Benefits cited in the ABOR proposal included;
Is there an economic development focus to this university project?
Definitely. We wish to improve economic development opportunities for our community and its citizens through a broad-based project. The expectations from such economic development include large increases of tax revenues that can be used to improve the City’s infrastructure and reduce the burden of the new $452 million sewer system on the residents and taxpayers.
Our economic development plan is summarized in a PowerPoint presentation http://www.havasufoundation.com/PowerPoint.htm
This economic development focus does not minimize the awareness our entire community has of the desirable quality of life that comes with being a “university town.” Without question, this awareness has led to a significant response of citizens, and professional, civic, and fraternal organizations in support of HFHE’s goals.
Where will the students come from?
One challenge for the HFHE plan is the small but growing population of Mohave County. We believe our town and county does not yet have the population base to support a full campus of a university operation. But, for that matter, neither does Flagstaff and all of Coconino County. Interestingly, Lake Havasu City now has a larger and faster growing population than Flagstaff.
So, how can NAU make a go of it in Flagstaff? A campus that now has a billion dollar-a-year impact on the Flagstaff and Coconino County economy? The simple answer is non-resident students. NAU in Flagstaff draws 97% of its students from all over Arizona and neighboring states. Fortunately, Arizona is a part of a western states compact http://www.wiche.edu/ that allows students to attend colleges in our region at affordable near in-state tuition rates for some programs.
Given Lake Havasu City’s traditional draw from the Southern California area for tourists, home-buyers, and new business as well as being a major destination for spring-breakers from all over our nation, our town is uniquely positioned to draw on its historical economic and tourism market bases for non-resident (adjoining states and Arizona at a distance) university students. There’s no rocket science to this basic and simple strategy. It works for our town. And, of course, the lake with its 450 miles of coastline is the big draw as is the climate, clean air, low crime, good government, and friendly residents. For all of Arizona, nearly 58% of overnight non-resident visitors come from California. For Lake Havasu City, that proportion is much higher.
Each year, more than 2.5 million visitors visit the London Bridge alone. Total numbers of visitors citywide are considerably higher. In particular, our town is a popular Spring Break and summer weekend vacation destination among the traditional college-age 18-24 groups. Tourism statistics estimate 20,000 visitors, most from out of state, enjoy Lake Havasu City’s re-creational amenities during the six-week Spring Break period from March to mid-April. The number has been as high as 45,000 college-age visitors in some years.
Lake Havasu City’s position as a college-age recreation location will benefit the Arizona university system by bringing in dollars. While Arizona residents pay $3,983 in tuition as fulltime students, the dollars garnered from out-of-state tuition are $12,503 (AY 2004-05). In simple terms, if we convert only 10% of our out of state Spring Break visitors to full-time college students, we will generate a minimum of $25 million dollars in “new money” annually for the Arizona university system. Assuming a conservative 2% increase in out-of-state enrollment and a 1% increase in tuition each year, over a 5-year period tuition revenue at NAU-Havasu from this segment alone would approach $105 million.
Is there a market niche for the proposed campus?
Our vision projects
a campus of 4,000 to 6,000 students within 15 to 20 years of initial operation,
growing to the size of the NAU Flagstaff campus within 35 to 40 years.
Our initial goal of
a 500 FTE enrollment with entering freshmen classes of 156 FTE students simply
reflects the prudence of starting small and managing for maximum educational
quality and financial stability. The annual revenue budget could be about $9
million. Or, as high as $12 million with the level of general fund sharing UA
provides to the Sierra Vista branch campus.
The Foundation’s vision includes one of a quality public university partner with a brand name (ASU, NAU or UA) that will readily attract quality students. Thus, the Foundation keeps the door open to several options for a university partner and is prepared to negotiate the level of “withholding” by the parent university of Lake Havasu campus earned general fund revenues.
The Foundation’s vision includes an appropriate mix of resident and non-resident students similar to that ASU has achieved where about 28% of its total student body and 35% of entering freshmen are non-residents.
