By Pat Hammert/Staff Writer

A Plano, Texas-based development company will build a $6.3 million apartment complex to house Redlands Community College students in El Reno.

College officials say they expect to lease the apartments by the 2007 fall semester. The college foundation approved a contract with Madison Communities of Plano recently, but the agreement was not without its detractors. Four of the 11 Redlands trustees present at the July 26 meeting voted against the proposal.

The project calls for apartment-style living for college students, accommodations that are preferred over student dormitories, college officials said.

The project is arranged financially so that the debt is paid off through rental fees, said Joel Drury, RCC director of institutional advancement. Financing is through a conventional mortgage loan. The foundation, which owns about eight acres on north campus, will ground lease the property to Madison.

When it’s built, Madison conveys the facility to the foundation, which will then enter into an agreement to manage, maintain and operate it. The ground lease remains in place, but the foundation has the right of first offer to buy out the ground lease and option to purchase after five years, and every two years thereafter, Drury said.

President Larry Devane said at least three financing proposals reviewed over the past three years were not workable because they involved selling bonds. RCC came close to a deal through the Kansas City, Mo.-based investment group, George K. Baum and Co., and even received approval from Canadian County Home Finance Authority last year to serve as a conduit for the bond financing.

“Madison and a number of different vendors approached us,” he said.

The college has worked with bond attorney J. Brent Clark of Norman-based Floyd Law Firm. Earlier cost estimates for construction and financing were between $7 million and $8 million.

Drury said finding bond financing that fit the project has not been easy because the college was unable to achieve a Standard and Poors credit rating and financing proposals wound up with the rent being out of reach of college students and their parents.

Foundation trustee Jim Bounds, who voted against the arrangement with Madison, said he did so because there was no guarantee local contractors would be used to build the facility.

Trustee Dana Gibson said college officials “blatantly overlooked” a viable financing arrangement package that included general contractor, Oklahoma City-based Ward Construction Co., owned by a Canadian County developer.

Drury said that proposal did not fit the needs of the college, but “our intentions were never to shut out” entities that have worked previously on the project. Devane said in negotiating the terms of the Madison contract, they requested Kaw Valley Engineering, Rees and Associates architects and Ward Construction Co. be considered as the civil engineer, architect and general contractor, respectively.

Proposed are four two-story units with a clubhouse that surround a quadrangle. The units feature two-bedroom and four-bedroom apartments capable of housing 160 students. At the current interest rates, the college needs an occupancy percentage of 77.5 percent to service the debt on a 40-year mortgage, according to Drury.

Revenue above the debt service will be split annually on a 60-40 basis between the foundation and Madison. Revenues from laundry, vending, food and beverages will go to the foundation.

Madison is a privately owned company that provides development financing and construction of student housing, conventional multi-family and residential housing.

The 13-year-old company recent built student housing for Texas Tech University at Commerce, Tarleton State University, Stephenville, Texas, and Sebastion Commons, a student housing complex at the University of Arkansas, Fort Smith.

Redlands will be the only community college in the metro area and one of the few in the rural area that would be able to provide housing. Housing availability is one of the top three questions recruiters hear from students, Devane said.