{Lexington, Kentucky}...Officials from the University of Kentucky and the private development firm Memphis-based Education Realty Trust broke ground Tuesday on a $26 million, 600-bed residence hall.
UK and Education Realty Trust are negotiating the second phase of the deal, which would replace or build 9,000 beds on campus. That agreement would put all of UK's housing under private management. For the first new dorm, an honors residence hall complete with classrooms, Education Realty Trust is putting up all the equity, meaning UK will incur no debt. UK Treasurer Angie Martin says the school rejected starting a non-profit foundation that would be able to issue tax-free bonds and be allow an exemption from property taxes. However, those bonds would still be counted against UK's total debt capacity. Martin says, if UK can figure out how to get tax-exempt status for the new dorms, the rent costs for students would be lower. UK does have General Assembly approval to issue as much as $175 million in debt for the next few phases of the rebuilding plan, so it's possible UK could form a foundation in the future.