The Lipman-Hearne study included recommendations for a “complete campus experience.”
It was the complete experience campus with “multidisciplinary education” (interdisciplinary studies in NAU and ASU terminology) on the Greater Los Angeles sampled group, that drew the 59% extremely appealing/very appealing responses or 94% if one adds “somewhat appealing” to the mix. Or, 93% for the Lake Havasu area. As marketing research goes, that is a significant number of favorable responses when projected to the total population of potential students.
Will there be a market demand study?
On July 11, 2007, the Lake Havasu City Council approved several items related to the proposed university, including a Marketing Study to find out where potential students are and whether they will come to a university campus on Lake Havasu with all the amenities illustrated on Land Use Plan map:
The agency funded by the City to promote tourism, conventions, and events is the Convention & Visitors Bureau (CVB). The website is http://www.golakehavasu.com/ CVB is assisting with marketing studies and has considerable information available by email. The local Chamber of Commerce also has information about Lake Havasu City on its website http://www.havasuchamber.com/
Where is the proposed campus site?
Our Foundation with the assistance of the City has identified 320 acres adjacent to Contact Point State Park on the south-central side of town just two miles from the London Bridge. This is BLM property in Section 24 that became available for a Recreation & Public Purposes Act (R&PP) lease in June 2007.
HFHE has played a key role in identifying and helping secure this property.
(See land map on our website. See also, the PowerPoint presentation on land.)
This land is valued at over $128 million. The 100-acre portion being allocated to the university project is valued at over $40 million. The City has approved funding and a partnership for the required ecological and archeological studies. On August 17, 2007, the City Council approved a portion of the BLM land acquisition process. The proposed road and infrastructure overlay was presented to the City’s Planning Commission on August 22, 2007. Considerable information is included on the HFHE website and in the NEWS section. With the exception of staff time and the ecological study, with HFHE paying the acquisition fees, the cost to our university partner and the City will be zero for this BLM property purchase.
This land is within a few yards of the lake, beaches and new proposed marina at Contact Point State Park. The 320 acres will include a municipal golf course and a multi-purpose facility for a convention center, fine/performing arts center and sports complex. This land is also adjacent to the private property of Ken and Jim Komick that includes a proposed resort hotel and a town center. The value of the private development is expected to pass $1 billion at build-out.
The Lake Havasu City Council approved a series of four public hearings for “…a major amendment to the future land use map of the City’s General Plan for the 320-acre property commonly referred to as the four-year university site.” The hearings and formal action were completed October 2007.
All of these elements, taken together, present a huge economic potential for our city and county. This campus will be about two miles from London Bridge and near the physical center of town. With awesome vistas, this parcel may be one of the most valuable and desirable pieces of lakeside real estate in western Arizona.
Click here to see a power point of the proposed campus site.
Click here to see map of proposed campus site.
Why is “Section 24” the best site? What happened to the Havasu Heights campus site?
When NAU President John Haeger visited Lake Havasu City in March 2006, he toured the Havasu Heights property originally selected by the Foundation. Dr. Haeger and a number of com-munity leaders had reservations with this site. Such as the proximity to the lake and the center of town. HFHE responded with a more intensive land search and within two months, had identified the new BLM Section 24 property, within yard of the lake and only two miles from the London Bridge.
What is the process and timeline for acquiring the land? Who will hold title to the land?
The Bureau of Land Management (BLM) after months of preparation published on August 3, 2001 a notice nationwide in the Federal Register, to prepare a Draft Resource Management Plan. This was a complete revision of the former Plan that covered 1.3 million acres of BLM land in the Lake Havasu Field Office district. Included in that draft plan was BLM’s role in the management of Lake Havasu and the 320 acre site now known as the Section 24 university site.
Ten open houses and numerous public hearings were held on the draft Plan. Approximately 1,000 comments were received. Apparently none related to the university site.
The 1,500-page final version of the draft Plan was made available for public review and comment in September 2006. Notices were printed nationwide in the Federal Register and numerous public hearings were held. Again, there were apparently no comments related to the Section 24 university site.
