By Michael Linhorst
Overshadowed by fights over the state budget and the merger of state colleges late last month were two bills that could have their own broad effects on New Jersey’s higher education system. Both seek to spur new construction on college campuses: one uses a privatization arrangement to encourage private organizations to pay for construction at public colleges; the other authorizes $750 million in bonds to pay for new buildings.
The privatization bill, which the Legislature passed June 28 but the governor has not yet signed, seeks to encourage private entities – including for-profit companies – to pay for new construction on public college campuses. In exchange for financing the construction, the firms could lease existing dormitories or other revenue-producing buildings at the colleges.
The companies would have to pay for the dorms’ management and maintenance but would receive the buildings’ revenue and could make a profit until their leases with the colleges expire.
These private firms are exempted from the purchasing and contracting requirements public colleges must follow. But the colleges retain full ownership of both the leased buildings and the new buildings whose construction costs were paid by the private firms. The firms are required to finance the construction projects “in full” to be allowed to lease any existing buildings.
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