A Tale of Two Projects: How a Single University and Development Team Delivered Two Very Different Projects Simultaneously
In 2018, the Arizona State University partnered with Capstone to develop two housing communities on two of its campuses – ASU Poly in Mesa and the Downtown Phoenix campus.
The Capstone-ASU partnership for Lantana Hall was initiated when Capstone was selected by Harrison Street who had acquired the development rights to this project through its acquisition of Century Hall, ASU Poly’s most recent development prior to Lantana Hall. Harrison Street and ASU saw Capstone as an ideal development partner for the Lantana Hall project.
Lantana Hall provides 374 beds in 115,380 total SF including 8,500 SF of academic space and was built in 14 months with a total development cost of $34.2M. Lantana Hall was designed by Shepley Bulfinch, built by Core Construction and financed with 100% private equity by Capstone – Harrison Street and the academic component was funded by ASU.
Lantana Hall’s primary objectives were to: 1) satisfy the demand for the Barrett Honors housing program; 2) allow ASU to take South Desert Village, former military barracks, offline; 3) accommodate the growth of the Polytechnic campus and 4) refresh housing inventory.
Structurally, Lantana Hall is a 3-story wood-framed building comprised of a metal cementitious panel exterior.
The Capstone-ASU partnership for Fusion on First was a continuation of the partnership formed for the development of Taylor Place, ASU Downtown’s first residence hall that Capstone and ASU opened in 2009.
Fusion on First provides 532 beds of apartment-style housing comprising over 280,000 total SF including 77,500 SF of academic space and was built in 19 months with a total development cost of $117M. The project was designed by Studio Ma, built by DPR Construction and financed as a tax-exempt bond transaction. The development was underwritten by RBC Capital Markets and is owned by Downtown Phoenix Student Housing LLC, the 501c3 non-profit ownership entity that also owns Taylor Place. While the development was financed with 100% tax-exempt bonds, the academic portion was funded by ASU.
Fusion on First’s lower 3 levels are almost entirely academic space. Academic uses include: co-working space, music practice rooms, classrooms, fashion studios and labs, digital audio studio and recording studios.
Fusion on First is located on the edge of the ASU Downtown Phoenix campus. ASU’s primary objectives for the Project were to: 1) accommodate overflow of Taylor Place, 2) provide a true on-campus, housing option for upper-division students seeking, apartment-style units, 3) allow for ASU to be less reliant on off-campus master leases, and 4) accommodate growth and relocation of ASU’s arts and media academic programs.
Structurally, Fusion on First is a 17-story commercial concrete building with a metal panel façade.
Keeping the Simultaneous Projects On-Track
While Lantana Hall and Fusion on First were two different projects by their objectives, financing, construction type and product type, the development of the two projects were led by the same ASU and Capstone project teams. Capstone designated days and times that it would meet with the University in a given week to discuss each project. For example, on Mondays ASU and Capstone, with its specific design-build team for the project, would meet to discuss Lantana Hall; then on Wednesdays ASU and Capstone, with its specific design-build team for the project, would meet to discuss Fusion on First. This intentional structure and scheduling kept the teams focused and generated efficiencies for the projects teams as they were able to share various real-time decisions being made for each project and cross-pollinate as appropriate.
While both Lantana Hall and Fusion on First achieved on-time deliveries, the two projects certainly encountered challenges along the way.
After Lantana Hall’s design was approved, ASU approached Capstone with the request to add 8,500 SF of academic space to the program. This addition required the design team to modify the structural system to accommodate for this new space as well as increase the height of one of the building’s wings. Additionally, ASU suggested a façade redesign shortly after construction commenced. To accommodate for this change, Capstone and its team re-sequenced the schedule and accelerated certain components. Additionally, as Lantana Hall was already under construction in February of 2020 when the COVID-19 pandemic hit halting much of the construction industry around the country, affecting not only construction, but also leasing, ultimately causing overall uncertainty about what the future held for not just this new community that was being built and the campus it served but higher ed in general!
Fusion on First broke ground on construction in December 2019, just a few months before the COVID-19 Pandemic shutdown the U.S. In Spring of 2020, much like many other construction projects around the country experienced, the pandemic impacted our supply chain and labor sources, causing schedule uncertainties for the project that was scheduled to open in Fall 2021. Further, given ASU Downtown’s urban campus and the site that was selected, the development team was challenged by acquiring an adjacent parcel and ultimately incorporating a drive-through bank into the project that was a pre-existing tenant of the parcel.
Despite the challenges of being constructed in the midst of the COVID-19 pandemic, both Lantana Hall and Fusion on First opened on-time and under budget. Now, in its second year of operations, Lantana Hall boasted 98% occupancy and Fusion on First, in its first year of operations, reported 96% occupancy. Lantana Hall now provides Barrett Honors program a space of its own on the ASU Poly campus and Fusion on First allows ASU to bring more of its arts and media programs to the Phoenix campus as it grows.