The final version of the BLM Resource Management Plan was approved in May 2007. Thus, the Section 24 university land became available on June 1, 2007for disposal under the Federal Recreation & Public Purposes Act (Revised August 1996) also commonly known as the R&PP Act.
The process was very much like what the City is going through in the major amendments to the City’s General Plan for this same property.
In short, once completed, this university property will have been through an exceedingly rigorous 6-year Federal review process and a comparable local-level review.
Both federal and local processes lead to a designation of public land to be used for recreational or public purposes by state and local governments and by qualified nonprofit organizations, including schools.
The BLM has many such lease arrangements with schools. For example, Mohave Community College leased and has patented hundreds of acres from BLM in Bullhead City, Kingman and Lake Havasu City.
Who are the “Partners” in the campus project? What is the role of each of the “Partners”? Who is in charge?
The key partner of HFHE in this project is Lake Havasu City and its government. The university project has had the unanimous support of the current and two previous city councils. The above Land Use Plan map upon recommendation of the City’s “Partners” group has been approved by the City. The City has a drafted Request for Proposals (RFP) for a key study of this project, the Economic and Fiscal Analysis. Plot plans and architectural renderings for the campus and other components are being developed, some of which are already available. The Mayor is Honorable Mark Nexsen. Our primary contact person is City Manager Richard Kaffenberger. Two Council members and the City Manager are on the HFHE board. A city department head as staff liaison, attends most board meetings. (See Board of Directors section on our Foundation website.)
Considerable information on city government can be found on the website http://www.lhcaz.gov/ The Mohave County government website is http://www.co.mohave.az.us/
Our Foundation has completed a 24-page draft Inter-Governmental Agreement (IGA) modeled after the Phoenix-ASU Downtown Campus project, which includes building leases as a method of securing bonding for new construction. Some of the background on this partnership can be found in the news articles on our website.
The City’s “Partners” group includes: Mohave Community College, Lake Havasu Unified School District, Partnership for Economic Development, Convention & Visitors Bureau, private developers Ken and Jim Komick, Chemehuevi Indian Tribe, and our non-profit Havasu Foundation for Higher Education. Ex official members include Arizona State Parks, and the Bureau of Land Management.
Each government entity, educational institution, and organization has an important role to play in the project. For example, the City can provide the infrastructure and be the central organizing agency for securing financing. The City and Arizona State Parks are involved in the development of the Contact Point Marina. State Parks has applied to ADOT for grants to develop the roads and, with BLM, is addressing the preservation of our natural environment.
Every project needs a leader. For the first three years, that role had been held by our Foundation. The HFHE laid the groundwork and brought the parties together to discuss the community’s needs and opportunities for economic growth. Representatives from most of the partner groups have served on the HFHE Board. Appropriately, the City has recently taken a strong leadership role to assure that the project has expert staff support, resources of the City, community backing, political strength, and can gain the visibility this project needs at the state and national levels.
How much will it cost to master plan the campus? Who will pay for the master plan?
Several factors go into estimating the cost of the master plan. One might look to similar projects in our area such as SARA Park to get a rough idea of the work that goes into master planning. Much of the master planning work can be done by staff.
Moreover, the partnership already includes individuals with the expertise to do some of that work. First of all, a public university partner would bring a significant intellectual capital to the project. The state's university business and geography departments have worked with government and private developers around the state on land use plans and ecological and archeological impact studies. Similarly, the City, Arizona State Parks, and BLM have in-house expertise that they can bring to the project. In addition, members of the Havasu Foundation such as the Komicks have volunteered engineering and architectural assistance to master planning the campus and the larger project.
What will the campus include?
Plans will certainly evolve as the partners continue to work together. One factor in the planning is the amount of usable acreage. Another is the overall goal of building an attractive multi-use campus that will serve the needs of the community for generations to come. While the university project is an economic enterprise, it also serves the public needs.
