A new financing model for achieving the university’s “college town magic” transformation is beginning to take shape.

This week, the U’s Board of Trustees approved the first, $155 million project in a long-term student housing initiative. Phase 1, the first building under construction just south of Kahlert Village, will add more than 1,400 beds to campus.

The new public-private partnership (P3) will continue President Taylor Randall’s efforts to transition the U from a “commuter school” to a more traditional residential college campus over the next several years, said John Creer, the university’s chief real estate officer.

To accomplish that goal, the university needs to create a vibrant on-campus environment which starts with building transformational new residential facilities, Creer said. “These new facilities will address the lack of on-campus housing supply, waitlists and undersupply of private market student housing, as well as help the university reach its goals of 40,000 student enrollment and all first-year undergraduates living on campus.”

Partnering with American Campus Communities (ACC) allows the U to transfer the risk of a large development to a private partner and build potentially 5,000 additional beds on campus, while still preserving the university’s balance sheet for other initiatives, he added.

“By pursuing this partnership, the university will be able to avoid the costs associated with ownership and the risk of building thousands of beds,” Creer said.  “The least expensive cost of a building is building it. The most expensive cost is managing it.”

Austin, Texas-based American Campus Communities will build a 6-story residence hall with 349,342 square feet of space designed for first- and second-year students. MHTN Architects and Okland Construction are local partners on the project—a key part of the deal, Creer says.

The building provides a mix of 1,446 double and single rooms as well as semi-suites and full suites with the design inspired by the colors and textures of the Wasatch Front canyons.

The university will finish, manage and program the first floor—17,000 square feet with a gaming hub, dining, and fitness areas—at a cost of $12 million. Themed to highlight the campus’ natural outdoor beauty, amenities will include indoor bouldering walls; an excursion planning area; outdoor patio; lawn games and hammocks; ski and snowboard storage lockers; indoor bike parking and repair areas; and a fitness center, among other sustainability features.

Approximately $3 million has been spent prepping the site. Building construction is slated to start in October. The building is expected to open in the fall of 2026. While the housing will be managed by ACC, university students will still apply for housing through Housing and Residential Education’s (HRE) online portal.

The deal includes a 55-year lease for the land under the building. ACC will own the building through the term of the lease, then the building will revert to the university. If the building is sold to another investor, the university has first right of refusal. Any future owners must be experienced in managing residential housing, Creer said.

The University of Utah is relatively late to the phenomenon of partnering with private housing developers to build student housing. Five years ago, Arizona State University launched such a partnership with another firm. And Vanderbilt University also financed and raised graduate student housing with a private partner. Industry estimates tout more than 150 such projects across the United States.

Trustees questioned how the project will mesh with existing on-campus student housing and its wrap-around services—including activities, mental health resources, resident advisors and other amenities provided by HRE. They asked university leaders to report back in 60 days after workshopping ideas for a comprehensive strategy to address campus-wide dining, parking, fitness and student experience spaces, specifically the Student Union Building.