Each Partner has a “wish list.” Likewise, the citizens of Lake Havasu City have ideas of what they would like to see developed on the campus. In addition to university classrooms and housing, the campus may include shared classrooms for high school and community college students, environmental research labs, conference center, and recreation facilities associated with the pro-posed Contact Point Marina, the new golf course, and the multi-purpose convention, fine/performing arts and sports center.
How much will it cost to develop the campus? Who will pay for building the campus and providing the necessary infrastructure?
It is too early in the planning to estimate the costs. The Partners’ first job will be to determine what can and will be built on the site. We estimate that half of the 100 acres earmarked for the university is “buildable,” but even that figure is open to interpretation. Of course, not all aspects of the campus will be built at once. Moreover, preservation of open space will be a major factor in campus design.
A major source of university capital comes from private developers who build and lease student housing and from industries that contribute to university research facilities.
Arizona State Parks and the City have access to grant monies from several sources that can help subsidize the master planning and development of the marina, golf course and the multi-use campus. As with many federal and state park facilities, the golf course will likely be done through a private developer and a long-term lease.
Likewise, the HFHE and PED as non-profit organizations can raise funds and apply for matching grants to provide the building capital. The “Sierra Vista model,” mentioned frequently, refers to the private fundraising activity that built the University of Arizona South campus in Sierra Vista. The Sierra Vista Foundation raised the money to construct the initial four buildings on that cam-pus.
Is there a plan for campus financing?
The major vehicle for new building construction financing will likely be based on a business plan with a tuition and fees structure designed to recover all costs of campus operations and building leases. This is primarily the result of a zero probability of state funding during the initial years of campus construction and operation. The business plan is being drafted accordingly.
The building leases with the bonding power of the City will likely be the basis of securing new construction financing as was done by Phoenix and ASU for their Downtown Campus. In addition, the City has a Community Investment Advisory Committee (CIAC) to look at financing alternatives for the golf course, four-year university, and the performing arts/convention center. Meetings are expected to begin Fall 2007.
Are there other fundraising options?
Several members of the HFHE board were involved nearly three years ago in a major fundraising effort for the City’s new business park. A professional firm, Resource Development Group of Phoenix, was contracted to assist in that effort which secured $1.8 million in pledges. Some in-formation on that project can be found on the Partnership for Economic Development (PED) website http://www.lakehavasu.org/ The sales of the business park lots might generate as much as $20 million plus funds that must be used for economic development within Lake Havasu City. Such funds have been informally committed to university campus development.
Years ago, our community raised about $2 million for a hospital expansion under difficult circumstances. The hospital was owned by a private corporation, which created some obvious obstacles to giving. The population was less than half of what we have today and the wealth over-all, considerably lower. We are a much more prosperous and rapidly growing town these days.
What is the timeline for building the campus---when will it open? What needs to be in place to open the doors?
The first step is to secure the land. This is being done through a series of IGA’s among the City, ABOR, and Arizona State Parks, which are the primary governmental partners in the project. Some of the agreements are already in place.
BLM approved their Resource Management Plan in May 2007, which allowed the lease of this land for Recreation & Public Purposes. Development of the land applications to BLM started June 2007. The master planning process on a project of this size and complexity generally takes a year and is underway. The City Council has already approved key actions. Several news articles (see NEWS section on our Foundation website) document that process.
Construction can begin on some parts of the overall project, such as the marina and roads, as soon as the roads and infrastructure overlay application is approved. That process was underway July 2007.
ASU and
Phoenix had students in classes in 2.5 years flat from the start of initial
planning. That included the Economic Fiscal Impact Study, which led to the $220
million bond vote. That bond money financed the downtown land acquisitions.
While the
Phoenix campus was a far larger and significantly more complicated project than
that planned for Havasu, the downtown campus project is the preferred model for
the Havasu university business plan.
HFHE will be starting market demand studies in February
2009, which will take 4-6 months to analyze, document, and complete with the
help of the Huron Consulting Group.
We hope to have the campus and building costs documented in
February 2009 once we unveil the architectural renderings at the annual meeting.
From that data, we can do the business plan sections on campus/building costs,
interim construction financing, bonding and leases and tie it all back to the
revenue budget.
The financing plan at this time is also based on the
ASU-Phoenix model. For example, with assured enrollments, the revenue from those
enrollments and IGA’s between ASU and Phoenix, ASU could afford building leases.
The leases enabled Phoenix to bond for the buildings. Still, because the Havasu
project is small compared to the downtown campus, Lake Havasu City may need to
have other financing options in order to secure a quality university partner.
Grants for roads and infrastructure are already being processed.
There are a number of sections of the university business
plan that must be updated during the summer of 2009 as the universities publish
cost-to-attend data and new budget/enrollment information. That effort will take
a week or two of work.
Those two remaining major tasks of market demand studies
and the facilities analyses should also be done by summer 2009 and will complete
the business plan. At that point, the plan should be presented to the City
Council
From there,
the project must secure a firm commitment from a preferred public university partner,
hopefully ASU, UA, or NAU. The leadership on that task will likely be best taken
by the City.
Progress on the roads and infrastructure will be critical
in moving forward. Moreover, without the marina, golf course and the other
components planned for the BLM site, student recruitment would become
significantly more unpredictable. And, that would complicate the task of
securing a committed and aggressive university partner.
It may be very difficult getting a viable university
project off the ground without the total package either in place or well along
to accomplishment. All one needs to do to see that picture is to consider what
it will take to get the minimum enrollment and proper mix of resident and
non-resident students. Thus, the city’s planning efforts on the total project is
critical to the university planning component.
The economy is certainly big factor. We need to be ready
for the upswing and the state/federal funding that may be related the economic
stimulus efforts.
Phoenix voted a $220 million bond to buy expensive downtown
land. That expense was factored into the leases ASU and Phoenix negotiated with
ABOR approval. Moreover, the cost of construction is higher in downtown Phoenix
than in Havasu.
Once the bonds are retired, ASU will take ownership of the
land and buildings.
These land cost advantages for the Havasu project will
contribute to the “profitability” of
the Havasu campus and are reflected in the revenue budget.
Hopefully, these cost advantages will also enable the university partner to allocate a larger share of general fund revenues to the Havasu branch campus, possibly at the rate UA does with its South campus in Sierra Vista. Which is about $3.4 million above that available elsewhere in the state. Such funds could be allocated to marketing and recruitment, as one example.
What will be the fundraising area?
The HFHE board includes a representative from the county seat in Kingman. A representative may be added from Bullhead City, which is the third key city in Mohave County. While the new university will have an exceedingly positive impact on the entire county, communicating that potential will likely be difficult. The Marketing Study and the Economic and Fiscal Analysis study will be valuable documents to that effort. Therefore, a part of the initial planning for the capital fundraising effort must be an assessment of the attitude and support outside of Lake Havasu City and the time and effort that would need to be given to fundraising throughout the county relative to potential return.
What are the population demographics for the area?
The Partnership for Economic Development has considerable information available on its website on area population http://www.lakehavasu.org/ The Lake Havasu City population as of June 1, 2006 was 54,610 according to the U.S. Census Bureau. Bullhead City was next at 39,930 and Kingman was 27,635. An additional 72,095 live in unincorporated area.
The 2010 population projection for Lake Havasu City is 62,613, which would be a 15.8% change from 2005. The City is expected to reach 96,000 by 2060. The PED website includes for our town, a Demographics Summary, Population Report, Income Report, Household Survey, Work-force Development section, etc. Additional information and Internet links typical of that given to businesses seeking information on Lake Havasu City, can be provided by email.
The growth potential for Lake Havasu City proper is significant. For example, there are over 18,000 acres of Arizona State Land Department property within and adjacent to the City, mostly on the east and northern boundaries. http://sco.az.gov/website/parcels/viewer.htm Private developers may buy such land through a public auction process. http://www.land.state.az.us/ One section was recently sold and another is scheduled for auction. These two parcels total over 1,000 acres for new residential construction. Moreover, considerable BLM land is available in the area, some of which can be made available for private development.
A county website http://www.mohavedevelopment.org/ has the most complete population data for our area. Examples of highlights include:
Sources: Population Statistics Unit, Arizona Department of Economic Security (602) 542-5984.
What is the economic base for this area?
Other than the cyclical market of new home construction, the City seldom experiences economic distress. Even in years of declining home construction, sales tax revenues continue to grow from other expanding elements of the area economy such as commercial construction.
Presently under construction is a major new outdoor mall known as “The Shops at Lake Havasu.” Portions were completed Spring of 2008, the new mall is projected to create 14,024 new jobs for our city. Adjoining the new shopping mall will be an auto mall with lots for eleven dealers including Anderson Toyota on 8 acres.
The eastern suburbs of Los Angeles are as close as 3 to 5 hours driving time to Lake Havasu City and are a major factor in the Lake Havasu City economy. At times, as many as 2/3rds of the homebuyers are from California.
The close proximity of the Las Vegas metropolitan area is also impacts the Lake Havasu City economy. For example, while the City has no scheduled commercial air service at present (funds have been budgeted to help fill that void), the Las Vegas airport is only about 2.5 hours driving time to and from Lake Havasu City. Thus, most travelers use ground transportation as it is less costly, more reliable, less waiting time, faster overall, more convenient, etc. Whether it is commuters to Vegas for air service or Nevada boaters traveling to our town and lake, there is considerable movement of people and economic activity between Lake Havasu City and Las Vegas.
What is significant about the proposed mainland marina at Contact Point State Park, which is next to the university site?
This mainland marina project has been talked about and advocated for over 30 years. The major issues have always been economic development, traffic safety and boater safety.
Public safety concerns from traffic congestion on H-95 and the roads to Windsor State Park and public safety concerns from congestion of boaters north of the Island and around the Windsor State Park Marina, are increasingly critical issues due to the growing number of accidents, property damage, injuries, and deaths on land and on the water.
At a City Council meeting September 26, 2006, Arizona State Parks board president Bill Porter, a Kingman attorney, addressed the growing safety issues from the congestion on streets and the highway to Windsor State Park and the number of boats around the island and the park marina. He promised action on the new marina by his board and emphasized his support for the City’s project with the 320 acres.
Arizona State Parks acquired the Contact Point State Park land from the federal government years ago, in part to secure land for a mainland marina on the south side of town. This marina site was intended to balance the activity and operations of the marina at Windsor State Park.
Note the area on the map of the current State Park and the 40 acre subset on the west portion of the 320 acres referred to as the Section 24 university site. This 40-acre portion of the BLM land is earmarked for Arizona State Parks to expand Contact Point State Park to accommodate parking and other needs for the planned marina. It is therefore a part of this hearing process.
Fortunately, the City and State Parks have made progress in discussions on roads and infrastructure. All of which would be crucial to the university project. Funds will be requested fro ADOT for construction of roads for the marina. Presently, the park is landlocked and without roads and infrastructure through the BLM 320-acre section, no development is possible. ADOT also budged $200,000 to design launch ramps for the new marina.
Lake Havasu City is known for tourism and new home construction as the primary industries. However, in a report published by the PED in 2006, the annual economic output of the local marine industry of Lake Havasu City alone equaled $191 million. The annual payroll of the marine industry was $29,646,808. Most of those jobs pay well above the average in our town.
With such performance, this growing industry can be expected to have a growing impact on the City. Likewise, we think the new mainland marina will be a big boost for our town’s expanding prosperous marine industry and all of the related business.
Since Contact Point State Park and the private property of the Komicks adjoin the BLM 320 acres, acquisition of this BLM land by the City, NAU, and Arizona State Parks will enable a better overall master plan, including infrastructure for all of the components of the larger project. More importantly, the master planning the entire site will allow all elements to move forward. The Partner’s intention with a plan of this magnitude, constructed with all entities involved, was to create a major new landmark for our city.
Being within a few yards of beaches, a host of water sports, and a new marina, will be a major factor in attracting students and their families to this awesome site.
What is funding and budget for the proposed mainland marina at Contact Point State Park?
City Council: At a City Council meeting 9-26-06, Arizona State Parks Board chair Bill Porter (a Kingman attorney) spoke on the Contact Point State Park proposed marina. He said, “… he had been preaching for years on the dangerous situation with the over-crowded launching facilities in Lake Havasu City.” “He said State Parks has been aware that they have to develop Contact Point; it was a critical key to the future of Lake Havasu City and its recreation.” He also commented that there was no negative reaction to the proposed university and that it could be extremely consistent with their kind of operations.
Fortunately, the City and State Parks have made progress in discussions on roads and infrastructure. All of which would be crucial to the university project. Presently, the park is landlocked and without roads and infrastructure through the BLM 320-acre section, no development is possible. According to recent news reports, ADOT already has budgeted $200,000 to design launch ramps for the new marina.
Legislative Joint Committee on Capital Review In a 7-12-07 letter by the legislative Joint Committee on Capital Review, committee staff recommended favorable review of the portion of the Parks Board request on $942,100 in improvements at Lake Havasu State Park. Staff also requested more information on the $1,500,000 for planning the new proposed Contact Point facility. The funds would be SLIF dollars (State Lake Improvement Fund).
It should be noted that Lake Havasu boaters are a major source of SLIF income. The purposes of the Fund are detailed in A.R.S. §5-382.
The Parks Board expects to use SLIF dollars in the future to fund part of the construction estimated to total $19,380,000. The various projects include:
The city is also an applicant for SLIF money. According to a recent 8-16-07 news article,
“Previously, the city received $400,000 in SLIF money to participate in the proposed new main-land marina at Contact Point. The city asked for another $700,000 to install buried infrastructure to a new state park facility, which also will assist the effort to place a four-year university on land adjacent to the park.”
Need: We are aware of two fatalities this summer 2007 within ¼ mile of the Windsor State Park boat ramp due in part, to congestion in that area. One any busy weekend, anyone can readily see the light boating traffic in the Contact Point area and on south as compared to the Island area and north to the Windsor boat launch.
In testimony before the Joint Committee, State Parks Board again cited the need to relieve congestion on the lake and around existing boat launch ramps. The Board also cited a 2005 BLM report that Lake Havasu had the highest utilization of any lake in Arizona. Also, 75% of all boating activity was located within 33-53% of the lake.
On holidays, Windsor State Park typically closes the gates at 9:30 A.M. On a typical summer weekend, the park closes the gates around 12 P.M. The closings result in a loss of revenue to the Parks Board. Moreover, traffic backs up to H-95 resulting in more accidents.
Not addressed in the State Parks Board testimony before the Joint Committee was the potential large positive impact of the proposed new Contact Point Marina on tourism and the economy of Lake Havasu City.
Also not addressed was the potential positive impact on the growing marine industry in Lake Havasu City.
In a report published by the PED in 2006, the annual economic output of the local marine industry of Lake Havasu City alone equaled $191 million. The annual payroll of the marine industry was $29,646,808. Most of those jobs pay well above the average in our town.
The close proximity of a major new and modern marina and beaches on one side of the university property and a new championship quality Emerald Canyon type municipal golf course on the other side, is a college recruiter’s dream. Not to mention the Town Center and a resort hotel with-in a sand wedge distance away. All within two miles of the London Bridge, shopping and a variety of tourist activities unique to the Village and the Channel.
What is significant about the proposed municipal golf course, which is next to the university site?
Cities that rely on tourism place great emphasis on readily available golf on public courses. Municipal courses are an important part of the mix of those golfing opportunities. For the past 25 years or more, a municipal golf course has been discussed for Lake Havasu City. The major impediment has been affordable land and location. The BLM Section 24, 320-acre parcel meets both criteria.
In a study published by the Morrison School of Agribusiness & Resource Management, May 19, 2006, by Dr. Troy G. Schmity. For Arizona, the study found the economic impact attributed to direct, indirect and induced by golf courses was nearly $1.5 billion for the year reported. The additional economic impact from additional tourism activities of golfers who visited Arizona from out-of-state was nearly $2 billion. That’s a total impact of nearly $3.5 billion per year. It is our hope that the projects planned the 320 acres being considered in this hearing, will help bring some of that prosperity to our town.
Golf courses also provide sponsoring cities an important source of revenue. For example, the Salt Lake City system of municipal golf courses creates enough income to fund much of that city’s parks department operation.
From a study, Measuring the Impact of Parks on Property Values by Sara Nicholis, Ph.D., National Recreation and Parks, Assoc. “Golf courses appear to have both the most consistent and most substantial positive impact on surrounding property values of any open space type.” “…with findings of premiums ranging from 5 to 25 percent, depending on proximity.” “Homes within 1,500 feet of a 116-acre golf course, the average size of those analyzed in this study, demonstrated a premium equal to nearly 10 percent of the value of such properties.”
Being within a sand wedge distance of a championship quality golf course, within yards of a town center (shopping area) and resort hotel, and next to a state park with beaches, a host of water sports, and a new marina, will be major factors in attracting students and their families to this awesome site.
What other education agencies are in this area?
Mohave Community College (MCC) has campuses in the three main cities of the county including LHC. The website is http://www.mohave.edu/ This college is similar to the other community colleges within the Arizona system. MCC is a member of the City’s Partners group for the university project. Everywhere in the country, universities have always had a very positive impact on neighboring community colleges. Over time, a productive and supportive relationship can be expected to evolve.
The local K-12 school system has officially endorsed and supported the university project. The website is http://www.havasu.k12.az.us/ The school superintendent and a school board member are on the HFHE board.
What are HFHE needs in professional fundraising for campus construction?
Some of our members think HFHE might be able to raise $8-10 million or more, depending on bequests and corporate support, for the new university. But, the ability of our community to respond at or beyond that level needs to be evaluated. For the PED’s Business Park project, the firm contracted to assist with that fundraising effort, helped determine our town’s ability to raise money for such a project. The Foundation needs to do that for the university project.
Moreover, a strategy must be developed based on best practices elsewhere, on identifying specific elements of a university that draw significant donors such as the naming of buildings.
Approaching businesses, groups, and individuals for pledges and contributions will likely require different strategies
Organizing and expanding our present Foundation membership of 1,750 to 2,500 or more to help with fundraising must be addressed. Particularly, the staffing of a follow-up effort on pledges over a period of years to get the highest possible return on those pledges.
Modifying and improving our website to aid the fundraising campaign must be considered in the RFP response.
Improving and automating our email communications with members and potential donors must be addressed.
Staffing required by a professional firm and the length of an intensive campaign relative to fundraising potential and total dollars, must be addressed.
We must determine how much marketing funding would need to be allocated by HFHE from funds to be raised to bring in the first wave of students. And, what role might CVB play in this effort?
Sorting out what bonding can finance and what the Foundation can finance needs to be done. In short, what is the best role for HFHE in the partnership with the City and the university partner?
Budget for Fund Raising The professional fundraiser respondents must present an appropriate fee for professional services and follow-up to a RFP for consideration by HFHE. Moreover, an annual budget must be developed for HFHE operations for staff to monitor and insure payment of pledges to a high level of return. HFHE staffing and a budget for an on-going program of fund raising and philanthropic giving must be developed.
Time Frame A Request for Proposals (RFP) may be issued late 2009. We likely need a month to prepare and distribute to 8 firms, a proper RFP. Possibly 2 months to evaluate responses. Two months to interview 3 firms and make a selection, negotiate, and finalize a contract. Possibly 3 months of preliminary assessments and organization. Hopefully, within a year, we can be organized properly to undertake a major fundraising campaign. A possible target date for a kick-off campaign might be immediately following the 2010 general election.
Havasu Foundation
PO Box 1020
Lake Havasu City, Az 86405
Phone: 928-453-2414
Toll Free: 800-345-2414
Fax: 928-453-1186
